Paul Sanchez
Aftermarket parts are replacement parts that are not made by the original equipment manufacturer. They are used to replace damaged parts in automobiles and other equipment, but their use may alter the coverage of an insured item. Aftermarket parts are cheaper than original equipment manufacturer (OEM) parts, which is why some auto insurance companies prefer replacing certain damaged parts with aftermarket ones. However, the quality of aftermarket parts is often debated, and some argue that they are of lower quality than OEM parts. The use of aftermarket parts may also interfere with a vehicle's warranty. When it comes to insurance, the regulations and offerings vary across states and insurance companies. While some states require insurers to disclose repair estimates with the use of non-OEM parts, others mandate that aftermarket parts must be of similar quality to OEM parts. Ultimately, the decision to use aftermarket or OEM parts during repairs may depend on the insurer's replacement schedule, the specific coverage in the insurance policy, and the state's regulations.
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What You'll Learn
Aftermarket parts are cheaper and can reduce insurance premiums
Aftermarket parts are cheaper than their OEM (Original Equipment Manufacturer) counterparts, saving car owners money on repairs. They are produced by independent manufacturers and are similar to generic pharmaceuticals in that they are cheaper but likely to be just as effective. The National Association of Mutual Insurance Companies estimates that aftermarket parts can cost up to 50% less than OEM parts, saving car owners over $2.2 billion annually. This drives down insurance premiums for all policyholders.
Aftermarket parts are also more readily available than OEM parts, which helps keep repair costs down. Insurance companies may write estimates that include aftermarket parts because they can restore a vehicle to its pre-loss condition at a lower cost. This can result in lower premiums for the insured.
In some cases, insurance companies may prefer to use aftermarket parts as they are more cost-effective. However, some states have regulations regarding the use of aftermarket parts, and insurers may be required to disclose when they are used. As of 2017, 31 states required first-party insurers to disclose repair estimates that included the use of non-OEM parts. Twenty states required the manufacturer of aftermarket parts to be identified, and 13 states required aftermarket parts to be of "like kind and quality" as OEM parts.
It is important to note that the use of aftermarket parts may affect the coverage of an insured item. If an insured driver needs repairs, the insurer will depreciate the original value of the aftermarket parts and only cover the remaining value. Additionally, if a vehicle is modified with aftermarket parts, it may change what an insurance company is willing to cover. Therefore, it is essential to understand the insurance policy's provisions regarding aftermarket parts and modifications.
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Insurers may depreciate the value of aftermarket parts
Aftermarket parts are replacement parts that are not made by the original equipment manufacturer (OEM). They are used to replace damaged parts in automobiles and other equipment. They are similar to generic pharmaceuticals in that they are cheaper than brand-name medication but are likely to have similar effectiveness.
The use of aftermarket parts can impact the value of a vehicle and its warranty. In some cases, the use of aftermarket parts may void the warranty. This is because aftermarket parts are produced by independent manufacturers and may not meet the same standards as OEM parts. As a result, insurers may depreciate the value of a vehicle with aftermarket parts.
The amount of money that an insured driver may receive for repairs to aftermarket parts and other upgrades depends on the insurer's replacement schedule. In many cases, the insurer will depreciate the original value of the aftermarket parts according to a formula and will only cover the remaining value. This means that if a vehicle is totalled, the insured will only be paid for the value of the insured loss, which typically does not include the loss of upgrades.
The use of aftermarket parts can also affect the insurance coverage of a vehicle. In some states, insurance regulations require the disclosure of repair estimates that include the use of non-OEM parts. Some states also require the manufacturer of aftermarket parts to be identified, while others mandate that aftermarket parts must be of "like kind and quality" as OEM parts. These regulations can vary significantly from state to state.
It is important to note that not all states have laws addressing the use of OEM parts during vehicle repairs. In some cases, insurance companies may deny a claim if they deem the cost of OEM parts unreasonable. Vehicle owners have the right to request the use of OEM parts, but they may have to pay the difference in cost between aftermarket and OEM parts.
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State regulations vary on the use of aftermarket parts
Some states may regulate the inclusion of aftermarket parts in insurer estimates. For example, Florida law requires insurance companies to notify their customers if they plan to use aftermarket or non-OEM parts for repairs. The law also requires that this disclosure be provided in writing, in a font no smaller than 10-point. The disclosure must inform the customer that the aftermarket parts are warranted by the manufacturer of those parts, not the vehicle's manufacturer.
As of 2017, 31 states required first-party insurers to disclose repair estimates with the use of non-OEM parts. Twenty states required the manufacturer of aftermarket parts to be identified, while 13 states required aftermarket parts used in a repair to be of "like kind and quality" as OEM parts. Six states require the vehicle owner’s consent before the mechanic can use non-OEM replacement parts.
The use of aftermarket parts may also affect the coverage of an insured item. In some cases, insurance companies may not cover the loss of upgrades made to a vehicle. Additionally, using aftermarket parts can contribute to repair-related diminished value, which may be compensable after a crash.
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Aftermarket parts may void vehicle warranties
Aftermarket parts are replacement parts that are not made by the original equipment manufacturer (OEM). They are used to replace damaged parts in automobiles and are often cheaper than OEM parts. While aftermarket parts can be used to modify a vehicle's cosmetics, horsepower, fuel efficiency, or performance, they may also alter the coverage of an insured item.
In the context of insurance, aftermarket parts can impact a vehicle's warranty and, consequently, its value. Specifically, using aftermarket parts for repairs may void the vehicle's warranty, affecting its value. This is because aftermarket parts are produced by independent manufacturers and may not meet the same standards as OEM parts. As a result, insurance companies may not cover the cost of repairs or replacements for vehicles with aftermarket parts.
It is important to note that regulations regarding the use of aftermarket parts vary across states. While some states require insurers to disclose repair estimates and the use of non-OEM parts, others mandate that aftermarket parts must be of similar quality to OEM parts. Additionally, some states require vehicle owner consent before mechanics can install non-OEM parts. As such, it is essential to review your insurance policy and understand your state's regulations regarding aftermarket parts.
To avoid issues with warranties and insurance coverage, it is advisable to consult a trusted mechanic or specialist before installing aftermarket parts. While aftermarket parts can be a more cost-effective option, their use may have implications for your vehicle's warranty and insurance coverage. Therefore, careful consideration and research are necessary before making any modifications to your vehicle.
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Aftermarket parts can be as good as, or better than, OEM parts
Aftermarket parts are replacement parts that are not made by the original equipment manufacturer. They are used to replace damaged parts in automobiles and other equipment. Aftermarket parts are also called non-OEM parts, generic parts, or competitive replacement parts. They are similar to generic pharmaceuticals in that they are cheaper than brand-name medication, but are likely to have similar effectiveness.
Aftermarket parts are usually less expensive than OEM parts, although how much you save varies by brand. According to the Property Casualty Insurers Association of America, OEM parts cost about 60% more than aftermarket car parts. This is because OEM parts are designed for specific car models, which means manufacturers charge more per unit to make a profit.
Aftermarket parts are more readily available than OEM parts and can be sourced from any auto shop, gas station, or mechanic shop. On the other hand, OEM parts can only be sourced from original manufacturers or their authorized dealerships, which limits the options.
However, it is important to note that the quality of aftermarket parts can be inconsistent. While some aftermarket parts offer equal or greater quality than OEM parts, others may be of lower quality due to the use of inferior materials. Therefore, if you are not familiar with aftermarket brands, using OEM parts may be a better choice.
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Frequently asked questions
Aftermarket parts are replacement parts that are not made by the original equipment manufacturer. They are used to replace damaged parts in automobiles and other equipment. They are similar to generic pharmaceuticals in that they are cheaper than brand-name medication but are likely to be equally effective.
Aftermarket parts are generally more cost-effective than original equipment manufacturer (OEM) parts, which is why some auto insurance companies prefer to use them for repairs. However, the use of aftermarket parts may alter the coverage of an insured item. If you have made modifications to your vehicle using aftermarket parts, this may change what an insurance company is willing to cover.
Insurance regulations pertaining to the use of aftermarket parts vary depending on the state. As of 2017, 31 states required first-party insurers to disclose repair estimates with the use of non-OEM parts. Twenty states required the manufacturer of aftermarket parts to be identified, while 13 states required aftermarket parts to be of "like kind and quality" as OEM parts. Six states require the vehicle owner's consent before the mechanic can use non-OEM replacement parts.
