We’re in the beginning weeks of November already!  We have several details on new projects to share with you, along with some safety tips, so we decided to do an old fashioned “This and That” kind of post.

Safety Tip:  Fall and winter months open up hunting season for deer.  We’re sure everyone has seen news footage of the damage that can happen when a vehicle hits a deer.  Vehicles can be totaled and both humans and wildlife can come to serious physical harm.  If you’re in an area where hunting is common, be mindful as you’re driving.  Gunfire can startle all manner of wildlife into darting out across a road unexpectedly.  While you can’t ever be fully prepared for such an occurrence, driving through those areas a bit more slowly might allow you to have a bit quicker reaction time to avoid a collision.  Of course, if you do experience such an accident, Dalton Collision is always here to help you with your repair needs.

If you’re following our Facebook fan page, then you’re aware that we’re running a fun weekly Tennessee Trivia Contest! Since it’s football season, we’re alternating between UT football trivia and Tennessee history questions.  So far, you all seem to be enjoying the contest and we’re having fun with it too.  Remember, the first person writing the correct answer on our Facebook or Twitter wall gets their name entered into the monthly drawing for a FREE Dalton Collision t-shirt.  If you’re not already following us on Facebook and Twitter, please take a minute to visit each page and follow/Like.

Coming up in December, we’ll be posting information on our new weekly contest/monthly drawing.  Don’t worry, we’ll post the link on Facebook and Twitter for that article so you don’t miss it!  The new contest will have bigger prizes and more details to explain and will start in January 2012.

In the meantime, would you be surprised to hear that people are still calling us and bringing their cars by for repairs of hail and storm damages incurred back in the spring months of this year? There was so much widespread damage throughout the greater Knoxville area that many repair shops were implementing waiting lists for their customers.  Dalton Collision hasn’t turned anyone away for repair service needs!  Yes, we’ve been incredibly busy, but we have kept repairs rolling along smoothly and we choose not to implement waiting lists.  If you’re still waiting to get storm damages to your car dealt with, give us a call at 865-933-9818 and we’ll get your car taken care of.

Make the Right Decision – Choose Dalton Collision!

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On April 7, 2011, Jerry and Donna visited Grainger High on Career Awareness Day to represent Dalton Collision Inc. Dalton Collision was very honored to be invited to the event to let the kids understand what is done and Dalton’s and maybe help them seek what they want to do in their lives. The purpose of the event was to let the students look at the different career opportunities that are out in the world. It was our job to provide different types of information on how they can get started in these different fields. Also, other information that was given to the students was what kind of education you would need to do our line of work and the training that is involoved to get into this field.
Overall, it was a great time for us to be able to go and get involved with the students, and maybe help them determine a career they may want to get involved in and have a successful life. Again, we appreciate Grainger High School for letting us be apart of this special event. We was very honored to attend and help the students out in any way possible.

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4/19/2011 3:36:20 PM

CCC Information Services, Inc., has released a report written by Lead Industry Analyst Susanna Gotsch discussing the impact of the Japanese tragedy on the automotive claims market:

Industry Report: The Impact of the Japan Tragedy on the Auto Claims and Collision Repair Industry

The devastating earthquake and subsequent tsunami on March 11 destroyed huge swathes of land in northern Japan, with at least 25,600 people killed or still missing. The survivors of the impacted region are trying to cope with all they’ve lost while working to provide a baseline of civic and economic normalcy.

Among those industries significantly impacted – one critical to the country’s economic engine – is the auto industry. Many automakers experienced damage to their research and manufacturing facilities, and have seen new vehicle production slowed or even halted as numerous suppliers also received extensive damage. This dynamic is making it difficult to assess what the long-term impact will be; however, claims data analysis can potentially provide some basic framework for understanding its effect on the automotive claims and collision repair industries.

Slowdown in New Vehicle Production

The automotive industry has been left to assess damage to its own plants, as well as that of its suppliers. Rolling power outages and continued concerns over leaked radiation from the damaged nuclear plant have slowed recovery efforts. The resulting blackouts and brownouts are slowing the manufacturing of machinery, metals and chemicals used in parts production because these processes often require time to warm-up, calibrate or set properly.

Industry analysts estimate that the production of 516,000 vehicles has been lost in the month following the earthquake – 260,000 of which were Toyota vehicles.

Toyota also announced in mid-April that it would keep Japan production levels at 50 percent through early June, potentially cutting another 120,000 units out of production. Days-supply of new vehicles, which had been tight already, has fallen further – particularly among the Japanese-brand stores. Even domestic manufacturers such as GM and Ford have experienced production slowdowns with supply disruptions, all due to supplier part shortages.

A late-March survey conducted by the Original Equipment Suppliers Association found that 78 percent of respondents had identified that some portion of their product comes from Japan. More than two-thirds of those respondents had yet to see an impact on production schedules, but fully expect some output reduction in the next several months.

Japanese suppliers are key producers of electronic components such as integrated circuits, sensors and semiconductors, as well as integral powertrain components including gears, clutch packs, solenoids and specialty materials. Shortages of electronics and resin-based products have already halted or slowed new vehicle production for many manufacturers including Nissan, Honda, Suzuki, Subaru, Toyota and Fuji Heavy Industries Ltd.

Even automakers that assemble vehicles in the U.S. have seen production hampered by part shortages. And, unfortunately, many of these parts are among the most difficult to quickly swap out with another supplier. High-tech electronic circuits and components that are used in engine control units, antilock brakes, airbags and other systems are particularly hard to resource as they’re vehicle-specific and require significant redesign, retesting and recalibration if they have to be resourced elsewhere.

The following are some examples of the impact to date:

• Renesas Electronics Corp., the world’s largest manufacturer of automotive microcontrollers, experienced significant damage to one of its two auto-related factories. The microprocessors are used to control electronic components in vehicles such as electronic parking brakes, engine control units, onboard entertainment systems, stability control and power steering. The average vehicle uses anywhere from 30 to 100 microcontrollers. The company initially projected that the factory would be out of commission until July, but is racing to bring production online before that date. Renesas has an estimated 41 percent of the global microcontroller market, with 90 percent of its global capacity in Japan, and nearly 40 percent of its production capacity is estimated to have been lost according to HIS ISuppli Inc. The company plans to shift production to other plants in Japan and Singapore, but that will account for less than half of the Japan plant’s capacity.

• Merck KGaA’s factory, which produces key metallic automotive paint pigment called Xirallic, suffered significant damage. Xirallic is a key ingredient in black, gray and red-shade paint colors. This is significant, as PPG Automotive Industries research found that silver was the most popular color in 2010. Silver, gray and charcoal accounted for 31 percent of vehicle-paint choices in North America last year, black and white each accounted for 18 percent, and red came in third with 11 percent. Numerous automakers have stopped taking dealer orders for vehicles of colors that require this ingredient. Ford, GM, Chrysler, BMW and others have restricted dealer orders for vehicles of any colors that use Xirallic, helping to ensure that the supplies of the affected paint available in the market today will be conserved for current in-fleet vehicles versus in the production of new vehicles.

• Freescale Semiconductor Inc., the world’s second largest maker of automotive chips, will not re-open its wafer fabrication plant in Sendai, Japan, located near the epicenter of the earthquake. They had planned to close this factory even before the earthquake, and will now pull forward the ramp-up of the transferred manufacturing to plants in Arizona and elsewhere.

Among the outcomes for struggling suppliers could be bankruptcies and the liquidation of smaller, weaker suppliers that are unable to meet payments due to the dramatic slowdown in vehicle production. Suppliers with a lock on any one particular component may be pressed to diversify manufacturing facilities geographically, or even see their customers move portions of business to rival suppliers as a precautionary measure.

Slowdown in New Vehicle Sales?

New vehicle sales in the month of March 2011 were slightly down from the February sales rate, but still up 17 percent from the same month in 2010. The first quarter 2011 seasonally adjusted annual rate of new vehicle sales was 13.1 million units. Analysts point to improved credit and employment figures, lower interest rates and pent-up demand as the reasons for the increase.

Demand for small cars rose, with small car sales accounting for 29 percent of sales in March, up from 26 percent one year earlier. Industry research group TrueCar.com credits higher gas prices for this shift, and for potentially 500,000 fewer overall units sold in March. Spreading instability in the Middle East has caused oil and gas prices to rise more than 25 percent in the past year, with prices now reaching levels last seen in 2008. In its World Economic Outlook released earlier this April, the International Monetary Fund predicts “increased scarcity” in global oil markets and the risk of additional sharp prices increases in the coming years.

A fear of vehicle availability in the coming months is also helping lift demand and prices. For example, sales of the Toyota Prius surged 52 percent in March, as media reports projected shortages of the vehicle in coming months. Analysts are incorporating the latest data, now projecting U.S. new vehicle sales at 13 million for the year. The average net per vehicle sold in March was $300 higher than one year prior as incentives have continued to fall, and will likely follow that trend in the coming months. April sales data from CNW Marketing Research Inc. shows automakers and dealers getting the highest transaction prices since 1996, at 87 percent of MSRP. That’s a 10 percent swing from the average transaction price in 2009, when it was 23 percent under MSRP. The speed at which automakers are able to resume full production levels will also have an impact on dealers’ pricing power.

Many of the top-selling Japanese imports have seen production levels fall. According to analysis by Automotive News, of the 20 best-selling Japanese imports (accounting for nearly 1.1 million vehicle sales in 2010), at least 12 have stopped or significantly slowed production as of early April. Inventory analysis by Edmunds.com shows unseasonable drop-offs in inventory for Honda, Nissan, Toyota and Mercedes-Benz.

Will Used Sales Pick Up the Slack?

As the dealer market becomes increasingly concerned with the long-term impact on its ability to get new vehicle inventory, many are beefing up their used vehicle supply. Activity and prices at the wholesale auctions have risen dramatically over the last several weeks. Strong residual values of used vehicles also helps encourage more leasing, because deals require much less subvention on the part of the finance company, dealer or automaker.

According to ADESA, the average value of wholesale vehicle at auction was $10,543 in March 2011, up 5.1 percent from February, but flat versus the prior year. ADESA’s Tom Kontos attributes the crisis in Japan and the rise in fuel costs as the two key factors increasing used vehicle prices quicker than anticipated at the close of 2010. And gas prices have also helped drive up demand of used small cars, whose supply has fallen to less than 40 days of supply, versus 80 days of supply just a year ago. Even values of light trucks have held up well, despite the $4 per gallon spike in gasoline. Again, this is largely due to significantly lower levels of these vehicles: The supply of used large SUVs is down 35 percent, and used large pickups are down 22 percent from 2008.

Impact on Automotive Claims Industry

The potential outcome of the earthquake to the automotive insurance and collision repair industries includes a) the inability to get certain replacement parts; b) longer fulfillment time of certain replacement parts driving up claim and repair cycle times; and c) higher vehicle values driving up total loss costs.

Automakers are scrambling to identify at-risk components and looking for alternative suppliers or manufacturing locales for affected parts when necessary. Everyone is closely watching inventory levels of these at-risk parts, and in some cases slowing new vehicle production to conserve these parts.

Toyota released a list of “Japan Limited Supply Parts” to its dealers soon after the earthquake, letting them know that they would not be filling any orders of these short-inventory parts to replenish dealer stock. Of the nearly 250 parts included on that list, approximately 90 of them were shock absorbers, along with numerous stereo and electronic components; vehicles that Toyota manufactured in Japan – such as the Yaris, Lexus LS 400, SC 300 and IS 300 models are most likely to contain those parts. These vehicles accounted for less than 0.5 percent of the overall appraised vehicle volume for first quarter 2011.

Honda has suspended all U.S. orders for Japan-built models such as the Fit, Insight, CR-Z, Civic Hybrid, Acura TSX, Acura RL and a small number of CR-Vs. Some of these vehicles might also potentially be at risk of uninterrupted collision part fulfillment, but these vehicles make up a very small portion of the overall appraised vehicle volume for first quarter 2011 (0.5 percent).

An analysis of “parts ordered to received average days” shows no significant change since mid-March for any of the different vehicle makes. Low volumes of those parts that automakers identified as already having limited supply also makes it difficult to assess whether there has been any impact to date. We will continue to monitor this closely to assess the impact to the industry.

Perhaps the most immediate impact the industry can expect is higher market values for vehicles, which is driving up total loss costs. The average total loss values had been experiencing steady month-over-month increases since late 2009, and the month-to-date increase this month has ramped up further. The vehicles most impacted are the ones that are affected by higher fuel prices and the slowdown in new-vehicle production. These include compact cars, small pickups and mid-luxury SUVs.

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Jake Weyer
March 4, 2011 — Erie Insurance, an annual donor to the Collision Repair Education Foundation, recently donated $5,000 to the organization’s Collision Repair Education Campaign fund.

The fund allows the foundation to offer its student scholarships, school grants and the $50,000 Ultimate Collision Education Makeover grant.

“Erie Insurance is proud to be a long time supporter of both the Collision Repair Education Foundation and I-CAR,” said Jim Brown, the company’s vice president of material damage claims. “The foundation’s work helps provide a brighter future for the industry as a whole, and for individual students entering the vehicle repair trades.”

Erie Insurance offers auto, home, business and life insurance in 11 states and the District of Columbia

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March 4, 2011 — Sales of Chevrolet’s Volt were down 40 units in February compared to January sales, according to the company’s monthly sales report.

GM sold 321 of the new plug-in hybrid electric vehicles in January and 281 in February. The numbers were released shortly after GM announced plans to make the Volt available nationwide by the end of the year.

At the end of January, the car had been delivered to customers in the Washington, D.C. area, California, New York, Connecticut, New Jersey and Texas. Deliveries to Michigan are planned this spring and the car is supposed to be available nationwide during the second quarter of the year, with deliveries starting on the east coast.

Overall, Chevrolet reported a February sales climb of 69 percent in February when compared to the same month last year. Nearly half of the month’s 142,919 vehicles sold were four-cylinder models. The largest gains were made in Cruze, Equinox, Traverse and Silverado sales.

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In order to develop profitable relationships with your customers, you need to be an expert in dealing with their different personalities.

By Jeanne Silver
12/3/2010

More shops are competing for fewer customers in today’s auto body repair environment. Now more than ever, it’s important to recognize that interaction with your customer is not about writing estimates, it’s about closing sales.

Closing sales is based on developing relationships, and in order to develop relationships, you have to be an expert at dealing with many different personalities. Understanding those personalities is the key to developing strong relationships with buyers. And remember this: not every customer must be sold at the ultimate price of losing your sanity and profit. It’s sometimes okay to fire the customer.

Traditional Model

The traditional model of a shop’s front office is to have a customer service representative greet the customer and then hand him or her off to an estimator. But what if we looked at all of our front-office people as salespeople equally trained to “develop a relationship” with the prospective buyer. After all, estimating skills aren’t as important in the front as they are in the back. Newer lean processes suggest that the vehicle be taken in, disassembled and a complete repair plan be written.

Reception-area staff should be trained to be “front-office ambassadors.” They should meet, greet and develop relationships with prospective buyers. These employees should have some natural selling skills, but ongoing sales training is important.

It might be challenging for an estimator to greet customers, write estimates and close sales, especially if he or she is more comfortable with a piece of paper than a human being.

Emphasize sales in the front, and move the repair planning to the back. Make the attempt to sell the job and plan the repair before handing the final details over to the customer. Ask the prospective customer for permission to e-mail him or her a complete repair plan after disassembly. Most customers will agree that’s a good idea, and it starts the relationship off honestly.

Our industry is conditioned to write estimates, add supplements and then hand the vehicle owner a final bill that looks nothing like the original estimate. That’s starting the relationship with your customers on a lie. It’s no wonder that auto repair and maintenance is the fifth least trusted industry, according to the Better Business Bureau. That’s better than some others, but it belies an ugly truth: Our relationships with our customers may be founded on misconception and mistrust.

You’ve Got Personality

Every day, your staff will come in contact with different personalities, and recognizing how to read and respond to those personalities will help you to either make the sale or watch the customer walk away. One of my former production managers, Bill, once said, “You don’t lose money on work you don’t do.” It’s okay to fire the customer if he or she is going to cost your business profit and try the staff’s patience. Good sales are the goal, and not every sale is worth chasing.

So let’s look at some of these customer personalities and talk about some strategies on how to deal with them:

“The Shopper.” Recently, an over-friendly Angela walked into the shop to request an estimate. Fortunately, I sit close enough to listen to the intake interview and screening of the prospective customer, and I heard the words “old truck” and “someone else is paying for it.” I rose to greet her and said, “Let’s take a look,” which is the normal response here. You should visually inspect the vehicle first to see whether or not it’s repairable and assess the vehicle owner’s intentions.

The truck was a “rolling total.” It was obvious that it could not be repaired, and that Angela was looking to cash out at the highest price. I asked if she had gotten any other estimates, and she replied that she had two, which I then asked
to see.

“No, I want you to write an estimate,” Angela said.

I refused, and she exploded, screaming that was the worst customer service she ever had (remember she wasn’t a customer, nor would she ever be). She couldn’t understand why we wouldn’t write an estimate. To her, it meant we didn’t want her business.

“We write estimates on vehicles we repair,” I replied.

Remember, you’re in business to repair vehicles, not to be an estimating service. If you take a look at the cost of writing an estimate by placing a modest value on your expertise and overhead, it costs about $35. Perhaps the most important takeaway here is: Put that expertise to work on improving your business, and don’t waste it on customers who will never repair their vehicles or who you don’t necessarily want to do business with.
“Easy Peasy Lemon Squeezy.” We wish all of our customers could be this easy. They enter your business ready to hand over the keys. They’re previous customers who are loyal or individuals who have been referred by other good customers. They want a quality repair in a reasonable amount of time, and they already trust you to provide the service. They’re the customers for whom you couldn’t provide a good estimate because of driveability or hidden damages. They’re in a hurry, and you convince them that you can be trusted to do an honest, high quality repair. You may know these people well, or this may be your first meeting and you need to develop a relationship.

George would never have his vehicle repaired anywhere else. His insurance company wanted him to take his car to its direct repair shop for an estimate (and hopefully a repair), and he did so reluctantly, grumbling about it afterward. He was also very up-front with his insurer, saying he would ultimately have his vehicle repaired at the shop of his choice.

George left with an estimate (remember how much that estimate costs) and then drove to our shop for the repair. We were able to schedule it and put him in a rental vehicle a couple days later.

George is a walking testimonial, and he’s an educated consumer. He knows that he can have his vehicle repaired at the shop of his choice, and he got that education from us.

“Respect My Lifestyle.” Customers come from different backgrounds, cultures and walks of life. Learn to recognize the traits that make your customers unique and you can build strong relationships.

I interviewed a female customer once and asked her if she had ever had a bad repair experience. By the way, 99 percent of women have a story to tell about a bad repair experience, and they comprise 81 percent of your total customer base. So treat women seriously and with respect, especially since the majority of your clientele is female. They’re the decision-makers.

Mary had been referred to another shop for a previous repair. When she entered the other shop, she said the atmosphere was dark and unwelcoming. There was a black leather couch, black floor and dark walls, and the reception area was quite a distance away from the entryway. She said the estimator was wearing a black silk shirt and lots of gold chains.

“I didn’t know whether he wanted to look at my car or ask me out on a date,” she said.

She was very uncomfortable with the experience, and said the focus was never on the repair of her vehicle, only on her and her female friend. The good news is that now, Mary is our customer for life. The bad news is that she tells everyone she knows about her bad experience with the other shop.

“The Cheat.” Every shop’s door gets darkened at some point by this customer, and the result is often a painful and costly experience that teaches the shop the right way to handle this person in the future.

“The Cheat” can cost you money, customer satisfaction and your patience. One of the best ways to avoid the pain associated with this kind of customer is to have a good pre-repair inspection process. Put a procedure in place where a vehicle, including a towed-in one, can’t go into production unless there’s a signed and dated pre-repair inspection by the customer and your designated shop inspector.

All prior damage needs to be photographed and clearly noted on the pre-repair inspection. Failure to follow this procedure can be costly, and many shops have learned that lesson the hard way. Due diligence in completing the pre-repair inspection will save your business lost profits – and keep a crazed customer out of your sales area!

Olivia had some minor damage to the right side of her rear bumper that was repairable, but also had some prior damage on the left side that wasn’t part of the repair. The third party was a former customer who had paid Olivia for the repair.

When Olivia came to pick up her car, she complained that the bumper should’ve been replaced and became extremely disruptive in the customer waiting area. Her original paperwork called for repair, and her final paperwork exactly matched the original. She became hysterical, calling everyone liars and cheats to the point where we threatened to have the police remove her.

Reluctantly, she wrote the check, took her keys and left the premises. I questioned her behavior and was informed that Olivia wanted the bumper replaced because of the unrelated damage on the other side.

When Olivia phoned back to continue her rant, we had the estimator calmly call her out on her behavior.

“You wanted the other person to pay for damage he didn’t cause, so maybe you’re the one who’s being dishonest,” the estimator told Olivia.
The signed pre-repair inspection saved us, and there was no longer any room for discussion. She hung up, and we never heard from her again.

Educate Your Customers

When you return the repaired vehicle to its owner, prepare him or her for his or her next crash. Hold on, did you hear that right? I hope you did. Tell your customers that, in the unlikely event of another crash, they need to be prepared to contact you as well as their insurers. They also need to be prepared to inform everyone of their choice of repairer. Give them a promotional item with your imprinted phone number that they can keep in their glove boxes, and ask them to call you in the event of another crash. After telling our customers that they have the right to choose the repair facility of their choice, many profess they didn’t know that. And that’s because you failed to educate them the first time.

Resell at Delivery

Walk the walk, don’t just talk the talk. Designate one person to be responsible for a final quality control check, and then resell the job to the car owner at delivery. Tell them that you checked the doors, reset the clock, radio and climate control, tested lights and mirrors and made sure the repair and color match were perfect. A beautiful repair can easily be used to sell another. That shows confidence in your team and the quality they produce – and that’s a powerful sales closer.

It’s your business, and you can choose your customers. Those customers who are happy with their repairs and repair experiences will become advocates for your business and, in the process, become your complimentary sales force. Those who walk away unhappy can be turned around if you put in the effort, and those who will never be happy should be encouraged to shop elsewhere.

Recognize customer personalities and learn how to handle each one so that the relationships you develop with your good customers become a permanent and reliable resource for building your business.

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1/7/2011

Gary Ledoux, known to many in the collision repair industry as the assistant national manager for American Honda’s Wholesale Parts Marketing department, has announced that he has begun to write a book on the history of collision repair in America.
“This is something that has not been done before.” says Ledoux. “Many people have labored long and hard to make the auto collision repair business the professional and vibrant industry it is today – but few know them. Many milestones were passed, and many innovations made, but few recognized them. With the help of my industry friends and associates, that will soon be changed.”

Ledoux expects the project to take two years to complete. He’s seeking historical information from all sectors of the collision repair industry, including paint and equipment suppliers, and people with knowledge of early repair and estimating technology, insurance DRP development and industry media development.

The book is also expected to cover related areas such as auto safety and collision avoidance systems and devices as well as civil engineering and traffic control.

“I’m also looking for the oldest continuously operated body shop in America,” says Ledoux. “Whoever that is certainly deserves a special profile in this book.”

To facilitate communication and the collection of data, Ledoux has developed a dedicated website (www.collisionrepairhistory.com) and a dedicated e-mail address (collisionrepairhistory@yahoo.com).

Ledoux, who considers writing a hobby, has produced four books about American history and, for the past seven years, has produced a column called Yesterwest seen in two different history magazines. He’s a former contributing editor for Power Equipment Trade and Motorcycle Industry.

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1/10/2011

A bill introduced in the New York assembly would add provisions to the state’s insurance code regarding insurer’s interests in motor vehicle repair shops.

A.B. 960, introduced by Assemblymember RoAnn M. Destito (D), would “provide that an insurer may not hold nor acquire interest in a motor vehicle repair shop.”

For insurers that already hold interests in repair shops, it would require that they “disclose to each insured that the insured has the right to use any motor vehicle repair shop selected by the insured.”

The bill has been referred to the Assembly’s transportation committee for review.

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1/11/2011

The Federal Trade Commission (FTC) has released an FTC Consumer Alert, “Auto Warranties, Routine Maintenance and Repairs: Is Using the Dealer a Must?” after a position statement from Honda sparked opposition from the Automotive Aftermarket Industry Association (AAIA), Automotive Oil Change Association (AOCA) and the Tire Industry Association (TIA), along with the Automotive Recyclers Assocition (ARA).

In late August, AAIA, AOCA and TIA sent a letter to the FTC charging that Honda had issued a release that they believed could give car owners the impression that their warranty rights would be jeopardized if they used aftermarket parts. The Automotive Recyclers Association (ARA) announced on Oct. 21 that it filed a formal complaint with the(FTC) against Hyundai Motor America and American Honda over the carmakers’ comments regarding the use of recycled auto parts.

In Hyundai’s statement last August, the automaker said that using “aftermarket, imitation or recycled collision repair parts” could compromise a vehicle’s performance in a crash.

Honda went farther in its statement, saying that its new vehicle warranty and replacement parts warranty “doesn’t apply to any part which is not purchased from an authorized U.S. Honda dealer.” The Aug. 20, 2010 Honda release also stated that “only by purchasing Honda Genuine parts through an authorized U.S. Honda dealer can you be assured of the replacement part’s authenticity, reliability and compatibility.”

In their Aug. 25 letter to the FTC, the AAIA charged that the Honda statement was “in direct conflict with the Magnuson-Moss statute,” which prohibits the conditioning of a warranty on the use of the manufacturer’s brand products.

“We are pleased that the FTC has put out valuable guidance to U.S. car owners regarding their rights under their new car warranties,” said AAIA President and CEO Kathleen Schmatz. “Vehicle manufacturers like Honda continue to put out misleading information that confuses car owners as to their ability to choose where and with what parts their vehicle is serviced and still protect their new vehicle warranty.”

The FTC Alert notes that the Magnuson-Moss Warranty Act makes it illegal for manufacturers or dealers to claim that a consumer’s warranty is void or to deny warranty coverage because someone other than the dealer provided service. The FTC release states that an independent technician, a retail chain shop or the car owner can do routine maintenance and repairs on their vehicle without jeopardizing their new car warranty.

AAIA also claimed that statements made in the Honda release regarding the quality of non-Honda parts were misleading to consumers.

“In fact, thousands of replacement parts produced by companies other than Honda are available and sold for Honda vehicles. In the vast majority of cases, the reality that these parts are installed and used without any related vehicle issues points to the clear fact that the quality of aftermarket parts are known and preferred by many U.S. consumers,” the AAIA letter states.

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“An insurance fraud and theft ring operating out of a Philadelphia body shop was broken up recently by the Pennsylvania State Police Bureau of Criminal Investigation Organized Crime Eastern Task Force Unit.

Attorney General Tom Corbett said the investigation, which began in November 2008, focused on Phillip “Phil” Sessa, of Ventnor, N.J., the owner and operator of Philly Collision.

Evidence and testimony regarding the alleged illegal activity was presented to a statewide investigating grand jury, which recommended that criminal charges be filed.

According to the grand jury, Sessa and at least 12 other suspects vandalized or damaged vehicles that were parked on public streets or at Philly Collision and then submitted fraudulent claims to insurance companies in order to receive payment for the repairs.

The grand jury found that Sessa also utilized two other schemes to obtain money from insurance companies, including staging fraudulent accidents and having individuals voluntarily surrender vehicles at his shop and then report the vehicles as stolen to the insurance companies.

Agents estimate that the organization is responsible for filing and staging at least 22 claims worth more than $300,000 in theft and attempted thefts.

The Atlantic County Prosecutor’s Office and the National Insurance Crime Bureau (NICB) assisted with the investigation.”

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