Does Your Auto Insurance Only Cover Aftermarket Parts Or Original Manufacturer Parts?

Auto accidents teach drivers many expensive lessons about their insurance policies, and why drivers should understand exactly what they’re paying for — before an accident happens. For example, the cost of knowing if your policy covers towing or rental coverage can be hundreds of dollars if the driver is not covered for such resources. Furthermore, when it comes to actually repairing your vehicle and returning it to the original pre-accident condition, the costly lesson becomes: Does your auto insurance only cover aftermarket parts or original manufacturer (OEM) parts?

Demonstrated best in a repair estimate, the difference between aftermarket parts and OEM parts is generally cost alone, however, we promptly alert all drivers: “buyer beware.” Comparing costs between OEM and aftermarket parts is not always an apples-to-apples comparison. There are potential hidden future costs and risks associated with a vehicle’s insurance coverage, sustained resale value, and even safety.

OEM parts are a vehicle’s “original” part, and are literally produced by the same auto manufacturer. Aftermarket parts on the other hand, are a replicated part manufactured by a company other than the original. As aftermarket parts are an affordable alternative to the expensive OEM parts, insurance companies will not always reimburse 100% of the repair costs when OEM parts are used. In fact, some carriers require the policyholder to pay the difference between the OEM part and the otherwise fully capable non-OEM substitute part.

According to many car owners, aftermarket parts do not necessarily restore the car to its pre-accident condition. Some believe that aftermarket parts decrease the resale value upon trade-in or private resale. Even worse, for those who lease their vehicles, using aftermarket parts can complicate matters at the completion of their lease contract. If the leased vehicle is returned with aftermarket parts, the lessee faces the risk of not returning the vehicle in the original condition.

An industry rule-of-thumb is that for more expensive luxury vehicles, it is recommended to maintain your vehicle’s resale value with OEM parts, especially considering the fact that car dealers monitor the repair history of most vehicles. For those owners that do not have aggressive resale objectives or have a car that is not worth much, then aftermarket parts may be the best route to go.

Understanding the difference between aftermarket and OEM parts is often overlooked when purchasing an insurance policy. Don’t wait until an accident happens to learn what your policy actually covers. Take this time to review your insurance policy and use this knowledge to shop for a policy that best covers your needs.