Dear Attorney General: T

he Automotive Recyclers Association (ARA) represents over 4,500 profes- sional automotive recyclers across the United States and in 14 countries

internationally. Recently some in the collision repair industry have made highly publicized mischaracterizations about the professional automotive recycling industry and the recycled original equipment (OEM) parts that recyclers pro- vide to the automotive parts supply chain. You may have seen some of these comments in a February 11, 2015 Anderson Cooper 360 broadcast on CNN in- vestigating alleged steering practices by insurance companies. It is on behalf of the professional automotive recycling and ARA member businesses in your state that I write to you to express concern with these gross misrepresenta- tions and to set the record straight about the important role of genuine, recy- cled original equipment manufacturer (OEM) parts in today's automotive parts market.

The professional automotive recycling industry has long been an advo-

cate for consumer choice, and as such ARA supports a robust automotive parts supply chain. Genuine recycled, OEM parts sold by ARA member facilities play a critical economic and environmental role in the market, providing consumers with an important alternative to expensive “new” OEM parts. Following are several important facts about recycled OEM parts that are

critical for you to know so that public comments, press releases or actions taken by your office related to the professional automotive recycling industry and recycled OEM parts are well informed and support the full spectrum of parts choices for the tens of thousands of hard working men and women in your state: • Automobiles are among the most recycled commodities in today's

marketplace and that the reutilization of quality OEM parts provide signifi- cant savings of natural resources. Professional automotive recyclers annu- ally collect and reuse or recycle millions of gallons of motor vehicle fuel, motor oil, engine coolant, and window washer fluid; • The reutilization of quality, OEM automotive parts is a $32 billion in-

dustry in the United States; • Each day over 500,000 recycled OEM parts that were designed and

built to meet the automakers original requirements for fit, finish, durability and safety are sold directly to consumers as well as to repair shops and au- tomobile dealers who are very well aware that recycled OEM parts are being used in the repair of their vehicle; • Recycled parts play an important economic role in the marketplace. Without their existence, many times there would be no alternative part op- tions to an expensive “new” part available for hard working Americans – leaving them at the mercy of automakers who would be in a monopolistic position in setting the price for that part; • Professional automotive recycling operations have robust product as-

surance and quality control procedures in place to identify parts that do not meet industry accepted standards. These operational safeguards distinguish the parts sold by ARA members from what the CNN segment referred to as “junkyard” parts; • Most insurance policies allow for the utilization of recycled parts in ve-

mercy of automakers who would be in a monopolistic position in setting the price for that part;

• Professional automotive recycling operations have robust product assur- ance and quality control procedures in

hicle repairs and educated consumers know that recycled OEM parts offer quality, safe parts at a fraction of the cost of new OEM parts; • There are 3.5 million motor vehicles deemed to be a total loss by in-

surance companies annually. While this figure is enormous, the number would be far greater if vehicle repairs did not utilize recycled OEM automo- tive parts; After five years of ownership, a motor vehicle will have decreased in value by an estimated 63 percent. Based on the cost of replacement parts and a motor vehicle's depreciation in the marketplace, a 7 year old motor vehicle that is involved in an accident will be declared a total loss 75 percent of the time; and, • With the current length of motor vehicle loans as long as 60 or 72 months, there are many cases where a consumer may owe more than what they will get from an insurance company if their vehicle is declared a total loss. Utilizing recycled OEM parts in automotive repairs can save consumers' vehicles from being declared a total loss, thus helping extend the lives of many vehicles that would be prematurely taken off the road and keeping consumers from being upside down on their motor vehicle loans. It is unfortunate that a number of collision repair entities are trying to for-

ward the false premise that the products professional automotive recycling facilities sell are “nothing more than junk yard parts.” That is simply untrue. Parts sold by professional automotive recycling facilities are recycled, gen- uine, original OEM parts that meet OEM requirements. They are OEM parts, de- signed by the OEM, and built to meet the OEM requirements for fit, finish, durability, reliability and safety. Recycled OEM parts are a valued commodity and in significant demand.

The utilization of recycled parts could be even greater with increased support from the insurance community, repairers and policymakers, including your office. The most recent statistics reported in the Mitchell International’s In- dustry Trends Report indicate that recycled OEM parts accounted for only 13.21 percent of the average dollars used per appraisal by Mitchell-equipped esti- mators. It is critical for our nation's policymakers and states' chief legal offi- cers to recognize the many economic and environmental benefits of utilizing recycled parts. In addition to industry recognition of the definition and value of OEM re-

cycled parts, state court actions also have ruled on this issue. Recently, the West Virginia Supreme Court of Appeals affirmed the use of salvage/recycled OEM crash parts in vehicle repairs, found that recycled parts are diametrically different from aftermarket parts and applauded automotive insurers for using measures to reduce premium costs for their customers. If your office does plan to address issues related to the professional auto-

motive recycling industry, ARA would appreciate being contacted to help pro- vide state officials critical background information on the automotive parts supply chain and repair processes. Given the complexity of issues involved in the automotive insurance and re-

pair marketplace, we look to your leadership to ensure that quality OEM re- cycled parts that are important in the marketplace are not mischaracterized in a way that diminishes their utilization in the professional repair process. Sincerely, Michael E. Wilson, CEO, Automotive Recyclers Association

place to identify parts that do not meet industry accepted standards. These operational safeguards distinguish the parts sold by ARA members from what the CNN segment referred to as “junk- yard” parts;

• Most insurance policies allow for the utilization of recycled parts in vehicle repairs and educated consumers know that recycled OEM parts offer quality, safe parts at a fraction of the cost of new OEM parts.

March-April 2015 | Automotive Recycling 9