ASA Asks State Officials to Review State Farm’s Mandatory Parts Procurement Program

by ASA | October 1, 2013 4:49 pm

Attorneys General, Insurance Regulators Should Review Consumer, Small-Business Impact

WASHINGTON, D.C., Oct. 1, 2013 – The Automotive Service Association (ASA) has sent letters to state insurance regulators and state attorneys general regarding State Farm’s nationwide rollout of changes in its direct repair program, “Select Service.” The letter requests that state regulators review State Farm’s mandate to use the PartsTrader LLC parts procurement program to determine if it violates state law.

Under the rollout, which will be completed by 2014, State Farm will mandate that shops participating in its Select Service program use PartsTrader’s software to electronically order parts.

ASA’s position did not come without much input and forethought. ASA contacted State Farm and PartsTrader after the pilot program was made public, expressing members’ concerns with the program. ASA dispatched a team of collision repair leaders to State Farm’s headquarters to discuss the pilot, the impact of the program on collision repairers and any expanded program rollouts.

Dan Risley, ASA executive director, states in the letter:

“We believe this mandatory parts procurement program stifles competition and harms both the consumer and the small businessperson.”

State Farm’s mandate has the potential to impact repairers in the following ways:

•  Limit a repairer’s right to choose the parts vendors from whom they purchase parts;

•  Limit a repairer’s right to choose an electronic parts ordering vendor;

•  Increase the number of days to repair the customer’s vehicle;

•  Increase the indirect costs to the consumer;

•  Increase the repair facility’s administrative time;

•  Negatively impact the repair facility’s profitability;

•  Reduce local automotive parts sales, negatively impacting local economies.

To view the full text of the letter, visit ASA’s legislative website at www.TakingTheHill.com.

The Automotive Service Association is the largest not-for-profit trade association of its kind dedicated to and governed by independent automotive service and repair professionals. ASA serves an international membership base that includes numerous affiliate, state and chapter groups from both the mechanical and collision repair segments of the automotive service industry.

ASA advances professionalism and excellence in the automotive repair industry through education, representation and member services. For additional information about ASA, including past news releases, go to www.ASAshop.org, or visit ASA’s legislative website at www.TakingTheHill.com.

 

Click here[1] to view the Letter to State Attorneys General and Insurance Commissioners


Contact: Kaitlyn Dwyer
(202) 543-1440
km.dwyer@att.net

For Release: Immediate
News Bulletin 13.31

Endnotes:
  1. Click here: https://asashop.org/wp-content/uploads/ASA-Request-State-Farm-PartsTrader-Review.pdf

Source URL: https://asashop.org/asa-asks-state-officials-review-state-farms-mandatory-parts-procurement-program/