June 23, 2009
The Honorable Ron Wyden
223 Dirksen Senate Office Building
RE: Support “Repair Clause” Legislation
Dear Senator Wyden:
With the summer travel season underway, Oregon seniors are looking forward to hitting the road to visit family and friends. As these motorists — and others — flood our highways, fender benders are, unfortunately, inevitable. Amid the shuttering of car dealerships and increase in gas prices, it is critical that we ensure that consumers have access to high-quality, low-cost automotive collision replacement parts (e.g., bumpers, hoods, fenders, etc.) for the purposes of repair following collisions. An automotive “repair clause,” which would preserve competition in the automotive aftermarket, would keep Oregonians employed, our seniors on the road, and your constituents’ repair bills down.
Aftermarket competition affords a number of benefits to consumers. Alternatives cost typically 26 to 50 percent less than their car company equivalents, saving consumers $1.5 billion a year. These savings may mean your constituents do not have to choose between repairing their vehicles and purchasing necessities such as groceries and medication. For older Americans on fixed incomes, these savings are critical.
Research shows that since Ford earned a temporary monopoly on certain parts for the 2004-2007 F-150, the car companies have doubled the number of design patents they have obtained for collision parts. If enforced, these restrictive 14-year patents can block competitors from producing those common parts consumers need most after a crash and then raise the price of their parts.
A King County/city of Seattle study predicted the number of poor seniors will double by 2025. For these citizens, who struggle daily to stretch their dollars, the effects of a monopoly on collision replacement parts would be severely damaging. A monopoly will force insurers to raise the cost of premiums by $3 billion. As repair costs rise, insurers may classify more vehicles as “total losses” because it will become so expensive to repair a vehicle that “totaling” is the better solution. As we, as motorists, choose higher deductibles to cope with these rising rates, more of these costs will come out of our pockets.
In the 110th Congress, Representative Zoe Lofgren (D-CA) sponsored H.R. 5638, which sought to enact “repair clause” legislation. RetireSafe is a strong proponent of such legislation, along with consumer groups like Consumer Federation of America, Consumers Union, and Public Citizen. Major auto insurance companies and their trade associations also support this important consumer measure.
Now we need your help in the Senate to preserve an industry that for more than 60 years has supported local economies and provided consumers with quality, affordable repair options. Please let me know if I can provide further information on an issue that is critical to the well-being of Oregon’s seniors.
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