September 27, 2002

Consumers prefer factory-authorized parts for collision repair – J.D. Power and Associates

Westlake Village, California – Consumers who have had collision repair work
completed on their vehicles overwhelmingly prefer the use of factory-authorized parts by the body shop, according to the J.D. Power and Associates 2002 Collision Repair Customer Satisfaction Index Study released today.

The new study, which analyzes customer satisfaction with both insurance
companies and body shops during the collision repair process, finds that
while 81 percent of customers prefer factory-authorized parts for repairs,
only 61 percent believe they actually received them. This issue has an
important influence on how satisfied customers are with their body shop and
insurance company.

“When customers expect factory parts and believe they receive something
else, such as after-market, remanufactured or salvage parts, they are far
less likely to say that they would use that body shop again or renew their
insurance policy with that company,” said Joe Ivers, partner at J.D. Power
and Associates. “With the power of the purse, insurance providers are seen
as being in a position to enforce high work standards, both in the quality
of the work performed and in the parts used.”

Among consumers who expect to receive factory-authorized parts but believe
they received aftermarket parts instead, only 39 percent indicate they
“definitely would” renew their insurance policy with the same company, and
only 13 percent “definitely would” use the same body shop again. When
consumers expect factory parts and believe they received them, 62 percent
would renew their insurance with the same carrier and 57 percent would use
the same body shop again.

The extent to which customers of insurance companies believe they received
factory parts varies widely. More than 80 percent of GEICO and Erie
Insurance customers believe factory parts were used in their repairs, far
outpacing the industry average of 61 percent.

While the relationship between insurance providers and body shop owners at
times reflects conflicting interests in cost reduction and the coverage of
parts, the study finds that a body shop’s performance during a collision
repair claim can also affect customer satisfaction with the insurance

“A collision claim event tends to be the moment of truth for insurance
companies,” said Ivers. “For better or for worse, body shops play an
important role in that. This should provide strong inducement for insurance
carriers to intervene where they can to eliminate barriers to satisfaction
during the repair experience at the body shop.”

Because of this, many insurance companies have created networks of body
shops to which they refer large volumes of business. But results are mixed
when it comes to customer satisfaction. Overall, 53 percent of customers
who choose their own body shop report their collision repair experience as
“outstanding,” while only 42 percent of those following an insurance company
referral report their experience as “outstanding.” Some insurance
companies, however, give referrals that lead to higher customer

Among dealer body shops, Chrysler Group dealers (including Dodge and Jeep)
received the highest marks in customer satisfaction.

The study is based on more than 8,500 vehicle owners who had a collision
repair experience in the past year. Customer responses were drawn from a
cross-section of collision repair customers.

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