Legislation to protect a free market for auto repair parts introduced in both the House and Senate today with strong bipartisan support would save consumers billions of dollars each year, according to the National Association of Mutual Insurance Companies.
Introduced by Reps. Darrell Issa, R-Calif., and Zoe Lofgren, D-Calif., in the House and Sheldon Whitehouse, D-R.I., and Orrin Hatch, R-Utah, in the Senate, the Promoting Automotive Repair, Trade, and Sales Act would limit the design patent on an exterior, collision repair part to two-and-a-half years, barring sales of a competitive product during that time while allowing competitors to continue to participate in the market afterwards.
“Competition has been the best protection for consumers against high prices, but increasingly auto manufacturers are trying to monopolize the marketplace through excessive use of design patents,” said Jonathan Bergner, federal affairs director for NAMIC. “Without the PARTS Act, this would mean higher prices and fewer choices for consumers.”
Auto companies currently control about two-thirds of the market for cosmetic replacement parts, and are seeking to increase that share by filing design patents that would bar competitors from offering a similar part for 14 years. The PARTS Act would preserve competition while still providing the original manufacturer a thirty-month window in which aftermarket parts could not be sold.
“The PARTS Act provides for a reasonable amount of exclusivity for auto manufacturers while till ensuring reasonable pricing through competition over the long term,” Bergner said. “Consumers should not be forced to pay a monopoly price on a part such as a fender or a quarter-panel whenever it has been damaged in an unexpected accident and needs repair.”
Aftermarket parts generally cost between 26 and 50 percent less than those made by the original manufacturer, Bergner said, and competition in the marketplace saves consumers between $1.5 and $2.4 billion each year. Additionally, Bergner noted that the repair parts covered by the PARTS Act do not affect the safety or crash-worthiness of the vehicle.
“This is not an issue of favoring one part, or one manufacturer, over another,” Bergner said. “Ultimately, this is a consumer issue. Auto body repair costs are borne by all consumers who drive, either reflected in their insurance costs, or directly when they pay for repairs themselves. The PARTS Act would simply ensure that consumers will have more choices in the marketplace. NAMIC applauds Reps Issa and Lofgren and Sens Whitehouse and Hatch for their leadership on such a critical issue to drivers all across the country.”
Contact: Matt Brady
Director - Federal Public Affairs
Posted: Tuesday, April 23, 2013 2:23:12 PM. Modified: Thursday, September 19, 2013 10:21:11 AM.
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