Any Indianapolis driver can easily imagine – and too many can painfully remember – driving on Interstate 465 at rush hour. The traffic barrels by with drivers flitting in and out of lanes like flies on a hot tin roof search for a cool landing spot.
A careless driver clips you and now you’ve got fender damage with which you must deal. Immediately, anger swells inside you because this idiot needlessly and carelessly damaged your car by putting his “Me first” attitude ahead of simple safety. But if you think the accident makes you mad, just wait until you go to the body shop.
There, your trusty, handy repair man could tell you that your car’s manufacturer is the lone fender-maker for your car. And like your high school economics teacher taught you, the price goes up when the number of competitors falls.
So a half-dozen Democrat U.S. representatives and a lone senator want increase competition in the hopes that collision repair prices come down. They include Reps. Zoe Lofgren (D-Cal.), Charles A. Wilson (D-Ohio), Rick Boucher (D-Va.), Sheila Jackson-Lee (D-Tex.), Steve Cohen (D-Tenn.), William D. Delahunt (D-Mass) and U.S. Senator Sheldon Whitehouse (D-R.I.). They have introduced resolutions on both the House of Representatives and in the Senate.
They say the Detroit Three comes up with enough engineering tricks to qualify for a new patent on car parts, giving them exclusive rights to making the patented part. That, in turn, eliminates competition which results in higher collision repair bills
"The rising cost of repair parts will put a severe dent in the pocket books of many working Americans, who depend on their vehicles to take their kids to school, drive to the doctor, and simply get to work," said Rep. Lofgren. "I believe that our patent system should provide an appropriate incentive for industrial designers to innovate. However, the system must be balanced and take into account the legitimate needs of consumers."
Right now, the out-of-balance system leans to the Detroit Three’s side, said the lawmakers. Their legal and marketing departments have apparently burned the midnight oil to find a way to manipulate the system in their favor.
The seven lawmakers claimed in a press release that the car companies have obtained an increasing number of design patents on visible crash parts, and patent enforcement actions have attempted to block competitors from producing and distributing affordable alternatives. New research suggests that several characteristics of the market for crash parts give the car companies an unusual ability and incentive to use design patents to raise prices and harm consumers. For instance, consumers are generally unaware of the total cost of ownership when they purchase a new vehicle.
"By exempting auto repair parts under the patent laws, this bill will preserve competition in the car parts market and ultimately lead to lower prices for consumers, at a time when every little bit helps," said Whitehouse, a member of the Senate Judiciary Committee.
The lawmakers say a competitive parts market allows consumers to keep $1.5 billion a year in their pockets. That works out to approximately $7.64 for every licensed driver in America. Of course, not every licensed driver will be involved in an accident this year. However, 10,485,000 vehicles were involved in accidents in 2006, according to the U.S. National Highway Traffic Safety Administration. So, this bill would save approximately $143.12 per damaged vehicle.
If a psychologist charges $100 an hour, those savings will buy you nearly 90 minutes of anger control sessions to help you cope with driving on I-465.
F.Y.I.: You can visit OpenCongress.org to follow H.R. 3059 as it makes its way through the legislative process.
Comments
While this bill at first sounds like a good idea, it's not really about lowering the price consumers pay.
This measure is supported by the insurance industry and auto parts makers in Taiwan. Insurance companies want cheaper parts for covered repairs but there's no provision in the bill for those lower prices to be passed to consumers. And by shifting the manufacturing of replacement parts for US-made cars overseas aren't we undermining all the effort (not to mention billions of dollars) put into salvaging the auto industry and manufacturing sector jobs?
I'm all for more competitive pricing but let's make sure we do it in a way that doesn't cost American jobs.
Joe Thomas doesn't know what the hell he is talking about. While we're at it, let's get rid of copyright laws too. Why should I pay $25 for a newly released book. Isn't that harming me as a consumer? Why should the author and publisher be allowed to make so much money? Let's allow the Asians to copy our books to make them cheaper also.
Patent and copyright laws are the foundation of innovation and personal property rights. The marketplace is full of products that would be much cheaper if we allowed other companies steal the work of inventors. Auto manufacturers invest billions to bring a new model into production, and Democrats, who hate business and profit, want to spread that investment around to people who will just copy these parts. Put some thought into this.
We should let the consumer decide the quality of the parts used. The aftermarket has done such a miserable job counterfeiting parts over many years. To this date, You never know what is wrapped up in that package from Taiwan. In a fair market quality would win over insurer forced part options. Let the market, "consumer" decide the fate of their car!
As the earlier comments have stated, this is a cleverly disguised bill that would allow the insurance companies to skimp on repair costs and NOT pass the savings onto the consumer. CrashTalk, a weekly call-in radio show at 8am on Saturdays on am 1090 in Seattle (or stream from www.crashtalk.com) deals with topics such as this, and actually discussed this bill last week. If insurance companies are able to save money by using imitation parts, let it be the consumers' decision.
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