As Americans, we support competition over monopolies. Why? Because competition drives down prices, improves quality and gives consumers options to choose from. It puts consumers in the driver seat. Who doesn’t love the freedom to make your own decisions?

These benefits are in jeopardy when it comes to dealing with a car accident. Consider what happens to thousands of Americans each year: you back into a pole at a shopping mall; someone in front of you stops suddenly and your bumpers collide; or you inadvertently sideswipe your car in a cramped parking lot. Fortunately, few of these fender benders result in injuries, but they often result in shockingly high repair bills.


Why are these repair bills so high? One reason is the cost of the parts for the needed repairs. Ford charges the same price for a fender as Dell charges for a high speed computer and flat screen monitor. A simple grill for your car costs the same as a combination flat screen TV/DVD player. The fact is, computers, TVs, refrigerators and GPS systems are cheaper and better today than five years ago for one reason – competition.

Unfortunately, there’s a hidden monopoly growing in the auto parts industry and most people are unaware that it will directly affect their ability to repair their cars after an accident. If left unchecked, this burgeoning monopoly will drastically impact how much money consumers will have to pay to get their cars repaired to pre-accident conditions – to the tune of $1.5 billion in added insurance costs alone across the country. And guess who’ll pay those increased costs?

Car companies are using design patents to secure intellectual property rights on individual cosmetic auto parts (e.g. hoods, bumper covers, fenders) of all sorts of makes and models of cars. These patents enable major automakers to stifle competition from independent suppliers who sell generic versions of these parts – parts that are anywhere between 25-to-50 percent less expensive.

If car companies have their way, competition in the collision repair parts market may eventually disappear – leaving consumers with no other options. Imagine if the same thing happened in the prescription drug market. Many consumers would be forced to buy only brand name drugs rather than saving money with more affordable generic counterparts.

Without congressional intervention, automakers will be able to hijack design patent laws to capture the entire collision repair parts market. Who are the victims if Congress does not intervene? The thousands of Americans who experience low-speed collisions each year.

That’s why competition is so critical for consumers. Such competition, where it exists, lowers prices, provides choice and improves quality. In fact, many independent brand parts have lifetime warranties, something that car company parts often lack.

This diminishing competition will not only result in higher repair costs, but also higher auto insurance premiums. When crash parts cost more, insurers will have no choice but to pass those cost increases onto their policyholders in the form of higher rates.

In addition, in the face of already rising insurance premiums, many consumers are opting for higher deductibles. That means that more of these exorbitant crash repair costs will be coming directly out of consumers’ pockets. This will have a disproportionate impact on low- and fixed-income consumers.

There’s a solution in both chambers of Congress to address this issue – the PARTS Act. This legislation would preserve competition, keep local businesses afloat and leave motorists with more cash in their pockets. The passage of this legislation is important to maintain a healthy collision repair parts marketplace, which has existed for more than 60 years. Without it, consumers will be faced with mounting repair bills, more ‘totaled’ vehicles, increasing insurance costs, and deferring necessary repairs affecting safety.

Consumers are less prepared than ever before to absorb the additional costs that would result if the car companies are successful in their efforts. On behalf of American consumers, I call on our federal representatives to support the PARTS Act. They have an opportunity to stand on the side of consumers and independent auto parts industry workers by supporting this bill.

Gillis is the Director of Public Affairs for the Consumer Federation of America and was a witness last week before the House Judiciary Subcommittee on Intellectual Property, Competition, and the Internet in support of the PARTS Act. Gillis also testified on behalf of Advocates for Highway and Auto Safety; the Center for Auto Safety; Consumers Union, the policy and advocacy arm of Consumer Reports; and Public Citizen.