Car insurance and genuine car parts

Everything you need to know about your car insurance and genuine automotive parts.

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Lately, car makers and automotive industry groups have made a big deal about using only genuine parts on your car. As a result, a significant amount of confusion abounds about what components you can actually fit to a vehicle.

This guide will help you understand the difference between genuine and non-genuine parts. You'll also learn how using different components might affect your insurance plus your consumer rights when an authorised insurance repairer works on your vehicle.

GT 350 car

Confusion over genuine name

The Federal Chamber of Automotive Industries (FCAI) launched a campaign a while ago that promotes the use of genuine parts. The Genuine is Best initiative aims to clear up common misconceptions and oversights surrounding buying parts.

Unfortunately, this campaign can make the issue of genuine parts more confusing. The scheme's website uses the term “genuine” for manufacturer-supplied parts. Aftermarket parts makers argue this implies that anything else is inauthentic or somehow unsafe.

Definitions of “genuine”, “OEM”, “aftermarket” or “counterfeit”

There are a number of options when it comes to purchasing parts for your motor vehicle. Specifically:

  • Genuine (or Original Equipment). Genuine parts are what automakers use at the factory when building a car. Genuine components are supplied through the car manufacturers’ dealer network.
    Almost always the packaging will carry the manufacturers’ branding – though in some cases, a sister company may supply the part. This happens when a car shares the same platform (like VW, Audi and Skoda). Genuine parts are often the most expensive on the market.
  • OEM or Original Equipment Manufacturer. This probably won't come as news to you, but car manufacturers do not produce every single vehicle component. Really, a car manufacturer assembles prefabricated parts.
    A company employed by the carmaker to produce these parts is the OEM. A single model may feature components from several different OEMs.
    Typically, OEM parts makers will broker a deal to sell components under their own name and branding. These items are identical to genuine parts but present a substantial cost saving. Garages and repair facilities may favour OEM components thanks to their economy and availability.
  • Aftermarket. Aftermarket parts are those not produced by or connected with the OEM, but they must be of a similar quality to genuine parts, be interchangeable and offer the same functionality. Aftermarket producers may also design and manufacture upgraded performance parts that exceed the operation and standards of an original part.
  • Refurbished/reconditioned. It's possible to purchase genuine, OEM or aftermarket refurbished components. The best ones go through a quality inspection and rebuild process. Common refurbished parts include big-ticket items like engines, turbochargers, gearboxes and steering boxes/racks. It's important to check to see what kind of guarantee comes with these components. Bear in mind that the part could be from any of the above sources or even counterfeited.
  • Used/salvaged. In an effort to cut costs, some workshops may fit used parts, such as those taken from a breakers yard. For older or classic cars, these may be the only option.
    Used parts can offer a substantial saving, but it can be difficult to determine their source (e.g. are they genuine, OEM, previously reconditioned or salvaged once already?). If a garage wants to use salvaged parts, it is important they inspect for damage, wear and proper function.
  • Counterfeit reproduction. You should never under any circumstances purchase spurious copied parts. The quality levels of these parts can vary wildly, to the point of being unsafe. Knock-off part makers may use lower-quality materials and even try to pass them off as OEM.

Parts must be fit for purpose

Legally, all parts sold for use on road-going motor vehicles in Australia must comply with consumer law that specifies they have to be fit for purpose. The Australian Competition and Consumer Commission uphold and enforce consumer rights.

In practice, this means a component must not be dangerous, and must perform its intended function as expected. For example, an alloy wheel that disintegrates upon hitting a small pothole is not fit for purpose, nor is it safe.

The same standards apply to all components whether genuine, OEM or aftermarket.

Which parts will my insurer use?

You can find out which components your insurer will use to repair your car in your insurance policy.

We asked Youi motor insurers how they handle car repairs.

"Youi will not use non-genuine parts that would compromise the safety of the customer or ability for the vehicle to perform at the level it was designed for."

The Youi spokesperson said that they also work with experts who are able to determine OEM parts and non-standard fitments. This may come into play should a faulty or defective part cause an accident.

"Our front-line assessors and suppliers have the necessary training to distinguish between standard and non-standard components in a vehicle. Depending on the unique circumstances of the claim, the relevant expertise would be engaged, whether it be the actual vehicle manufacturer or mechanical expert."

The spokesperson also offered additional insight on how they repair older cars that are out of production.

"The mix of parts used in collision repairs varies greatly depending on vehicle age brackets and make/model mix. For example, on some older vehicles, the only option is high-quality re-used and certified aftermarket parts as manufacturers no longer stock those parts."

Youi repairs also comply with manufacturers’ new car warranties.

"Equally, for vehicles within a manufacturer’s new car warranty, it is important that genuine collision parts are used in repairs. Regardless of how this may apply in individual circumstances, all vehicle repairs authorised by Youi are backed by our quality repair guarantee."

Advice for motorists

When purchasing parts or employing a garage, use common sense. If a component sells for $500 from the dealer and $400 as an OEM-branded part but sells for $100 online, ask yourself why. The $100 is suspiciously cheap.

Only purchase from trusted sellers with good reputations. Sellers outside of Australia may not adhere to the same level of consumer rights regulations.

Also, ask your garage for an itemised invoice including parts numbers. Most garages are willing to do this, and it allows you to check up on the components source.

Finally, if you fit performance-modifying parts, you must inform your car insurer. Failing to do so can invalidate your policy in the event of a claim.

Consult your insurance company before making any modifications because some alterations are only covered under specialised policies, including:

  • Nitro or hydrogen injection systems
  • Custom paintwork
  • Turbocharged or supercharged engines
  • Racing harnesses
  • Roll bars
  • Roll cages

Compare high-performance or sports car insurance here.

Picture: Unsplash

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