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Aftermarket Parts and Their Consequences in Litigation

This article addresses the potential areas of liability for a lessor of automobiles in cases where an aftermarket alteration has been made, particularly if that lessor is the party who executed or authorized the change.

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According to the Automotive Aftermarket Industry Association, aftermarket products represent a $257 billion market in the United States. The automotive aftermarket is the segment of that industry that focuses on the manufacturing, remanufacturing, distribution, retailing, and installation of all vehicle parts, tools, equipment and accessories for vehicles, after the sale of the automobile by the original equipment manufacturer to the consumer.

As published in the Motor Vehicle Industry Overview Series by the Internal Revenue Service, aftermarket products comprise a large part of the automotive industry. (available at www.irs.gov/businesses/article/0,,id=175582,00.html) Whether an aftermarket alteration is made by a dealer, a fleet owner or automobile lessor who then sells or leases an altered vehicle ‘ all these individuals can be held responsible for defects in the modification.

This article addresses the potential areas of liability for a lessor of automobiles in cases where an aftermarket alteration has been made, particularly if that lessor is the party who executed or authorized the change. Those who make modifications to vehicles or design and sell aftermarket parts are really manufacturers or, at a minimum, co-manufacturers with the original product manufacturer, and thus may be liable in cases of product defect.

Aftermarket Component Parts

There are two primary areas of concern when discussing aftermarket parts:

1) The aftermarket component itself. It is common for dealerships to do repairs and bodywork on automobiles that have been in crashes. Often these repairs are subsidized by insurance companies that are incentivized to repair a consumer’s vehicle for the lowest possible cost. Original Equipment Manufacturer (“OEM”) parts are often passed over in these situations, losing out in favor of aftermarket or salvage parts, in order to cut costs where possible.

2) Aftermarket vehicle modifications using non-OEM parts. Even greater problems result when vehicles are modified from their original configuration. There are thousands of vehicles on the road that have been modified before being put into use. Examples of modified vehicles include conversion vans, recreational vehicles (RVs), ambulances, limousines, handicapped accessible or mobility vehicles, off-road vehicles, mobile lifts, or mobile cranes. Unlike the OEM manufacturers, aftermarket vehicle manufacturers may not be required to comply with the Federal Motor Vehicle Safety Standards (“FMVSS”).

In the author’s opinion, aftermarket product defects are common, and the resulting injuries are often catastrophic. However, many times these claims are not identified and these cases not pursued. Victims should investigate whether an aftermarket component or aftermarket modification contributed to cause their injury.

Insurance companies routinely claim that recycled, reused and/or aftermarket parts are “like-kind and quality” to OEM parts. In fact, many insurers try to require such parts (when state law permits) when making repairs. However, most car makers warn that using aftermarket or salvaged parts may put vehicle owners at risk in an accident or collision.

For example, on Nov. 30, 2010, Toyota announced that it recommend against the use of alternative parts for the repair of Toyota vehicles. “Toyota’s recommendation is to use only OEM parts due to the lack of testing and potential safety and performance risk of alternative parts,” according to Toyota’s press release. (available at http://abrn.search-autoparts.com/abrn/data/articlestandard//abrn/502010/699466/article.pdf)

Ford Motor Company issued its own press release regarding non-OEM parts just a day earlier. Ford’s aftermarket parts warning included the results of tests performed by Ford’s Material Composition and Computer Aided Engineering department comparing OEM bumper beams, bumper isolators, bumper brackets, and radiator supports to their aftermarket equivalents.

The Ford tests found major differences between genuine Ford original equipment replacement parts and aftermarket copies. Ford found that non-OEM parts performed differently in crash tests because the aftermarket parts were not of like kind and quality as Ford’s original equipment and certified replacement parts.

Paul Massie, the powertrain and collision product marketing manager at Ford, said the tests “highlight the dangers of being penny-wise and pound-foolish, as less-expensive copy parts could lead to much higher repair costs down the road. All drivers should be aware that copy parts can compromise both the safety performance and the long-term repair costs of your vehicle.” (http://ohsonline.com/articles/2010/11/30/ford-questions-safety-of-aftermarket-parts.aspx)

Ford’s release stated that “(r)epair estimates show aftermarket copy bumper beams can more than double the repair costs after even a low-speed accident compared to a genuine Ford replacement bumper beam. Aftermarket copy parts are parts unauthorized by the vehicle manufacturer, often constructed with substandard materials in order to be marketed as a cheaper alternative to authorized replacement parts. Ford replacement crash parts, including all structural parts, are identical to those used in new vehicle production and operate seamlessly with the vehicle’s safety system.”

Representatives of aftermarket product manufacturers quickly responded to the statements by Ford and Toyota. The Automotive Body Parts Association quickly released its own response. Eileen Sottile, co-chair of the ABPA’s Legislation & Regulation Committee, said: “Ford’s findings were devoid of any qualitative or quantitative information related to occupant injury or variances in the timing of airbags depending on the use of aftermarket or OEM parts. This should be an eye opener for all consumers. The car companies will shamelessly attack the aftermarket industry and utilize scare tactics to turn consumers away from non-OEM replacement parts. All drivers should be aware that aftermarket parts are often produced by the same manufacturers that supply the car companies and that their safety performance rivals and can even exceed those of OEM parts.” (ABPA press release available at: www.prnewswire.com/news-releases/abpa-ford-fails-to-make-case-against-aftermarket-parts-after-releasing-critique-devoid-of-data-to-support-its-assertions-111604774.html)

Transparency and Disclosure

According to a 2009 report filed with Connecticut’s General Assembly, at least 35 states have enacted statutes or regulations concerning non-OEM aftermarket or reconditioned parts used in vehicle repairs. Legal requirements governing reconditioned and aftermarket components vary by state, but most are a variation of a National Association of Insurance Commissioners (“NAIC”) model regulation on the subject, according to the report. Of the 35 states identified:

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