Automotive enthusiasm fuels the aftermarket, and it’s this constant desire to improve their rides that supports continued sales for the aftermarket in good times and in bad. With this ever-evolving passion, it is no wonder that there is a consistent flow of used parts in the marketplace.
But do these purchases come with risk?
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In all circumstances, what one gets from purchasing new parts from a manufacturer is a guarantee that the parts have been designed and fit the specific application stated. Most provide a favorable warranty, at times supporting full replacement. With used parts, it’s a big unknown.
The seller may say that the part “came off this” and told that “it should fit that,” but can one be sure?
The fact is, it can be a rocky road navigating the path to support your customer’s desire to build with used parts motivated by a well-respected budget. One of the biggest challenges is the failure to warn defense that can be assumed when buying new.
Most manufacturers spend significant resources to ensure the consumer is educated on the proper usage of the part to ensure maximum performance outcome. Carefully worded installation instructions and warning disclaimers are included to support their desire to maintain consumer safety and protect their brand. Knowing the part’s intended purpose is critical to a positive outcome. When the consumer isn’t aware of these acknowledgments, the responsibility is put back on the installer to ensure this knowledge is shared accordingly.
In the end, the largest risk one faces when selling and installing used parts is the unknown of whether it is safe.
Fractures due to over-torquing, heat impairment, poor maintenance or blatant misuse can all contribute to product failure.
The matter at hand isn’t if an insurer will deny a case where the used part allegedly contributed to bodily injury or property damage, rather whether an insurer can bring the original manufacturer into the case to share in its responsibility, leaving the garage owner to deal with rising claim values that could impair securing competitive insurance upon renewal for years to come.
So, before engaging in any commerce dealing with used parts, take a moment and ask these five questions.
- Is it in the original packaging, and can a manufacturer be contacted to ensure design/application?
- Does the consumer possess installation instructions, warranty registration, etc.?
- Can the part be thoroughly inspected to ensure it is not impaired?
- Is a procedure in place where the customer acknowledges and waives their rights should a part fail?
- Have you checked your liability policy’s language to see if there is anything that would limit coverage?
In the end, like racing, the assumption of risk is on the beholder. It is strongly recommended that garage owners take every precaution to protect themselves and their customers before using used parts.
Alliant note and disclaimer: This article is designed to provide general information and guidance. Please note that prior to implementation, your legal counsel should review all details or policy information. Alliant Insurance Services does not provide legal or tax advice, or legal or tax opinions. If a legal or tax opinion is needed, please seek the services of your own legal or tax advisor. This article is provided on an “as is” basis without any warranty of any kind. Alliant Insurance Services disclaims any liability for any loss or damage from reliance on this document.