General Motors Service Parts Operations
Comparative Vehicle Resale Value Study
Conducted by: Campbell & Company and Roush Technologies
KEY SURVEY RESULTS
- Nine out of ten professional used car appraisers selected the vehicle equipped with new genuine GM Parts as having a higher value than the vehicle with imitation parts in a 14-city coast-to-coast study. Nine out of ten consumers preferred the vehicle outfitted with new genuine GM Parts and devalued the vehicle with imitation parts.
- Those professional appraisers reported an average reduction of $740 from NADA wholesale prices for the vehicle equipped with imitation parts.
- Those consumers reported an average reduction of $1670 from NADA retail prices for the vehicle equipped with imitation parts. Twenty million vehicles are sold each year in consumer (non-family) transactions.
- The resale value study showed that when imitation parts are used, they caused a loss in vehicle value at resale or lease end according to 90 percent of the study's appraisers. Of particular concern are the nearly 20 percent of the study's consumer appraisers who would not buy the vehicle repaired with imitation parts even at a reduced price.
- It took a trained auto body technician nearly two additional hours to achieve an acceptable fit when installing the imitation parts on the test vehicle vs. the time spent installing new genuine GM Parts on the other vehicle.
DETAILS OF THE STUDYOverview:
The study was conducted from September 12 to November 7, 1995, and involved 410 automotive professionals -- independent, GM and non-GM dealership used car managers, vehicle appraisers and auction buyers -- and 362 consumers, each of whom had purchased or sold a used vehicle worth $5,000 or more within the past three years. Seventy-six percent of the professional respondents had more than five years of vehicle appraisal experience. As a group, they appraise nearly 9,800 vehicles each week, an average of just under 24 vehicles per appraiser. Sessions were held in these 14 test markets:
- Boston, Buffalo, Chicago, Cincinnati, Cleveland, Denver, Miami, Minneapolis, New York, Philadelphia, Pittsburgh, Portland, Seattle and Washington D.C.
Preparations prior to the study:
The fenders, hood, bumper reinforcement bar, bumper absorber, fascia and grille from the front ends of both 1994 Cavaliers were removed. New genuine GM Parts were used by a collision repairer to replace these parts on one of the vehicles. Certified Automotive Parts Association (CAPA) imitation parts were sought out for the other vehicle, but only CAPA fenders were located and installed. All other imitation parts used were non-CAPA certified. After standard prepping, painting and installation by the same collision repairer, the exterior parts identically marred using templates to simulate scratching and stone chipping. The parts were then removed, subjected to the equivalent of three and a half years (38,500 miles) accelerated cosmetic corrosion aging using standard industry test procedures, then reattached to the vehicles by a collision repairer.
How the study was conducted:
The vehicles were placed side by side in a display area. Participants, who were only advised they would be involved in a vehicle resale value study, were read instructions and asked to complete a series of forms. The hoods, trunks and doors of both vehicles were opened at predetermined times so participants could view the vehicle interiors. Odometers were advanced to 38,500 miles on both vehicles. Only after all forms had been collected were participants advised of the difference between the two vehicles.
Wholesale and retail National Automobile Dealers Association trade-in allowance figures were provided as the benchmark values from which reductions were calculated.
Nine out of ten participants preferred the vehicle equipped with new genuine GM Parts to the one outfitted with imitation parts. While the professionals indicated a $740 average reduction in resale value for the vehicle repaired with imitation parts, by market the average reduction ranged from $519 in Miami to $999 in Portland. Consumers indicated an even greater average resale value reduction -- $1,670.
The resale value study showed that when imitation parts are used, they caused a loss in vehicle value at resale or lease end according to 90 percent of the study's appraisers. Of particular concern are the nearly 20 percent of the study's consumer appraisers who would not buy the vehicle repaired with imitation parts even at a reduced price.
There were three relatively consistent areas identified by both groups as reducing value on the vehicle with imitation parts. The first and most apparent was "red rust" and paint bubbling, which appears on imitation sheet metal parts when uncoated steel is used instead of galvanized steel, which provides superior corrosion protection.
The second area was general fit. Because of the basic dimensional inaccuracies of the imitations, uneven gaps and edges were readily apparent. Finally, paint fading on the imitation fascia also was obvious because the new genuine GM replacement fascia was molded in its final color, while the imitation had to be painted.
A by-product of the study that should be of particular interest to collision repairers is that it took nearly two additional hours to prep and install the imitation parts vs. the time spent installing the new genuine GM Parts. The testing report details the variety of quality problems the technicians encountered in trying to achieve a finished repair with the limitations that would be equivalent to the repair with the new genuine GM Parts. For example, both CAPA fenders had to be hammered and ground on their top surfaces at the hood line to remove outward dents, and a pry bar was needed to achieve the correct silhouette between the trailing edges and door lines. The imitation hood required filler compound (to raise the right hand center line to an acceptable level), sanding and re-priming.
This study helps fill a major gap -- resale value reduction -- that has existed in the new genuine GM Parts vs. imitation collision parts debate. This comparative testing and that conducted by other vehicle manufacturers, repair shops and independents has consistently shown the substandard quality of imitation parts, and complaints about the quality of imitations by professional collision repairers are well known. This study gives insurance companies and consumers the facts that clearly show the few dollars they may save by specifying imitations for repairs is substantially offset by the reduction in vehicle resale value for their policyholders.
We think consumers will agree that $740-$1,670 is a considerable amount of money to lose on a 1994 Cavalier, so they should think twice before having their vehicle repaired with imitation parts. Considering that the average price of a new vehicle is about $20,000, just imagine how much consumers could stand to lose if imitation parts were used to repair that vehicle or one with an even higher price tag!!!
This Published Document is an "Executive Summary" of a 50+ page Report.
Full Detailed Report Available Upon Request.
Communications GM Service Parts Operations 6060 West Bristol Road
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