This article is centered around the topic of why to buy used parts but the real purpose of this message is something much bigger. The used auto part and the benefits associated with its reuse help reduce costs for all stakeholders which is vital for a healthy economy.
The more I think about this topic the more inspired I get. So much so that after it was decided that I would write on this topic I called up a colleague of mine Howard Schwartz of Dix Automotive Recyclers Inc. in Lincoln Park, Michigan to get some of his insights. Howard, an experienced writer and professional automotive recycler, fuelled my fire as he not only knew the issues but also was able to describe them clearly. I knew buying used parts made sense and I was very pleased to write an article about it but what is key to me is painting the entire picture about the benefits of used auto parts.
The big picture as Howard states is centered around costs. “The more it costs to drive, the less people will drive and the less accidents and repairs.” We are all aware that insurance accident claims are down and business is not as busy as it could be. There is a sense that the insurance premiums are scaring drivers off the road.
Used Auto Parts Will Help Reduce Costs.
Insurance companies are beginning to take note! In a recent conversation with Doug Whitehead of Allianz Canada, he tells me that his objective for 2004 is to see Allianz Canada have used parts being used on 10% of their claims. Allianz Canada as of March 1st stood at 6.27% (national average) of used parts being used on their claims. Ontario statistics were a bit better than the national average at 7.5% of used parts being utilized on their claims.
Doug is currently pushing appraisers to list recycled parts as an option for the repair process. Doug has also stated that he has objected appraisals from his field appraisers if they do not list used auto parts. The push is on to ensure that recycled parts get utilized in the repair process. The vision that Doug has is in line with the purpose of this article as the cost savings that are realized with used parts directly affect the collision repair business.
Saving costs = more repairs. As Mr. Schwartz says, “The insurance carrier again saves on the price of pre-owned vs. new parts for the repair of vehicles, and saves again in paying for fewer totaled vehicles then if they used new parts alone. The insured saves in a reduced premium allowing more people to drive. ”
The Collision Repairer who is an integral part of this process needs to be recognized and appreciated in order for this to work to its full potential. The Collision Repairer sees certain benefits in used parts due to the fact that the parts are OEM. Also, these parts often come as an assembly (a door that comes complete with hardware and glass for instance) but in addition to these fringe benefits more needs to be done. Collision Repairers need to be given incentives to use recycled parts!
It makes no sense to me that a Collision Repair owner would use a recycled door to fix a builder that he is keeping for himself but won’t consider the same door for his client because the mark-up isn’t as great as a new door. This disincentive is a lose/lose and it is time to change this trend once and for all. Together lets come up with a plan that will help promote the use of used auto parts.
Insurance companies like All State are experimenting with new and innovative solutions to reward the collision repairer for using used auto parts. Insurance companies are on board and are taking proactive measures to help foster a commitment to the reuse of used auto parts.
For my next article lets explore the various incentives that collision repairers want to see when using used parts in the repair process. As a member of the progressive auto recyclers community I am here to tell you that our ears are wide open and we want to do business with your industry. We realize that Collision Repairers need a significant mark-up for parts in the repair process and we support your efforts to be profitable 100%.
As a recycler I can’t stand crushing good useable products because used parts aren’t considered as an option. Nor can I accept the use of our precious natural resources when a used part in not considered. The reuse of used parts is an automotive recyclers core function. Help us contribute more effectively. Please email me your thoughts.