The Auto Body Association of Connecticut (ABAC) presented a position statement to its members Sept.11 calling the State Farm PartsTrader program "bad for repairers, part manufacturers, and most importantly, consumers." Here is their unedited position statement:
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The Auto Body Association of Connecticut (ABAC) stands with our brother and sister organizations across the country decrying State Farm’s PartsTrader program. The endeavor is a wolf in sheep’s clothing. It is bad for repairers, part manufacturers, and most importantly, consumers. The only two enterprises in place to profit – and profit handsomely – are State Farm Insurance and PartsTrader.
PartsTrader is a web-based, collision part sourcing, quoting and ordering system. According to its website, “PartsTrader is a tool to improve the collision replacement parts sourcing, quoting and ordering process. We are not a parts retailer. We facilitate the matching of collision repairers with replacement parts suppliers.” Currently, PartsTrader is open only to State Farm Select Service repairers and parts suppliers nominated by Select Service repairers. According to PartsTrader, however, its long-term goal is to make PartsTrader available to the entire U.S. collision repair industry.
The idea, as we see it, is to hoodwink the part suppliers and repairers into negotiating away their respective profit margins in the name of greater profits for State Farm. Despite the program being sold as a benefit to repairers and consumers, it quite clearly benefits neither. There are already programs in place to ensure competitive pricing. What PartsTrader does is infuse a grossly inefficient process at the expense of the repairers and OEM vendors. Thus, not only is the program redundant, it is also inefficient. What is more, insurers simply cannot continue to draw profits from an already besieged industry without further affecting quality and safety. It just can’t happen. Similar to what is happening in the health care market, the insurer model of perpetually taking in more premiums, while perpetually finding new ways to pay less on claims, is fundamentally corrupting both industries.