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ARA Warns Collision Repair Industry on Proscriptive Automaker Repair Policies

CONTACT: Caryn Smith                                               FOR IMMEDIATE RELEASE
(571) 208-0428                                                         Date: December 13, 2011

ARA Warns Collision Repair Industry on Proscriptive Automaker Repair Policies

Manassas, VA – The Automotive Recyclers Association (ARA) urges the collision repair industry to ensure that any official, industry-sanctioned "repair standards" for collision repair include all recognized procedures - not just those of the original equipment manufacturers. Standards promoted by other organizations such as the Inter Industry Conference on Auto Collision Repair (I-CAR) also need to be recognized. Given that there is no such thing as a "standard" accident, the ARA believes collision repairers must be allowed to use their professional training and judgement to make repair decisions based on the individual circumstances surrounding the damaged vehicles rather than be forced to adopt a single solution and approach.

In making this statement, ARA is responding to the joint statement recently signed by several prominent collision repair groups recognizing only those repair standards as published by the OEM vehicle manufacturers, when available, as the collision industry’s repair standards. The ARA is concerned that this action could have serious negative and far-reaching consequences for collision repair professionals and consumers. The ARA believes that tying the hands of body shops in this proscriptive manner could open them up to an onslaught of baseless and outlandish lawsuits in instances where the repairs are not conducted strictly according to the OEM standards.

Further, ARA members have seen first-hand that adhering to narrowly-defined OEM standards often results in increased repair costs, which in turn causes more repairable vehicles to be declared "total losses," and later sold at auctions. Increases in the total loss frequency rate for insurance claims to 19 percent over the past decade (68 percent of appraised insurance claim vehicles flagged "total loss" on vehicles seven years and older), is concerning enough - this campaign of only OEM standards would only exacerbate this situation. Thousands of small independent collision repair shops (83% of the collision repair industry has nine or fewer employees) also will be put at a tremendous disadvantage as they try to compete with the auto dealer network of certified collision repair centers.

With the drift toward unregulated open salvage auctions, more public and foreign buyers will be able to acquire, repair and resell these vehicles without being held to any repair standards, having only to make the vehicles appear desirable to their buyers. Driving up the cost of the repair process and the replacement parts will result in more repairable American cars being purchased by export buyers at auctions who will in turn ship them overseas. Ultimately, the work on these vehicles will more than likely be done by unlicensed individuals outside the country, reducing opportunities for collision repairers in the United States and eliminating thousands of American jobs.

During the past three years auto manufacturers have become more aggressive, releasing position statements that are biased and based on weak or no apparent scientific research claiming that genuine recycled parts are inferior to new OEM parts. By makings these types of statements, auto manufacturers seem to be attempting to exclude genuine recycled parts from the collision repair market. This would ultimately result in only one source for the parts and procedures necessary to repair consumers’ vehicles—the auto manufacturers. "The Property Casualty Insurers Association of America estimates that the current total vehicle damage loss dollars reflecting all crash parts is about $53.4 billion. It defies basic logic to allow automakers to have carte blanche control over decisions in which they have such a huge financial stake. It is the fox watching the hen house at its best and much more disturbing at its worst," says ARA CEO Michael E. Wilson.

Genuine recycled parts have been widely accepted for decades and there is a long track record of their successful use. Genuine recycled parts are fully functional OEM parts and in most cases are identical to the new OEM parts automobile manufacturers recommend for repairs. Genuine recycled parts have additional benefits compared to new parts. Genuine recycled parts are typically 30-70 percent less expensive than comparable new parts and are much better for the environment given that no additional energy or resources are utilized to create them.

"ARA believes that the goal of the manufacturers is to discourage the use of genuine recycled parts and to secure a market that establishes themselves as the only source of parts and procedures for the repair of consumers’ vehicles," said ARA CEO Michael E. Wilson. "If the car companies have their way and eliminate genuine recycled parts from the repair process then the costs of those new OEM parts will undoubtedly rise."

Since 1943 the Automotive Recyclers Association (ARA) has represented an industry dedicated to the efficient removal and reuse of "green" automotive parts, and the proper recycling of inoperable motor vehicles. ARA represents the interests of over 4,500 auto recycling facilities in the United States and 14 other countries around the world. With programs such as the Certified Automotive Recycler Program (CAR) and other partnerships, ARA members continue to provide consumers with quality, low-cost alternatives for vehicle replacement parts while preserving our environment for a "greener" tomorrow.

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