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Michigan HB4344: “Collect from the Masses to Pay for the Few!”

Editor’s Note: The article below was submitted by Bob Guzdziol of KSI-Trojan Auto in Michigan, addressing the pending Michigan legislation that mandates OEM parts be used in repairs on vehicles less than six years old, and that any aftermarket parts must be certified. 

When reading Body Language Magazine the other day I came across the reprinted article written by Ms. Lauren Gibbons of MIRS, “Aftermarket Auto Parts Retailers Say Bill Could Put Them Out of Business.”  Being familiar with the bill she is writing about, a Michigan resident and a member of the Automotive Aftermarket Industry, her article obviously caught my attention.

Ms. Gibbons does a good job on touching all the key factors for the Aftermarket Parts existence, parts monopolies by the car companies, higher repair costs, certification and the potential closure of independent businesses and loss of jobs.  I firmly believe she missed a key point to the debate that all of us who live in Michigan will understand, car insurance premiums.

You see Michigan has the distinction of paying the highest cost for car insurance in the nation according to Insure.com (March 7, 2016).  The average cost for the top 20 selling current model vehicles being $2,437.  According to their report, we do so because of our current no fault policy structure and our personal injury protection coverages, which unfortunately in some cases will equate to a lifetime need.

Now our legislature, with the help of the car companies, dealership groups and ASA of Michigan, want to add higher parts and repair cost to the insurance premium mix.  As an example, 07-13 Sierra rear bumper Chrome, OEM list is $795, 07-13 Sierra hood OEM List is $895 where aftermarket parts are available to compete.  Where no competition is available, 14-15 rear bumper chrome OEM list is $1,295, the hood is $895.  These prices represent a 38.7% and 33.6% price increase to the consumer.

We can tell ourselves that “this does not apply to me since I have never been in or won’t be in an accident and need to have my car fixed.”  The reality is, we all pay for every accident through our insurance premiums. That what is insurance is: collect from the masses to pay for the few who need it. And, as we all know, insurance companies do not just absorb increases in their liability losses. They will pass these parts increases on to all of us through increased premiums.  Again, collect from the masses to pay for the few!

Bob Guzdziol
KSI – Trojan Auto

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