ÛÝÛÛApril 7, 2014 IAG_AprUCN-TECH vert.pdf
USED CAR NEWS 1
3/25/14
11:15 AM
State Allows Aftermarket Parts By Sheila McGrath
Independent Auction Group’s 132 member auctions offer online sales and simulcasted auction platforms to meet every dealer need.
C
M
Y
CM
MY
CY
CMY
K
We Get the Cars We Have the Lanes
We Bring the
Technology We Offer the Services We Serve the Dealer
www.IndependentAuctionGroup.com
UCN_06.indd 1
Automotive aftermarket businesses are celebrating a victory in Maryland now that proposed regulations on aftermarket crash parts are headed back to the drawing board. On March 15, Maryland’s House Economic Matters Committee voted 16 to 7 to give the proposed regulations an unfavorable recommendation. Maryland House Bill 574 and Senate Bill 487 would have kept car insurance companies from requiring repair shops to use aftermarket crash parts instead of more expensive parts from the original equipment manufacturer. The use of aftermarket parts would have been allowed if the car’s owner consented in writing to their use. The bills would have also prohibited insurers from mandating parts procurement processes or specifying vendors. According to an analysis by the Maryland General Assembly’s Office of Legislative Services, 44 states have laws governing the use of replacement crash parts, and seven of those states require notice and consent on the part of the consumer if aftermarket parts are used. The Maryland proposal was supported by groups like the Washington Metropolitan Auto Body Association, which lobbied for passage of the bill. They argued that what’s in the best interests of insurance companies may not be in the best interests of consumers, and that use of aftermarket parts in newer cars might invalidate new-car warran-
ties. Most states that regulate the use of aftermarket parts do so for the first three to five years of a car’s life, when it would still be under warranty. There were also a number of organizations, including the Coalition for Auto Repair Equality and the Automotive Body Parts Association, lobbying against the bill. Sandy Bass-Cors, executive director of the Coalition for Auto Repair Equality, took issue with the notion that aftermarket parts are inferior simply because they’re less expensive. Bass-Cors said requiring someone to sign for aftermarket parts plants a seed of doubt in their mind, pushing them to buy company-labeled parts that are more expensive. The aspect that is so frustrating, she said, is that parts sold in the aftermarket and parts sold by car companies are often made on the same assembly line. “They’re not making their own parts, so the legislation is really based on a falsehood,” she said. “They lead people to believe that General Motors or Ford or Chrysler is actually manufacturing their own part and therefore it’s better, and that’s not the case.” She believes laws like the one proposed in Maryland are typically instigated by body shops that stand to make more money using parts made by original equipment manufacturers. A similar bill had been introduced in Maryland in 2013, but it, too, died in committee. The measures were reintroduced in January of this year.
Dealer Pays for Ignoring Warning The Federal Trade Commission has charged an Arkansas auto dealer, Abernathy Motor Co., and its two principals, with failing to display a “Buyers Guide” on used vehicles offered for sale. Each violation could result in a civil penalty of up to $16,000. The FTC’s Used Car Rule specifically requires used car dealers to disclose whether the car comes with a dealer’s warranty or is being sold “as is.” If the car is sold with a dealer’s warranty, the rule requires the Buyers Guide to list its basic terms and conditions, including the duration of coverage, the percentage of total repair costs to be paid by the dealer, and the exact systems covered by the warranty. In January 2013, the FTC announced that its Southwest region office had warned 11 used car dealerships in Jonesboro, Ark., that their sales practices violated the Used Car Rule. All but Abernathy Motor Company subsequently came into compliance.
Abernathy Motor Company has four used car sales locations in Arkansas: two in Blytheville, one in West Memphis, and one in Jonesboro. The FTC’s complaint also names the company’s owners, Wesley Abernathy and David Abernathy, and an affiliated dealership, Ab’s Best Buys AMC Inc., as defendants. According to the complaint, the FTC visited the Abernathy dealership in Jonesboro in November 2012, and found that none of the vehicles offered for sale displayed a Buyers Guide. The agency informed the dealership of that fact, and sent the dealership a copy of the Guide and the FTC publication, A Dealer’s Guide to the Used Car Rule. In May 2013, the FTC re-visited the Abernathy dealership, and visited Ab’s Best Buys AMC Inc., and found both dealerships were offering used vehicles for sale that did not display a Buyers Guide. The FTC received assistance from Legal Aid of Arkansas in this matter.
3/31/14 2:45 PM