A New Federal Bill Would Protect Car Owners’ Right To Repair — and It Could Help To Slow Rising Insurance Prices

Rapid developments in vehicle technology have made vehicles safer and more efficient, but vehicle repairs have also become more complex. What might have been a simple solution 20 years ago may now require electrical work, calibration, and specialized labor. And if a repair shop doesn’t have the vehicle information they need to make a repair, they often have to pay for the repair or send it to a more expensive repair shop, which can be costly to the driver or insurance company. It will be passed on to the company.

Right-to-repair laws could reduce two of the hidden costs of car ownership: auto repairs and auto insurance. However, auto industry experts remain divided on how best to protect consumers’ right to affordable and safe auto repair. Many insurance industry advocates support federal legislation that would guarantee consumers the right to repair, but collision repair experts say the bill could protect insurance companies more than it protects customers. claims.

What is the right to repair?

With the improvements in technology in modern vehicles, car repairs require access to vehicle data, repair procedures, and specialized tools more than ever before. According to research from CCC Intelligent Solutions, the average internal combustion engine passenger car in 2024 will have 1,400 to 1,500 semiconductors powering everything from connectivity and infotainment to the vehicle’s powertrain and safety systems. It is equipped with a chip.

Computer chips make modern cars run, but their repairs are more complicated. To tackle most vehicle repairs, technicians need access to resources such as manufacturer-provided repair information, diagnostic equipment, specialized training, and vehicle-generated telematics data. This allows you to diagnose problems, repair them according to the manufacturer’s instructions, and recalibrate your sensors and cameras.

But for independent repair shops, accessing repair data is easier said than done. According to a February 2024 Auto Care Association survey of more than 400 repair professionals, approximately 63% of independent auto repair shops are unable to complete routine daily or weekly repairs due to repair limitations. It turned out to be difficult. 51% said they send up to five vehicles a month to a dealer due to data limitations.

“This is an equity issue,” said Justin Rzepka, executive director of the Consumer Access to Repair Coalition. “It’s all about price.” According to a recent survey by Consumer Reports, most car owners prefer to take their cars to independent repair shops. Independent shops tend to be significantly cheaper than dealer service centers. They are more likely to be willing to negotiate on price. When independent shops are unable to complete vehicle repairs, consumer choice suffers and costs rise.

Complex vehicle repairs cost more

Cars manufactured today are far more technologically complex than they were ten years ago. Even today’s low-end vehicles can contain as many as 100 million lines of software code, according to researchers at the Institute of Electrical and Electronics Engineers (IEEE). Infotainment systems increasingly require larger touchscreens. Safety features rely on dozens of internal cameras and sensors. Semiconductor chips power vehicle components, from power steering to fuel injectors to torque sensors.

Consulting firm Deloitte Touche Tohmatsu Limited predicts that electronic systems could account for up to 50% of a new car’s price by 2030. And research shows they are already contributing significantly to historically high repair costs.

According to AAA, repair costs for advanced driver assistance (ADAS) components, such as collision mitigation systems, account for an average of 37.6% of total vehicle repair costs. For minor frontal crashes, the average cost to repair ADAS components is $1,541, or just over 13% of the total repair cost.

Repair costs include more than just parts. Technically complex vehicles require more labor hours. This is primarily because more repair processes require some sort of diagnostic scan or recalibration of sensors and cameras after repair. CCC Intelligent Solutions found that approximately 60% of repair assessments for vehicles manufactured in 2014 required scanning and only 6% required calibration. For vehicles manufactured in 2023, more than 71 percent of assessments required a scan and nearly 28 percent required a calibration.

A Brief History of Auto Repair Rights Laws

The early 2000s saw the first movement of the right to repair movement in the U.S. auto industry. But automakers have long opposed such laws. Since 2014, the industry has operated on the basis of a memorandum of understanding signed by key stakeholders from the automotive manufacturing industry and repair organizations. Under the non-binding agreement, the automakers agreed to share vehicle data, tools and other information needed to repair vehicles starting from the 2002 model year. This memo was reaffirmed by the Automotive Repair Data Sharing Commitment, updated in 2023.

The voluntary agreement affirms that “consumers should have access to safe and appropriate repairs throughout the lifecycle of their vehicle” and promises to “guarantee consumer choice in vehicle repair decisions”. There is. However, the contract states that diagnostic and repair information “shall be available for purchase” by vehicle owners and independent repair facilities. In other words, under this contract, the automaker reserves the right to charge you for the resources that you or your mechanic need to repair your car.

For many advocates, including Mr. Rzepka and the Central African Union, the industry’s voluntary agreement is not enough. In 2020, Massachusetts voters passed a new law requiring automakers to give vehicle owners and independent shops access to the same data and diagnostic and repair information that dealers have. Approved. Three years later, a similar law was passed in Maine on a ballot initiative. Automakers have filed suit in federal court to block Massachusetts’ data access law, but Maine’s bill has not yet been censured.

HR 906: Enter Repair Act

In February 2023, Neil Dunn (R-FL) introduced the Right to Fair and Professional Automotive Industry Repair Act (HR 906) in the House of Representatives. HR 906 — better known as the Repair Act — is a bipartisan federal bill focused on vehicle owners’ access to vehicle repair information. Provisions of the law include:

• Vehicle owners and their designees can access vehicle-generated data without fees, licenses, or other restrictions.
• Standardized access platform for vehicle-generated data
• Access to critical repair information and tools at “a fair, reasonable and non-discriminatory cost”
• Prohibits manufacturers from requiring vehicle owners to use OEM parts for non-warranty repairs.

In other words, the Repair Act requires vehicle owners to have free access to any data their vehicle generates, and manufacturers to protect their vehicles from repairs, including prohibiting consumers from using aftermarket parts for repairs. It stipulates that unreasonable barriers or costs should not be imposed on the resources needed for . HR 906 cleared a markup by the House Energy and Commerce Subcommittee on Innovation, Data, and Commerce earlier this year. The Central African Union expects a full price increase from the Energy and Commerce Committee later this month.

According to CAR Coalition polling, HR 906 is popular on both sides of the aisle. “Affordable car repair shouldn’t be a political issue,” Rzepka says, and Congress seems to agree. As of September 2024, this bill has a total of 56 co-sponsors, 28 Democrats and 28 Republicans.

The REPAIR Act also has high support from consumers. A survey sponsored by the CAR Coalition in summer 2023 found that more than 90% of consumers want to choose where and by whom their car is repaired, and 75% would like to see legislation that would prevent manufacturers from restricting data access. I answered that I support it.

Can the Repair Act reduce car insurance costs?

Freedom of choice is not the only thing that makes repair methods appealing to consumers. There may even be a possibility of a cheaper repair. Industry experts say the right to repair could be the key to lowering auto insurance, the cost of owning a car.

Tony Cott, director of auto and underwriting policy at the National Association of Mutual Insurance Companies, said the federal government’s right to claim repairs could mean relief from relentlessly rising auto insurance premiums. “On the insurance company side, we believe this is one of the best ways to reduce the cost of owning a vehicle, which in turn reduces the cost of insuring the vehicle,” he says.

As of September 2024, the average cost of auto insurance in the United States is $2,348 per year for full coverage and $639 per year for minimum coverage. The cost of auto insurance is based in part on how much the insurance company expects to pay on a claim, and if auto repair shops have to pay more for tools and data, they costs will increase. Repair restrictions can also extend the time required to complete repairs and increase insurance costs. According to the 2023 JD Power U.S. Auto Claims Satisfaction Study, the average repair cycle time for auto insurance claims is just over 23 days, an increase of 36% from 2022. Over the same period, the average cost of auto insurance increased by 20 days. percent.

However, while it is true that longer claims times are one of the main drivers of rising insurance premiums, access to vehicle data may not be the underlying issue driving this trend. A U.S. Government Accountability Office report found that 9 out of 14 independent repair workers experience some degree of difficulty accessing vehicle data, but the report’s authors say, It is difficult to determine how common these restrictions are.

“I don’t think this is an access issue,” says Aaron Schulenberg, executive director of the Society of Collision Repair Specialists (SCRS), one of the signatories to the 2023 Industry Data Sharing Pledge. In his view, the industry’s voluntary efforts are working. Collision repair shops, including independent shops, will have access to the data, tools and information they need to perform repairs. “On a daily basis, we don’t have members calling us saying they don’t have something they need,” he says.

Instead, Mr. Schulenberg said, insurance companies are denying accident shop owners the fees they need to complete diagnostic and repair services in a safe and proper manner, so customers are forced to move to dealerships and other shops. He said that he often hears of people being turned down. “There is nothing in the Right to Repair Initiative that prevents insurance companies from doing that,” he says.

Who bears the cost of vehicle complexity?

When vehicle complexity increases the cost of repairing a car, that money has to be spent somewhere. For independent repair shops, the cost of vehicle complexity can come in the form of increased overhead if there is no repair method that forces manufacturers to set fair prices. Under a voluntary industry initiative, diagnostic and repair information, vehicle data, tools, education and training are all made available to independent shops, but they all come with a price tag.

Schulenberg says access costs don’t necessarily impose an undue burden on repair shops. “Providing adequate service for any job requires the necessary investment in a professional environment,” he points out. However, for some independent shops, the cost of doing business can become unsustainable given the repair limitations. The Auto Care Association found that vehicle data limitations cost independent auto repair shops approximately $3.1 billion annually, and 45% of independent auto repair shops spend an average of $2,400 or more purchasing automaker data and tools. We estimate that many people have reported that they are suffering from the virus.

Some of these costs are passed on to insurance companies in the form of larger claims that take longer to resolve. It also creates additional costs for the insurance company beyond the repair itself, such as extending the rental period. A standard rental reimbursement guarantee in an auto insurance policy covers the cost of a rental car during a 30-day repair period. However, policyholders often rely on rental cars for more than 30 days until the claim is resolved. “We’re seeing people becoming exhausted more often than ever,” Kott said.

Finally, the costs of vehicle complexity are passed on to consumers as insurers raise prices in response to rising claims processing costs and as policyholders reach their coverage limits. Schulenberg points out that insurance companies can choose to deny charges for the use of specialized tools and resources needed for more complex repairs. Consumers may then have to pay more to have their cars safely repaired.

“The narrative needs to change,” Schulenberg said. Rather than focusing on whether repair shops have access to data (which, in his view, they do), he focuses on other barriers to safe and affordable vehicle repair. He argues that it’s time to focus. “If this is about repairs, we should ensure that consumers’ rights to safe and thorough repairs are protected.”

So how should I repair my car?

While experts may differ on whether the Repair Act is the ideal solution to the industry’s woes, there should be no barrier between consumers and safe vehicle repair. Well, I agree.

“Everything we do starts and stops where it’s safe,” Rzepka said. “Safety first” is at the forefront of the Central African Union’s statement of key principles. Kot agrees. “Our members want their cars fixed, and they want them fixed right.”

With the complexity and cost of auto repair increasing and repair laws still under discussion, it’s important to know how to assert your right to a safe and thorough repair. To get your car repaired without cutting corners or risking a lengthy claims process, consider these tips.

• Review and understand your insurance coverage. Carefully read the details of your car insurance policy to understand what is and isn’t covered. If you have comprehensive collision coverage, you can also review your deductible and decide whether to raise or lower the cost of your claim.
• Build relationships with auto repair businesses in your area. If your car is damaged, you have a legal right to take it to a repair professional of your choice. Your insurance company may recommend shops within its own network, and it’s your choice whether to follow that recommendation. Additionally, working with a shop you know and trust can make it easier to save money on safe and proper repairs.
• Get multiple repair quotes. Make sure you understand all of the costs you (or your insurance company) will be paying before you agree to have a repair shop perform repairs. Especially for complex repairs, it’s worth getting multiple quotes, including a breakdown of part and labor costs for each part of the process.
• Work closely with your insurance company if you need to file a claim. If your car requires covered repairs, regularly contact your insurance company and the adjuster handling your claim to ensure the repairs are properly covered.
• Be prepared to negotiate if your claim is denied. If your insurance company denies all or part of your claim, you have options. You can appeal the decision and negotiate with the adjuster to resolve the dispute.