Almost every state restricts the use after-market parts for crash repairs, say analysts, and these restrictions promote the monopoly of Original Equipment Manufacturer (OEM) parts. In particular, some states prevent auto insurance companies from offering their customers a policy that would use non-OEM parts for accident repairs. By eliminating insurance options, such legislation forces consumers to pay higher car insurance premiums.

Until the mid-1980s, consumers or auto body shops could purchase new replacement crash parts only from the automobile manufacturer. Manufacturers took advantage of their monopoly position by charging above-market prices for replacement parts. In response to escalating prices, a new mark et emerged, with independent parts manufacturers offering "after-market" replacement parts at substantially lower prices.

• As a result of competition, the prices of parts subject to competition decreased substantially, usually in the range of 25 to 40 percent, while prices in non-competitive markets continued to increase.

• For example, the noncompetitive price of a front door for the Chevy Caprice increased by 37.8 percent from 1982 to 1987; but during the same time period the competitive price for a Chevrolet Pickup front door decreased by 29.1 percent.

• In 1987, the Certified Automotive Parts Association (CAPA) was founded to counter claims by auto manufacturers that all after-market crash parts are of inferior quality and/or unsafe.

CAPA is an independent, non-profit standards-setting organization established to certify the quality of parts used for auto repairs. CAPA's seal of approval ensures consumers, body shops, and insurers that after-market parts must meet or exceed manufacturer requirements.

The establishment of and adherence to CAPA standards has greatly enhanced the quality and safety of after-market parts. But analysts warn that restrictions on the use of non-OEM parts may spread.

Source: Steven J. Sinkula, "Crash Replacement Parts: After-market or No Market?" Capitol Comment Number 199, August 14, 1998, Citizens for a Sound Economy Foundation, 1250 H Street, N.W., Suite 700, Washington, D.C. 20005, (202) 783-3870.