PCI Disappointed with Action Taken Regarding N.J. Aftermarket Parts Bill

June 13, 2005

The Property Casualty Insurers Association of America (PCI) expressed disappointment on Monday with New Jersey legislators over the approval of A-3682, legislation that would reportedly provide car makers a monopoly on replacement parts, limit consumer choice and drive up repair costs.

“This legislation limits competition in the crash parts industry and unnecessarily drives up the cost of repairs and insurance,” said Richard Stokes, regional vice president for PCI. “These proposed requirements will not only increase costs, but will make it more difficult for consumers to use safe and less costly alternatives to the parts from the original equipment manufacturer.”

The bill was heard Monday morning in front of the Assembly Transportation Committee where it was then approved. PCI previously testified in opposition to the bill when it was heard before an earlier committee. However, due to heavy opposition from constituents and auto repair industry groups, the bill made it out of committee but without recommendation. The bill was then reassigned to the Assembly Transportation Committee, whose chair is also the legislation’s sponsor.

“Last month, the bill was denied a recommendation from legislators,” said Stokes. “This essentially means the committee members felt the bill wasn’t up to par and would not represent the best interests of their constituents. We are very disappointed the members of the current committee didn’t uphold the views of their peers. The bottom line is that these requirements will be a big step backwards for consumer choice and competition in the New Jersey auto repair and auto insurance marketplace.”

Competitive auto body parts were developed as an alternative to costly original equipment parts that monopolized the market in the late 1970’s. The parts have reportedly helped generate competition and have stabilized the price of auto repairs and auto insurance by costing less than parts supplied by the original equipment manufacturer.

With few exceptions, competitive parts are used primarily for cosmetic repairs and have virtually no effect on the safety of the car or its passengers. The parts also reportedly create no price differential in the value of a car compared to a car with original parts.

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