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More huffing, puffing, and wringing of hands ensues over Bob Lutz’s comments from the Morgan Stanley conference. I hate sound bites. Maybe it’s the lawyer in me that obsesses over clarity and precision, but I find the manner in which news and information is conveyed in the modern era to be lacking in both accuracy and beauty. That’s probably why I enjoy the analyses of many bloggers who are devoted to ensuring that the full story is told.

Out of Lutz’s comments the only words anyone in the media seemed to hear were “damaged brands” in reference to Buick and Pontiac. What Lutz actually said, however, was something quite different. He recognized that over the years GM has sucked Buick and Pontiac dry without refreshing or invigorating either brand, but now the time has come to take care of these undernourished nameplates. He even used the word “undernourished” which I think has poetic beauty. Lutz, however, did not say (and I emphasize these words to deflect potential mischaracterizing soundbitism) that either brand was on the immediate chopping block.

The furor has become so significant that Lutz has had to address the issue in his own FastLane Blog. As he points out in the name of his post, context truly is everything, but he acknowledges that if there is blame to be placed, it belongs to him.

Here is what I know:

At a time when GM has issued profit warnings, lost market share, and is cutting production, Lutz stepped up and fielded some difficult questions and did so in a forthright and honest manner — in a manner, in fact, that we used to expect from corporate executives in the pre-Enron/Worldcom days. He didn’t lie to us and paint a happy but false picture of security and prosperity. No, Lutz told us honestly that GM had neglected Buick and Pontiac in the past and that the company was taking steps to correct that neglect.

If we can take three things away from the specifics of this incident, they should be these:

1. Lutz answered potentially explosive questions;
2. He gave honest answers to difficult questions;
3. He took the blame for his own statements.

That’s my kind of executive, and I wish we had more of them in charge of companies. Frankly, if it weren’t for my strict policy of not investing in the car companies I write about, I would go buy GM stock.

KeyCorp is selling its prime indirect auto loan portfolio to Bank of America, according to AutoRemarketing.com. The price tag? $990 Million and the deal affects about 89,000 customers. Tim Russi, President of Bank of America’s dealer financial services promises a “smooth transition” for these customers.

Yeah, right. I’m still waiting for Chase and Bank One to figure out who will account for customer service on their separate accounts and credit cards. And, the lease on my last car was bought and sold by so many banking institutions that I never knew who I was dealing with. When the fourth one ignored my payment date and grace period and tried to reset the due date and disavow the grace period, I was glad that I had my original lease agreement at hand and that I was a lawyer.

So, take this as a warning from me, Tim. Don’t screw up the transition or I’m sure you will hear from more than one of those unhappy 89,000 customers. Oh, yeah — and I have your phone number and email address, which I will pass out to any of those unhappy customers who ask.

Front page of this week’s Automotive News($) “Bob’s bombshell” and later “‘What Mr. Lutz meant to say …‘” are articles about a comment during the Morgan Stanley conference in N.Y. attributed to Vice Chair, Robert Lutz, in which he referred to Buick and Pontiac as “‘damaged brands that have suffered from years of harvesting with very little reinvestment.’” Lutz goes on to say, “‘And that’s something we’re trying to correct with an exciting array of new products.’” (Turns out from a transcript of the remarks made at the conference that he did use the “D” word in reference to Buick and Pontiac.)

Apparently, GM and the Buick and Pontiac dealers are a little upset about the comment. I have to ask, “Why?”

Personally, I think highly of Lutz for making the statement recognizing that mainstay brands like Buick and Pontiac have carried GM without any reward, while the company has focused its attention and resources on Saturn, Hummer, and Cadillac. In fact, I appreciate the way he described these two brands as having been harvested. (It reminds me of the way East Germany looked under Soviet control.) It’s refreshing to have some honesty from corporate, and it’s not as if Lutz said GM was abandoning the brands.

So can we stop making a big deal of whether Bob Lutz recognized that Buick and Pontiac need an injection of excitement or whether Herr Doktor Reithofer would like to see the X3 built in Spartanburg? After all, I think by the time you rise to the executive level in a major automotive company, you probably know what it is you mean to say.

Welcome to The Auto Prophet who joins the small, but growing, clan of automotive bloggers. The Auto Prophet comes to us from “the inside” — as a product development engineer for a major American auto maker. It’s good to have you on board!

Don’t know what to give your teenager for a birthday? How about “the ultimate driving experience”? That’s right, your teenager can attend the BMW driving school at the Performance Center in Spartanburg, SC.

The company issued a press release on the expanded opportunities to learn to drive BMW style:

BMW Performance Center 2005 Driving Programs through Summer

• Teen Driving School ($400) – April 9; May 21; June 13 and 18; July 1 and 13; August 4 and 27.

• Two-Day Teen Driving School ($700) - March 23-24; June 15-16, 21-22 and 28-29; July 6-7, 18-19 and 26-27; August 1-2; 9-10 and 15-16.

The programs promise lots of “seat time” in a 3 Series and the two day course has teens handling “rock angles up to 45 degrees” and learning “safe river-crossing techniques” in an X Series. Now that’s just what every parent needs — a teenager who knows how to drive up rock walls and cross rivers in Mom’s or Dad’s BMW. Let’s just hope they remember to drive the X5 and not the parents’ M5 up the rock wall.

And if you think your wife or female friend needs a driving skills tune-up, there is a special program just for women.

• Women-Only Driving School ($550) – March 26; April 22; May 17; July 22 and August 20.

Notice how the women’s driving school is more expensive than the ones for teenagers?

But, don’t worry parents and male companions. Gift Certificates are available.

There is a reason people swear by Lexus. As with any Toyota-made product, these cars are durable. Even with 120,000 miles the GS300 is solid on the road. This car simply exhibits “ordinary wear and tear”. There aren’t any electrical problems — the moon roof, radio, and heated seats still work perfectly. OK, there’s a little vibration in the pedals (same with steering, but nothing an alignment wouldn’t fix), the leather shows wear, and it hesitates just a second before turning over. But everything else is exactly as it should be, and this car still looks good inside and out.

This was a great car when it was new, and, even at 120,000 miles, it’s still a great car.

Attributes:

Gold out
Beige leather in
Moon roof
Heated seats
Power package
Radio & Tape (No CD player)
120,000

I thought I was moving on to new topics and putting the aftermarket parts issue aside for the moment, when the subject reared its ugly head again.

The Korea Herald posted a story yesterday about the problems Koreans face with counterfeit car parts circulating in the country. According to the story, these non-OEM parts are structurally weaker and are unable to bear the same level of stress OEM’s can before breaking. According to the story, “[u]sage of such non-genuine parts was found to be the major cause of several recent car accidents in the country”.

The story went on to identify “[a] recent comparative test by Hyundai Mobis Technical Research Institute shows the low quality of a counterfeit bumper that copied the registered design of a genuine parts supplier. According to the test, the genuine bumper had a compressive strength of 3.3 metric tons whereas the counterfeit broke at 1.5 tons.”

In July 2004, a California Court of Appeals found certification of a class against an insurer for dictating use of non-OEM parts to be proper and allowed the case to proceed as a class action. In that opinion, the California court stated significantly:

The legislative requirement that insurers use replacement parts of like “kind, quality, safety, fit and performance” to OEM parts suggests to us the Legislature is well aware there have been problems with some non-OEM parts. Indeed, as noted by Farmers, one year after the Lebrillas filed their lawsuit, the Legislature enacted Senate Bill No. 1178, authorizing a study to “consider the appropriate criteria or standards [necessary] for certifying crash parts” and to identify an oversight agency for certifying non-OEM parts. (Assembly Committee on Business and Professions, Staff Comments on SB 1178, as amended April 26, 2001 (July 10, 2001).) * * * Clearly, the Legislature and insurance companies are aware that not all inferior non-OEM parts have been eliminated. Thus, we reject Farmers’s [sic] suggestion it can be inferred the Legislature in passing California Code of Regulations, title 10, section 2695.8(j), impliedly determined “crash parts” are not inferior.(Italics added.)

Lebrilla v. Farmers Group, Inc., 119 Cal. App. 4th 1070, 1085 (Cal. Ct. App., 2004)

The frightening thing about the proposed NCOIL model act and Assembly Bill 1163 currently pending in the California Legislature is that they both subscribe to the theory that if you simply say something is true, then it mystically becomes so. Just saying that non-OEM parts are equivalent to OEM parts does not make that statement true. Passing legislation to make that statement a legal presumption does not mean these non-OEM parts are miraculously transformed in to parts of true, measurable quality equivalent to that of OEMs, and it is just foolish to believe that this is a viable solution to a real problem.

Astonishingly, the proposed solution to the imitation parts issue is to to close our eyes and pretend it doesn’t exist, rather than taking action to ensure that any parts used to repair our motor vehicles (OEM or aftermarket) meet the highest safety and quality standards.

Korea is already worried about the poor quality non-OEM parts circulating in that country. Are we silly enough to believe that those parts are not already available in the U.S.? Passing legislation that says these parts are presumed to be suitable for use in vehicle repair will open the floodgates and ensure that we are soon awash in poor quality, cheap, and potentially dangerous replacement car parts. And who will step up to the plate and be responsible for the deaths of our residents when the failures of these parts start killing people?

Let me leave you with these thoughts from the Korea Herald article:

“Use of non-genuine wheel bolts also account for a large number of major accidents on highways. Most of the wheel bolts circulated on the market are non-genuine.

According to the Mobis research institute’s test results, counterfeit wheel bolts are 20 percent weaker than the genuine article, and are even more deficient in structure quality.

The same applies to brake pads. The non-genuine brake pads’ adhesive strength is 40 percent less than genuine pads, undermining the car’s brake performance.”

Enough said.

NHTSA recently announced its decision to allow the importation of certain vehicles despite their failure to conform to specific U.S. standards. The vehicles granted exemption by NHTSA are all luxury vehicles including Lamborghini, Lexus, Mercedes-Benz, and BMW.

After all the hemming and hawing and “the correct answer is” and other stuff, BMW announced that it will build a new crossover vehicle at the Spartanburg plant. According to a recent Automotive News article($), the new model will be a four-door crossover with “sporty handling and a coupe-like exterior.” (Whatever that means. I sure hope Joe Sherlock will save me with his ability to cut through glitzy wording and just tell me what the heck this thing will be.)

BMW is being extremely vague about the new model and to say details are sparse is an understatement. BMW’s Dr. Burkhard Goeschel (BMW board — development) says that styling concepts are being considered. All we know is that the current U.S. suppliers for X5 parts will make the components on mystery vehicle Spartanburg.

BMW hasn’t even named the new model, yet. Which brings me to my title: Name That BMW! I have decided to run a contest to name the new model, and, yes, there will be a prize. I haven’t decided what just yet, but it will be something that even I would want to receive — which is to say, something good. Of course, I am disclaiming any responsibility for convincing BMW to use the winning name, and am formally declaring that I am running this little contest for my own pleasure and HAVE NO AUTHORIZATION FROM BMW (or anyone else for that matter) to actually name the new model.

That being said, please post your name suggestion in the comment section. In the event of multiple entries of the same name, the person who posted it first gets priority. I am the sole arbiter of who gets the prize, but I promise, it won’t be a family member or co-worker. I have lots of friends, so I can’t guarantee that the winner won’t be a friend. Nonetheless, I assure you that, in this matter, my interests are pure and lighthearted, and I will award the prize to the person submitting the name I like best for Mystery Vehicle Spartanburg.

With NCOIL’s model aftermarket parts act still undecided but set for a full hearing at its next meeting in July, California Assembly Member Yee has introduced similar legislation for consideration by the Golden State’s Legislature. Assembly Bill 1163 improves on NCOIL’s model act by proposing that any “third party certifier” be accredited by the American National Standards Institute (ANSI) and the International Organization for Standardization (ISO — not to be confused with the Insurance Services Office, also acronymed ISO). Otherwise, it displays the same vacuous thinking that caused me to criticize NCOIL’s act so harshly.

Initially, let’s take a look at California’s current Motor Vehicle Replacement Parts law as it now exists. It’s really quite simple with a definition section, directive section, and penalty provision. The California law prohibits an insurer from using aftermarket parts in its cost estimate, unless it discloses to the customer via a written estimate prior to repair that the estimate was based on the use of non OEM parts. Cal Bus & Prof Code § 9875.1 (2005). Cal Bus & Prof Code § 9875.2 subjects noncompliant insurers to penalties under Section 790.06 of California’s Insurance Code. Now, Cal Ins Code § 790.06 is about preventing unfair and deceptive acts or practices by any person or entity “engaged in the business of insurance”. Because this law is about governing what insurers can/cannot impose upon their policy holders as a mechanism of insurance coverage, enforcement under the insurance code makes sense. However, Assembly Bill 1163, as presented, raises all sorts of the same ugly problems I complained about in NCOIL’s model act and adds some as well.

1163 purports to apply the motor vehicle replacement parts law to collision repairers as well as insurers. Collision repairers are governed by the Bureau of Automotive Repair (BAR) within the Department of Consumer Affairs. There is no need to include repairers in this law because they are already required to provide customers with disclosures of the use of aftermarket parts by virtue of the Automotive Repair Act, (specifically Cal Bus & Prof Code § 9884.9) and BAR regulations.

The problem with including repairers arises in enforcement. The penalty provision did not change with the introduction of 1163 and penalties for violations remain those imposed by the Insurance Commissioner for unfair practices of those engaged in the business of insurance. Repairers are not engaged in the business of insurance. By adding repairers to the act but leaving the insurance penalty provision intact, is this a suggenstion that the Department of Insurance has authority over the manner in which repairers engage in their profession? I suspect BAR might have something to say about that, especially as its designated purpose is the protection of the public, even in the face of competing interests.

§ 9880.3. Priority of bureau; Protection of the public

Protection of the public shall be the highest priority for the Bureau of Automotive Repair in exercising its licensing, regulatory, and disciplinary functions. Whenever the protection of the public is inconsistent with other interests sought to be promoted, the protection of the public shall be paramount. (Cal Bus & Prof Code § 9880.3)

To suggest that the Department of Insurance has any jurisdiction over collision repairers or to suggest that collision repair has anything to do with the “business of insurance” negates BAR’s raison d’etre and displays the myopic focus of insurer-driven legislation. As with my earlier critique, ill-conceived ideas like this one do nothing but blur distinctions between what is and is not the business of insurance – which matters a great deal for anyone dicing through the exemption afforded insurers under the McCarran-Ferguson Act to application of certain federal laws.

AB 1163 also prohibits vehicle lessors and financing companies from preventing, or penalizing for, repair of a vehicle with aftermarket parts. This provision has serious and wide-reaching implications that affect UCC Article 9 secured transactions and lenders’ rights and affect existing leases and contracts.

And, of course, we get back to the eternal issue of the presumption that aftermarket parts are of appropriate quality to use in repair. 1163 says, “Noncar company certified aftermarket crash parts used to repair a motor vehicle shall be presumed to be of like kind and quality to car company parts.” Now, you’ve just got to ask yourself how good these products can really be if the only way to get people to buy and use them is to pass legislation that shoves them down consumers’ throats. The flip side of this would be for OEM’s to encourage legislation that presumes the prices they charge for parts are reasonable and appropriate.

Whenever I see this “presumption” language, I always come back to my issue about why any manufacturer should be entitled to have legislation enacted on its behalf that presumes a level of quality and suitability for its product. We don’t give any manufacturer that type of special treatment. Why, then, are we proposing to give it to manufacturers that have had a history of poor quality? According to BodyShop Business’s 2004 statistics, 16% of the CAPA certified aftermarket parts have to be returned by repairers to the manufacturer because of problems, compared to only 3% of OEM parts. Clearly, certification does not automatically elevate their quality to the level of OEMs’.

To end on a positive note, however, there is a plus for consumers about AB 1163 that did not exist in NCOIL’s model. 1163 includes language required to be on the estimate that says: “ALL AFTERMARKET CRASH PARTS USED IN THE PREPARATION OF THIS ESTIMATE ARE WARRANTED BY THE MANUFACTURER OR DISTRIBUTOR OF THE PARTS AND THE INSURER FOR WHICH THE ESTIMATE WAS WRITTEN.” This provision makes insurers warrantors of the aftermarket parts. True product warranties (not these fake and misleadingly named “extended warranties” that are really just insurance policies) are typically governed by state consumer protection laws and enforced by the Attorney General, not by the Department of Insurance. As a result, offering a product warranty is not regulated by the Department of Insurance as the “business of insurance” and, therefore, insurers have no exemption via McCarran-Ferguson from the application of the Magnuson-Moss Warranty Act.

As with the failure to consider the impact this bill (if passed) would have on other industries, laws, and government agencies, I doubt that the drafters of this language intended to expose insurers to any federal accountability. Nonethless, it’s rather interesting to consider that exposure to liability for warranting aftermarket parts could wind up costing insurers far more than they save by insisting on them in the first place.

Joe Sherlock’s View Through the Windshield blog always gives me a great laugh, but today he’s out done himself. His recent post, A Guide to Auto Buzzwords, translates all of those fancy car (and driver) descriptions into words the rest of us can understand. I love his description of “European Handling” and “Class-leading”. Oh, what the heck, I’ll just admit that I think all of his descriptions are hilarious and should be incorporated into every one of the remaining 8,000+ car shows world-wide.

Go, Joe. You keep the automotive folks honest and the on-lookers laughing.

Who would ever have believed that the Dodge Stratus was 2003’s most stolen vehicle? No offense to Dodge, but I really don’t salivate when I pass a Stratus, so it would never occur to me that it would be popular with thieves.

Of the vehicles topping NHTSA’s list, it’s interesting that 7 of the top 20 are manufactured by DaimlerChrysler. Add the missing Mitsubishis to the mix, and the DCC related companies hold 12 of the hottest 20 theft spots for 2003. Yet, not one of those was a Mercedes-Benz.

Stratus, Intrepid, Sebring, Neon, Sebring Convertible, Concorde, and 300M were the stand-out stolens for DCC. Toyota, Jaguar, Suzuki, Ford, General Motors, Nissan, and Volvo round out the top 20 list.

But a Stratus? Now that’s a surprise.

Automotive News has a short story ($) in this week’s edition about the National Auto Auction Association’s report that used vehicle auction sales have dropped off. Well, duh. Most banks got out of private passenger leasing two years ago. Therefore, the stream of cars being turned in at lease end is down to a trickle.

This creates one of your classic supply and demand issues. Fewer used cars being offered at the auction level means higher prices for those that are sold. Which, in turn, means higher prices for retail buyers.

NCOIL, the National Conference of Insurance Legislators, is to consider a Certified Aftermarket Crash Parts Model Act in its Spring Session at Hilton Head, S.C. this week. As we all still await the Illinois Supreme Court’s ruling on Avery v. State Farm Mutual Automobile Insurance Co., 321 Ill. App. 3d 269, 746 N.E.2d 1242, 254 Ill. Dec. 194 (2001), appeal allowed, 201 Ill. 2d 560, 786 N.E.2d 180, 271 Ill. Dec. 922 (2002), including a model aftermarket parts act in NCOIL’s agenda raises a number of questions.

First, why are insurance legislators even looking at the passage of a model act dealing with a commercial product that is not an insurance product? We are talking about car parts here, folks. Let’s say that again together. CAR PARTS. Physical products with warranties and product liability. What in the world are insurance legislators doing tromping on the jurisdiction of the FTC and the states’ Attorneys General?

Car parts have nothing to do with the “business of insurance.” They aren’t about rate setting, they aren’t about collecting premiums. Yet, here is NCOIL about to consider whether it should sanction a model aftermarket parts act that would endorse certification by “third party organizations”, like CAPA (Certified Aftermarket Parts Association) and which would effectively create a presumption of quality for the aftermarket parts equal to that of OEMs. It’s a wonder that the NAAG hasn’t gotten up in arms about this issue. Go to NAAG’s consumer protection page and you will find a heading for Automotive and Tire Safety. The stated purpose of NCOIL’s model act is to protect consumers from inferior aftermarket crash parts used to repair vehicles. Regulating body shops and preventing them from using inferior parts in their repairs is squarely in the AGs’ corner.

Certainly one can argue that endorsing the use of aftermarket parts is a subject that is tangentially connected to insurance in that their use affects the cost of claims and, therefore, premiums charged. OK. One could say the same thing about every product we use because they have a potential impact on health and life insurance and even about the roads on which we drive. Take roads, for example. Cars have accidents on roads and, because every state requires drivers to carry auto insurance, insurers have a tangential interest in how roads are constructed, the materials used, and which designs should be considered. But NCOIL isn’t considering a model act to endorse the certification and use of particular compositions of asphalt, now is it?

Second, NCOIL’s aftermarket parts act disallows any manufacturer of OEM or aftermarket parts from being a “third party certifier” (Section 3, definition 4) It does not, however, exclude insurance companies from being a third party certifier, nor does it prohibit an insurer from setting up, owning, or controlling a third party certifier. As insurers are the exclusive advocates of using aftermarket parts (aside from aftermarket manufacturers), just how independent do you think these third party certifiers are likely to be?

Part of the insidious nature of the model act, however, is the fact that it does not impose any liability on the third party certifier if it certifies sub-standard parts. Thus, if the certifier does a lousy job, we could all end up with inferior, and even dangerous, replacement crash parts that are presumed to be of certain quality. Worse, if the third party certifier has an agenda to promote as many aftermarket parts as possible, we could receive the same questionable products available today dressed up with a stamp of approval.

Additionally, the act does not impose liability on insurers for mandating the use of aftermarket parts in the event they fail. The sole provision which had imposed, albeit, secondary liability on the part of the insurer has been removed from the current version of the model act. In prior drafts, the aftermarket parts manufacturer bore the responsibility if the part failed, but secondary liability could be imposed on insurers if the insurer gave the insured no option but to use replacement crash parts. A prior version of the model act stated:

5. e. “Certified aftermarket crash part” - An aftermarket crash part for which a certification has been issued by an independent third-party certifier as defined in Section 3(4d) of this Act. All aftermarket crash parts certified shall be warranted by the manufacturer, distributor and/or the insurer as being equal to or exceeding the parts placed on the vehicle during initial assembly in terms of fit, finish, quality and performance. Primary liability shall rest with the manufacturer for any part that was the proximate cause of an injury. Secondary liability shall rest with the insurer in such cases if, and only if, the insurer mandated in its policy no option other than the use of non-OEM crash parts. (Bold in original.)

Any question of imposing liability on the part of the insurer for requiring a consumer to use (what turns out to be) a defective part has been sanitized from the current version of NCOIL’s model act.

Third, collision repairers will tell you that they don’t like to use aftermarket parts because they do not fit properly, are poor quality parts, and they have concerns about the potential safety issues with them. BodyShop Business, a trade publication for the collision repair industry, has published its 2004 statistics on repairers’ use of aftermarket parts. 87% of the body shops surveyed said they use aftermarket parts. 62% of respondents said they use these parts because they are pressured by insurers to do so. (Participants were permitted to select more than one reason when responding.) Only 6% said they use the parts becaues they like them. Of the repairers refusing to use these replacement crash parts, 87% is due to poor fit, while 78% is due to poor quality of the parts.

If any organization should be certifying aftermarket parts, collision repairers and their organizations should be the exclusive entities capable of becoming “third party certifiers”. After all, they work with parts and cars every day in a real world environment, not in some carefully controlled, crash test world. They know how well the parts hold up, whether they fit, and whether they are safe enough to be on any family’s vehicle. Imposing the use of aftermarket parts on the repairers because some made-up entity ostensibly “certified” them is about as sensible as letting fourth graders build the next space shuttle.

Fourth, although there is no liability for a third party certifier, and, therefore, no incentive to be accurate and careful in its certification, the act creates the presumption of quality equivalent to an OEM part.

Section 4. Use of Certified Aftermarket Crash Parts

All non-car company aftermarket crash parts, as defined in Section 3(1), which are used to repair a motor vehicle and which are certified, shall be presumed to be suitable replacement parts.

Hold on a minute. This provision creates the presumption of suitability and implies they have achieved a certain level of quality. No other manufacturer of any product gets that. I’m certain Ford, GM, Mr. Coffee, Dell, Mars and every other product maker would love to have legislation declaring their parts to be of certain presumed quality. Does this mean the mere certification of a part that turns out to suffer from product defects is an affirmative defense to any product liability action? Does this imply NHTSA can’t initiate a recall? Let’s at least hope that this presumption is rebuttable.

Fifth, the model act deprives finance and lease companies the right to demand their own vehicles or their security interests be repaired with OEM parts.

Section 6. Leased and Financed Vehicles

No individual, company or agent shall impose any penalty upon an individual leasing or financing a motor vehicle that repairs said vehicle using certified aftermarket crash parts.

(I see potential issues with the freedom to contract and secured transactions with this provision.)

Sixth, and probably the most important issue, the act is completely devoid of any enforcement mechanism. It does not provide for the decertification of any previously certified third party entity, nor does it have any penalties for the certifier’s failure to comply with the requirements of the certification process. There is no consumer protection recourse and the act fails to suggest that any aftermarket parts act be integrated into existing consumer fraud/protection laws.

In sum, despite its stated purpose to protect consumers from inferior aftermarket crash parts used to repair vehicles NCOIL’s model aftermarket parts act does more to endanger consumers and expose them to inferior parts than the situation currently. This model act is not good for consumers and is not good for the collision repairers who serve them. It is only good for insurers, as it gives them an easy mechanism for mandating the use of these parts, creates the presumption of quality, and insulates them from all liability.

Additionally, NCOIL should not even be considering what is, in essence, a product matter, and it should not be interfering with issues that are governed by other state agencies. NAAG should be considering this issue, not NCOIL.

Finally, the marketplace has already determined that aftermarket crash parts have limited viability in a free market environment. The repairers don’t want to use them because they are sub-standard. Consumers don’t want them because of quality issues. If these parts are as good as insurers contend, let the marketplace determine whether they should be used.