Car spare parts war: Motorists warned prices are being jacked up by as much as 1000 per cent

MOTORISTS are paying heftier car repair bills and insurance premiums because the cost of spare parts is jacked up by as much as 1000 per cent.

If you wanted to build a $21,000 hatchback, it could cost more than $100,000 to make out of branded spare parts. Picture: Supplied

EXCLUSIVE

MOTORISTS are paying heftier car repair bills and insurance premiums because the cost of spare parts is jacked up by as much as 1000 per cent.

Australia’s largest insurer has alerted the competition regulator to the rort, saying the bill to build a $21,000 hatchback out of branded spares would be $114,000.

“This is ultimately reflected in repair costs, and therefore consumers’ premiums,” Suncorp says in a submission to the Australian Competition and Consumer Commission’s study of the new car retailing market.

Building a $21,000 hatchback could cost more than $100,000 to make out of branded spare parts.

Suncorp says a European luxury sedan’s small front bumper clip is $20 here but just $1 in the US; a rear exhaust muffler hanger for a mid-range family sedan costs them $140 in Australia versus $16 in America; and the badge on the boot lid of a popular hatchback is $75 here yet is only $11 in the States.

Overall, insurers say the same branded components in the US are 10 to 30 per cent less expensive. Meanwhile, Choice has found “non-genuine” components sold in Australia can be more than a third cheaper than branded parts, despite being identical.

Insurers spend about $2 billion a year on parts, suggesting there is the potential to reduce repair costs — and therefore policy premiums — by hundreds of millions of dollars annually if fixes used more components bought overseas or from Australian providers of non-branded parts.

Some of the 800 parts required to build a car. Source: Suncorp

But automakers have put in place a very effective barrier to doing so — their warranties.

If a dealer or manufacturer can blame an overseas or non-branded part for a fault under warranty, they don’t have to repair the vehicle.

Another alleged barrier is the rules independent workshops (using non-branded parts) must follow to get cars’ computerised system codes, wiring diagrams or repair manuals from automakers. The ACCC is “assessing” whether the access rules are anti-competitive and therefore illegal.

A submission to the car retailing market study from the US Auto Care Association (ACA) says repairs in the new car dealer network there cost about 42 per cent more than fixes at independent workshops.

Branded components from the US tend to be 10 to 30 per cent less expensive compared to Australia.

The ACA was involved in a campaign that in 2012 saw legislation passed that now forces car companies to make all repair information, software and tools available to independent repair shops at fair and reasonable prices.

“The result is a savings to American consumers of $26 billion per year,” the ACA said.

The ACCC is looking at whether Australia should introduce a similar mandatory system.

The Federal Chamber of Automotive Industries said the $141,000 spare parts comparison was “commercially illogical, defies common sense, and adds no value to the discussion”.

The FCAI also said non-genuine parts can be unsafe. “This creates a huge risk for the consumer,” a spokesman said.

Like this reporter’s work on Facebook via this link and follow on Twitter here

NISSAN FIGHTS BACK IN SPARE PART WAR

NISSAN has war-painted one of its V8 supercars with a skull and crossbones and “genuine is best” signage as part of Big Auto’s battle with independent parts sellers.

The Altima’s driver Michael Caruso says “making sure you have the right parts in your car is incredibly important. This way, when you’ve got the family in the car this summer, you know that they are all safe and sound.”

But Australian Automotive Aftermarket Association (AAAA) executive director Stuart Charity said the choice of a supercar for the campaign was ironic.

“If that Nissan had genuine parts they’d be about 18 laps behind every other car,” Mr Charity said.

“They are trying to scare people into only fitting genuine parts on the basis that anything else will kill their family.

Nissan V8 supercar driver Michael Caruso with his Altima featuring the "Beware of Strangers" sign. Picture: Supplied

The Nissan Motorsport Nissan Altima during practice for the Sydney 500. Picture:

“But in almost all cases a genuine part is not made by Nissan,” Mr Charity said. They are made by independents.

Mr Charity said that in many cases, there are only differences between the so-called “genuine” part and the aftermarket alternative is the brand stamped on it — and the price, which is generally 25 to 40 per cent less.

That said, the big carmakers have found counterfeit parts on the market, most notably breakpads containing asbestos that were designed to fit the mega-popular Toyota HiLux. The industry has also uncovered fake alloy wheels that can crack if they hit a pothole and dodgy airbag trigger units.

Motoring bodies questioned the “genuine is best” message being linked to safety.

Australian Automobile Association spokesman Paul Kindermann said “the AAA sees no extra risk to consumers in the use of generic parts provided those parts are fitted by a qualified mechanic and are fit for purpose”.

Originally published as Car spare parts war: Motorists warned prices are being jacked up by as much as 1000 per cent