Have you ever found yourself in a position where your heavy equipment was repaired and the parts used were aftermarket? Has that label frightened you, and your first reaction is of the lost worth of your equipment due to the usage of non-OEM parts? Just because an installed item is aftermarket does not necessarily mean you are getting a depreciated product, and in some cases, the aftermarket part is a better solution. Let's compare aftermarket versus OEM parts.
What exactly are aftermarket parts?
Aftermarket parts are new parts manufactured by a company other than the original equipment manufacturer (OEM). The parts are used to replace broken parts in equipment and vehicles and are expected to perform equally or better.
What are the distinctions between aftermarket parts and OEM?
If they are high-quality aftermarket parts, the only difference should be the company selling them and the amount they are being charged. In some cases, they may be of higher quality. They should not be used if they are of poor quality or do not have a comparable fit and finish. If an aftermarket item is more expensive, there is no need to utilize it unless the OEM part is in short supply.
What are the benefits of using aftermarket components in heavy machinery repairs?
They are utilized in the same way that they are in auto repairs. They are typically less expensive and, in some cases, may provide a better warranty. Betterment is generally not taken on aftermarket parts that are subject to wear and tear. As a result, both the insurance company and the vehicle owner save money.
What situations necessitate the adoption of an aftermarket part over an OEM part?
This varies according to state insurance requirements, policy language, and insurer. If state insurance requirements do not ban the use of aftermarket parts, they can and should be used where appropriate. State laws and regulations must be observed. There may be restrictions and conditions associated with their use. For example, the state may demand that the insurance provide a guarantee that is equivalent to or greater than the warranty provided by the original equipment manufacturer. State regulations may require the vehicle to be a specific number of years old or to have traveled a certain number of miles.
What impact do aftermarket parts have on the fair market value, performance, and other aspects of the vehicle?
If they are high-quality aftermarket parts, their use will have no effect on the value or performance of the vehicle. Disclosure of their use at the time of resale is not necessary unless mandated by law, and their use is minor. Aftermarket parts have been condemned as a ruse employed by insurance companies to pay less on claims and to mislead vehicle owners. There is minimal debate about their use outside of the context of an insurance claim, and they are more routinely used for vehicle repairs than OEM components. This is especially true for mechanical parts.
Who decides which parts to use (OEM vs aftermarket)?
The car owner always gets the final say on what parts are installed on their vehicle. Except where prohibited by state law, the insurance company has the last say on which part prices will be utilized to determine the amount payable on the claim. The insurance company cannot force the vehicle owner to use aftermarket parts for repairs, nor can the vehicle owner force the insurance carrier to pay for OEM parts. To lessen the likelihood of controversy and dispute, certain insurance companies have altered their policy language to clarify their position on the usage of aftermarket and recycled parts.
Trying to interpret state laws and policy jargon can be a tedious and difficult process; nevertheless, you are not alone. Heavy Equipment Claims Specialists are a devoted and experienced staff at Veritas Administrators. To learn more about our ability to collaborate with you on appraisals, click the "Learn More" button or request a phone call.