New Jersey Automotive October 2020 by Thomas Greco Publishing, Inc.

OCTOBER 2020 $5.95

THE OFFICIAL PUBLICATION OF THE ALLIANCE OF AUTOMOTIVE SERVICE PROVIDERS/NEW JERSEY (WWW.AASPNJ.ORG) AND THE AUTOMOTIVE RECYCLERS ASSOCIATION OF NEW JERSEY (www.ARANJ.org)

Clearing the

FOG: Getting to the TRUTH behind

“OPT OE” PARTS ®

2020

RECAP

Q Ending Insurer Abuse Q AASP/NJ Meets with Legislators

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P.O. Box 734 Neptune, NJ 07753 EXECUTIVE DIRECTOR Charles Bryant 732-922-8909 / setlit4u@msn.com 2019 - 2021 OFFICERS PRESIDENT Jerry McNee, Ultimate Collision Repair, Inc. 732-494-1900 / ultimatecollision@att.net

CONTENTS

VOLUME 50 NUMBER 10 | October 2020

COVER STORY

COLLISION CHAIRMAN Dennis Cataldo, Jr., D&M Auto Body 732-251-4313 / jr@dnmautobody.com

MECHANICAL CHAIRMAN Keith Krehel, Krehel Automotive Repair, Inc. 973-546-2828 / krehelauto@aol.com TREASURER Tom Elder, Compact Kars, Inc. 609-259-6373 / compactkars@aol.com SECRETARY Thomas Greco, Thomas Greco Publishing, Inc. 973-667-6922 / thomas@grecopublishing.com BOARD Gary Gardella, Jr., County Line Auto Body 732-363-5904 / countylineautobody@gmail.com Dave Laganella, Peters Body and Fender 201-337-1200 / petersbandf@gmail.com Sam Mikhail, Prestige Auto Body 908-294-1985 /prestige@goldcar.us Ted Rainer, Ocean Bay Auto Body 732-899-7900 / ted@oceanbayautobody.com Anthony Trama, Bloomfield Auto Body 973-748-2608 / anthony@bloomfieldautobody.com BOARD ALLIED Joe Amato, The Amato Agency 732-530-6740 / joesr@amatoagency.com Mike Kaufmann, Advantage Dealer Services 973-332-7014 / mkaufmann@advantageds.com PAST PRESIDENT ATTENDING Jeff McDowell, Leslie’s Auto Body 732-738-1948 / chacki@aol.com

PUBLISHER Thomas Greco / thomas@grecopublishing.com SALES DIRECTOR Alicia Figurelli / alicia@grecopublishing.com GRAPHIC DESIGNER Lisa M. Cuthbert/ lisa@grecopublishing.com EDITORIAL DIRECTOR Joel Gausten / joel@grecopublishing.com EDITORIAL/CREATIVE COORDINATOR Alana Bonillo / alana@grecopublishing.com OFFICE MANAGER Donna Greco / donna@grecopublishing.com CONTRIBUTING EDITORS Charles Bryant • Mario DeFilippis • Jeff McDowell • Mitch Portnoi • Ron Ananian Keith Krehel • Jerry McNee • Bob Dirkes • Jacquelyn Bauman

Published by: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963

www.grecopublishing.com NEW JERSEY AUTOMOTIVE is published monthly and is sent to AASP/NJ and ARANJ members free of charge. Subscriptions are $24 per year. NEW JERSEY AUTOMOTIVE is published by Thomas Greco Publishing Inc., 244 Chestnut St., Nutley, NJ 07110. The editorial contents of NEW JERSEY AUTOMOTIVE are copyright © 2020 by Thomas Greco Publishing Inc. and may not be reproduced in any manner, either in whole or in part, without written permission from the publisher and/or editor. Articles in this publication do not necessarily reflect the opinions of Thomas Greco Publishing Inc. Stock Images courtesy of www.istockphoto.com.

Getting to the Truth behind "Opt OE" Parts by

10 14

OUT OF BODY AND (MECHANICAL) EXPERIENCES PRESIDENT’S MESSAGE

EXECUTIVE DIRECTOR’S MESSAGE

46 NJA ADVERTISERS’ INDEX

LOCAL NEWS 22

AASP/NJ Meets with Legislators and Insurance Reps on Claim Settlement Issues

NATIONAL NEWS 24 28

SCRS and CIC Announce November Virtual Events

Industry Legend Toby Chess Seeks Kidney Transplant

AASP/NJ FEATURE 30

NORTHEAST® 2020: A Virtual Victory by

COLLISION P.R.E.P. NEWS 31

WMABA Collision P.R.E.P. Explores Shop Sustainability

AUTOMOTIVE RECYCLERS ASSOCIATION OF NEW JERSEY 42 Wharton Insurance Briefs by Mario DeFilippis

Joe Amato, Sr. Ron Ananian Jim Bowers Charles Bryant Don Chard Guy Citro Pete Cook Ed Day Dave Demarest Phil Dolcemascolo Tom Elder Bob Everett

Thomas Greco Dan Hawtin Rich Johnson Wes Kearney Nick Kostakis Jim Kowalak Keith Krehel Joe Lubrano Michael Lovullo Jeff McDowell Sam Mikhail Ron Mucklow

George Petrask Russ Robson Jerry Russomano George Threlfall Cynthia Tursi Lee Vetland Paul Vigilant Rich Weber Brian Vesley Glenn Villacari Stan Wilson

New Jersey Automotive | October 2020 | 7

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OUT OF BODY (AND MECHANICAL) EXPERIENCES by THOMAS GRECO, PUBLISHER

ELECTED!

By the time you read this, we will be a few days away from (what is obviously) the most divisive presidential election of my lifetime. No matter who wins, there will be a large amount of very, very unhappy people. And that’s a shame. It’s sad to know that there really is no one out there (that I can see anyway) who can bring our deeply divided country together. It seems that no one is interested in the greater good anymore. How can we find representatives to work toward the greater good when we can’t even agree on what the greater good is? End of sermon. Allow me to take you on a (hopefully) Page 1 humorous journey through the presidential elections of my lifetime.

I think as we grow, we can’t help but have our parents’ political views instilled in us. I never really knew my dad’s views for the first few years of my life, and he never talked about it. (I have no idea if my mom was apolitical or if she just never wanted to tell my dad who she voted for. LOL!) I don’t know if he voted for Eisenhower or Kennedy or LBJ; he never mentioned it. He definitely liked Nixon because of all those “hippie bastards protesting in the streets.” But that changed when my “Golden Child” brother became eligible for the Vietnam draft. Then, signs went up in our yard supporting anti-war Democrat Eugene McCarthy, but I had no clue what was going on. Does anyone really care about that crap during your teens? Sports, music, hot dogs, hamburgers, pizza and girls was all I was interested

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in. (I know what you’re thinking. That’s ALL I’ve EVER been interested in!) Once my brother was exempt from the draft (thanks, Doc!), my dad returned to Tricky Dick’s fan club. I’m pretty sure he was ambivalent about Gerald Ford, but he did not like Jimmy Carter. (Who did?) By this time, I was of voting age. Following the footsteps of my dad, I voted for Ronald Reagan. My dad loved Reagan, but I lost all respect for him after John Lennon was shot. Of course, after that event and being 20 years old, I wanted all guns banned. When Reagan was asked about Lennon, he said he did not believe that Lennon’s death contributed to the argument for gun control. What is that saying from It’s A Wonderful Life? “Youth is wasted on the young”? By the time 1984 rolled around, I was a little more evolved and educated, and I voted for Ronnie again. Why? It’s simple. I liked him. Throughout my life, whether it’s a dumb reason or not, I refused to vote for a candidate I didn’t like on on any level. Four years later, my criteria was challenged. I mean, George H.W. Bush was okay, but he

was an empty suit. The fact that he ran against someone more unlikable, Michael Dukakis, showed you just how weak a candidate Dukakis was. (This is something the Democrats obviously forgot in 2016.) And then there was Bill Clinton. I loved Bill Clinton. At first. He was young. He was cool. He liked sports, music, hot dogs, hamburgers, pizza and girls. I went as far as offering to work on his campaign...until he picked Al Gore as his running mate. At the time, Gore’s wife, Tipper, was leading a campaign to get warning labels on records. To me, that was too much of an offense to overcome. As much as I liked Clinton, I felt his judgement was lacking (if we only knew!) in picking his VP. So, I voted for Bush. By the time of the next election, I was a husband, a dad and a small business owner. It’s funny how perspective changes as you get older. Clinton’s opponent, Bob Dole, was certainly likable, but he was old. Like real old. I liked Clinton, but I still could not get past Gore. Or Hillary, for that matter. I voted for Dole.

Continued on page 23

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PRESIDENT’S MESSAGE by JERRY MCNEE

Watch Your Parts Closely

This month’s cover story takes a look at the rise of “Opt OE” parts in our industry. There’s no doubt you’re seeing this term pop up more and more these days. If you’ve been wondering what it actually means, you’re not alone – and you might be paying a very steep price for not knowing. As you’ll read in the cover story, there is currently no industry-wide consensus on what a slew of increasingly common part terms – such as “Opt OE,” “Surplus OE” and “Alt OE” – should mean and how they should be applied out in the field. The problem is that there are still no clear definitions for these parts. If you ask five different part suppliers what these terms mean to them, you’re likely to get five different answers. Just because one of these mysteriously named parts shows up on an estimating system doesn’t mean there’s an across-the-board definition for it. In some instances, using a so-called “Opt OE” part

could be dangerous. For example, Toyota has stated via an online notice (toyotapartsandservice.com/collision/ dont-opt-for-opt-oe-parts) that it does not have an “Opt OE” or “surplus” program. The notice further states that “[a]ny parts marketed as such are not part of a Toyota program and are not sanctioned by Toyota for use in vehicles sold in North America. Even though parts classified as ‘Opt OE’ might appear in various estimating systems or parts-ordering documentation, collision centers should be aware that they are not considered to be legitimate by Toyota.” Pay special attention to Toyota’s above statement in regard to North America. An “Opt OE” part could have been made overseas for a foreign market and then rerouted here for sale. However, that part could have been made to standards weaker than or drastically different from those in the US. These grey market items pose a

Continued on page 28

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End Insurer Abuse before It’s Too Late! EXECUTIVE DIRECTOR’S MESSAGE by CHARLES BRYANT

Since the time the Unfair Claim Settlement Practices Act was first written, insurers have looked at this regulation as a joke rather than as a set of rules that must be followed. Yes, I will be the first to admit that anyone unfamiliar with how claims are supposed to be handled, settled and closed would likely get a warm and fuzzy feeling thinking that these rules cover everything from start to finish and any consumer who has a claim is well protected as a result. In reality, all these regulations do is give consumers a false sense of security that they will be treated fairly and properly when a claim is reported. The fact is, these rules and regulations are a joke and are basically ignored during the claim settlement process. Please allow me to explain. I will start with following: 11:2-17.1 Purpose N.J.S.A. 17:29B-4(9) and 17B:30-13.1 prohibit insurers from engaging in unfair claims settlement practices. The purpose of this subchapter is to promote the fair and equitable treatment of claimants by defining certain minimum standards for the settlement of claims which, if violated with such frequency as to indicate a general business practice, would constitute unfair claims settlement practices in the business of insurance. [Emphasis added.]

The first part, where it states that the rules are there to “prohibit insurers from engaging in unfair claims settlement practices,” sounds good. So does the second part, where it states that the purpose of the regulation is to “promote the fair and equitable treatment of claimants by defining certain minimum standards for the settlement of claims.” That’s right to the point and certainly explains what I mean when I say the regulations would likely give someone a warm and fuzzy feeling that these rules cover everything. However, the next part says, “if violated with such frequency as to indicate a general business practice, would constitute unfair claims settlement practices in the business of insurance.” Now, wait a minute. That’s like saying police officers who are supposed to enforce the rules can’t give a person running the red light a ticket unless they catch that person doing so at least three or four times within a week or enough times to create a general practice. A one-time violation isn’t enough. Well,

16 | New Jersey Automotive | October 2020

the reality is that the average consumer only has an accident where they need to put a claim to an insurer every now and then, so there is no way that they are going to be able to show that an insurer has violated the regulations enough to create a general business practice. Therefore, the regulations supposedly governing fair claim settlement practices are basically a joke. Period! Now, let’s get into the process a little further. Another section of the regulations states that “every insurer shall distribute copies of this subchapter to every person directly responsible for the handling and settlement of claims.” The regulation goes even further by stating, “Every insurer shall satisfy itself that all such responsible persons are thoroughly conversant with and are complying with this subchapter.” [Emphasis added.] Now, this is where these so-called rules or regulations really start to get under my skin. I can’t even begin to tell you how many times I have spoken to a rep handling a problematic claim where I mentioned that they are not following the provisions of the Unfair Claim Settlement Practices Act and they respond, “What is that?” One would naturally think that such a claim rep would be in serious trouble for not following the rules, let alone not even being aware that the regulations exist. Wrong again. The reality is that it doesn’t matter. Once again, let me explain. It is likely that the claim rep is actually following the rules they have been told to follow. The problem is those rules are not the ones referenced in the Unfair Claim Settlement Practices Act. They are likely rules that the company has made up and instructed its claims people to follow. Now, one would think that when someone has proof that an insurer is blatantly violating the provisions of the regulations, they can simply go to an attorney and file suit to get the matter resolved. Wrong again! The only thing that a claimant can do when an insurer has violated the regulations during the settlement of a claim is make a complaint to the NJ Department of Banking and Insurance. However, remember the part of the regulations that I mentioned earlier: A violation of the regulations is only considered a valid violation “if violated with such frequency as to indicate a general business practice, would constitute unfair claims settlement practices in the business of insurance.” It certainly sounds like the NJ Department of Banking and Insurance can’t do anything about the violation unless one can show that the insurer

has violated this part of the regulations enough to create a general business practice. Letâ&#x20AC;&#x2122;s cut to the chase. These regulations are designed to allow insurers to get away with handling claims any way they feel without facing any serious consequences for their improper actions. Sure, the NJ Department of Banking and Insurance can fine an insurer once it determines that the insurer has violated the regulations enough to create a general business practice, but you can bet that insurers budget for the fines that they are likely to face. Until recently, when insurers refused to pay for certain operations or procedures that collision shops have been requesting, the shops would often just refuse to perform them or go ahead and perform them without compensation. But now, with todayâ&#x20AC;&#x2122;s vehicles (which are basically rolling computers), the manufacturer repair procedures and operations must be followed and performed â&#x20AC;&#x201C; or people are going to die! Collision shops that take the position of not performing the repairs as per the vehicle manufacturer guidelines because an insurer refuses to pay for them can face serious consequences if it leads to the injury or the death of a passenger when the vehicle gets back on the road. The excuse that an insurer

refused to pay for the operation does not relieve a shop from the liability associated with an improper repair. For years, insurers have played Letâ&#x20AC;&#x2122;s Make a Deal with collision shops when it comes to negotiating the cost of repairs in terms of what they will or will not pay for. In reality, that is not part of the deal the insurers made The cost of repairs is when they insured the what it is, and insurersâ&#x20AC;&#x2122; consumerâ&#x20AC;&#x2122;s vehicle. The refusal to pay for the deal was to pay what is necessary to put the correct repairs can vehicle back to precause the death of accident condition. vehicle occupants. Todayâ&#x20AC;&#x2122;s vehicles must be scanned to determine what is damaged after a collision, and many components must be recalibrated after that accident. Otherwise, when things like steering angle sensors are not recalibrated or replaced when necessary, the vehicle might have a mind of its own and turn head-on into oncoming traffic while the driver steers in another direction. The bottom line is the game is over. The cost of repairs is what it is, and insurersâ&#x20AC;&#x2122;

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Genuine Volkswagen Collision Parts Are a Call or a Click Away. The best repairs start with the best shop-supplier relationship. Contact the following Authorized Volkswagen dealers by phone, fax or email to get the parts you need, when you need them. Flemington Volkswagen 213 Route 202/31 Flemington, NJ 08822 TOLL FREE: 877-657-2787 FAX: 908-782-1795 rmuir@flemington.com www.NJPARTS.com

Paul Miller VW of Bernardsville 118 Morristown ROAd Bernardsville, NJ 07924 Toll Free: 877-318-6557 Local: 908-766-1600 Fax: 908-766-6171

Douglas Motors 491 MORRIS AVE. SUMMIT, NJ 07901 PHONE: 908-277-1100 FAX: 908-273-6196 TOLL FREE: 800-672-1172 www.douglasvw.com email: douglasparts@douglasautonet.com

Trend Motors 221 Route 46 West Rockaway, NJ 07866 888-267-2821 fax: 973-625-4985 www.trendmotors.com email:dreinacher@trendmotors.com

Crestmont Volkswagen 730 ROUTE 23 NORTH POMPTON PLAINS, NJ 07444 TOLL FREE: 800-839-6444 fax: 973-839-8146 www.crestmontvw.com email:vwparts@crestmont23.com

20 | New Jersey Automotive | October 2020

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Helping you do business is our business. Order Audi Genuine Parts from these select dealers. Flemington Audi 213 Route 202/31 Flemington, NJ 08822 Toll Free: 877.657.2787 Fax: 908.782.1795 email: rmuir@flemington.com www.NJPARTS.com

DCH Millburn Audi 2211 Millburn Ave Maplewood, NJ 07040 Toll Free: 800.553.9250 Direct: 973.762.0262 Fax: 973.762.2381 www.dchmillburnaudi.com

Paul Miller Audi 179 Route 46 East Parsippany, NJ 07054 Toll Free: 800.35.MILLER Parts Direct: 973.575.7793 Fax: 973.575.5911 www.paulmiller.com

Bell Audi 782 Route 1 Edison, NJ 08817 732.396.9360 Fax: 732.396.9090 www.bellaudi.com

Audi Brooklyn 211 63rd Street Brooklyn, NY 11220 Phone: 718.492.6400 Fax: 718.492.8899 rmerchant@audibrooklyn.com www.audibrooklyn.com

Town Motors Audi 400 South Dean Street Englewood, NJ 07631 201.227.6506/6536 Fax: 201.541.0314 www.townmotors.com

Jack Daniels Audi of Upper Saddle River 243 Route 17 Upper Saddle River, NJ 07458 201.252.1500 Fax: 201.254.1552 tbabcock@jackdanielsmotors.com www.jackdanielsmotors.com

Audi Bridgewater 701 Route 202-206 N Bridgewater, NJ 08807 929.600.9156 Fax: 908.595.0237 parts@audibridgewater.com www.audibridgewater.com

New Jersey Automotive | October 2020 | 21

LOCAL NEWS

AASP/NJ Meets with Legislators and Insurance Reps on Claim Settlement Issues

Representatives from AASP/NJ recently joined Assemblyman Ronald S. Dancer (R-Burlington, Middlesex, Monmouth and Ocean), Assemblyman Jon M. Bramnick (R-Morris, Somerset and Union) and representatives from the Insurance Council of New Jersey for a special virtual meeting to discuss a host of issues between the collision repair and automotive insurance industries. The meeting was organized in response to a letter sent to the legislators by AASP/NJ Collision Chairman Dennis Cataldo, Jr. (D&M Auto Body; Old Bridge) calling for assistance in addressing insurer-related issues, including constant violations of Title 11 of the New Jersey Administrative Code, Unfair Claims Settlement Practices and lack of care or responsibility when trying to negotiate a fair claim settlement for a properly and safely repaired vehicle. The letter stated that AASP/NJ had already made numerous unsuccessful attempts to work out these matters

through the New Jersey Department of Banking and Insurance and the New Jersey Motor Vehicle Commission. AASP/NJ Executive Director Charles Bryant explained that although there are regulations governing auto physical damage claims and unfair claim settlement practices in the state, insurers are not subject to a private right of action to hold them accountable if they violate them. This only leaves the option to make a complaint with the New Jersey Department of Banking and Insurance. However, the Department will only act once it has received enough complaints to show a general business practice. To illustrate a remedy to this problem, the AASP/NJ representatives discussed the association’s ongoing support of the New Jersey Insurance Fair Conduct Act (A1659). Co-sponsored by Assemblyman Dancer, the legislation would establish “a private cause of action for first-party claimants regarding certain unfair or

Continued on page 38

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OUT OF BODY (AND MECHANICAL) EXPERIENCES

Continued from page 11

I think you know how the next election went. Gore was an “inconvenient truth” for me. George W. Bush seemed like a regular guy. Or, I should say, was presented as a regular guy. I mean, how regular a guy can you be when your family is worth hundreds of millions? But love him or hate him, it’s hard not to agree that he was very likable. John (why the long face) Kerry? I voted for Bush. Twice. Next up was the vote for change. It’s crazy that I have to actually be careful in writing about this, because I could be called a racist if I say one word that could be misconstrued. Hell, I’m sure some might call me a racist just because I didn’t vote for Obama. Ugh, times like these… Anyway, like many elections, sometimes you vote for someone, not against someone. I always liked John McCain. He was a war hero and he seemed like a good man. And his policies seemed to ring closer to what was important to me more than Obama’s did. I thought the same thing about Mitt Romney, but I was wrong about both those guys. Not that I would have voted for Obama, but McCain (R.I.P.) lost me when he spitefully voted

against changing Obamacare, and Romney has shown his true colors over the last few years. There were also two great books written about both elections that clearly showed that neither man was qualified to be president. That brings us to 2016. Hillary versus the Donald? Come on. I won’t get into policy, but as I predicted four years ago, Trump has been the most entertaining president ever. Looking back, I voted Republican in every election, which is kind of strange since I’m a registered Democrat. (I have voted for a Democrat in other types of elections.) Hindsight being 20/20, would I change any of those votes? If Clinton didn’t have Gore or Hillary, most definitely. But the others? I don’t think so. In a year like 2020, a realist looks at what’s best for their family and makes the decision based on that. For my family and me, things were pretty damn good before COVID-19 hit. Post-COVID-19? Who knows? If things come back like I hope they will – or if not, either way – I want to be entertained. I don’t hate Joe Biden, but I think you know who I like. Stay safe. Have faith. NJA

New Jersey Automotive | October 2020 | 23

NATIONAL NEWS

SCRS and CIC Announce November Virtual Events

The Society of Collision Repair Specialists (SCRS) is pleased to announce that it will continue its decade-long collaboration with the SEMA Show in Las Vegas with the online delivery of its Repairer Driven Education (RDE) series in conjunction with SEMA360, an online marketplace that has been created to allow manufacturers and resellers in the specialty automotive segment to connect and conduct business. Both SEMA360 and SCRS’ RDE Series will take place November 2-6. “Education has always been a distinctive highlight of

our ongoing partnership, and we are thrilled to see the innovative approach our colleagues at SEMA are taking to addressing the industry’s need for connectivity,” comments SCRS Chairman Brett Bailey. “SCRS has been hard at work with our speakers and subject matter experts in transitioning our program in a way that harnesses the same great value the industry has come to expect from the information in our sessions.” Full Series logins for the RDE experience will now include week-long access to SCRS’ collision repair education program. Additionally, a Full Series pass will provide greater accessibility to all employees within the repair facility for the same $375 that a single individual would have previously invested during the SEMA Show. Participating businesses will also have ongoing access to archived sessions after they have aired. More details will follow; stay tuned to scrs.com/rde for future updates. Later in the month, the Collision Industry Conference (CIC) has set November 10 and 11 for its year-end virtual

Continued on page 39

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FRED BEANS PARTS 131 Doyle Street Doylestown, PA 18901 Phone: 877-942-3267 orders@fredbeans.com www.fbparts.com

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NATIONAL NEWS

Industry Legend Toby Chess Seeks Kidney Transplant

Longtime industry educator Toby Chess, a longstanding participant in the Society of Collision Repair Specialists (SCRS) and the Collision Industry Conference (CIC) and a tireless advocate for the use of OEM repair procedures, is currently battling kidney disease and is in need of an organ transplant. “Toby Chess is known throughout our industry not only

PRESIDENT’S MESSAGE

Continued from page 14

huge liability risk for shops that use them. Toyota isn’t alone, as many other OEs have taken the same position. These parts could be built differently in order to avoid copyright infringement. They could be counterfeit or contain blemishes and defects that are not warrantable by the manufacturer. A simple question to ask would be whether the OEM would warranty these parts. The answer is no. This whole situation is unacceptable. So, why are we seeing “Opt OE” so much these days? Well, that goes back to the lack of a concrete definition. Over the past few months, AASP/NJ members have reported that the term “Opt OE” is being used to describe OEM parts made for America that have been discounted by suppliers to make these products more appealing to insurers. In addition to getting certain suppliers to sell these parts below the list price, some insurers are actually demanding that shops purchase from these complicit vendors. If the shops choose to buy from somewhere else, they are told to expect to only get paid at the reduced prices that their suppliers offer. That’s insane. It’s clear that this is just a way for people to put their hand in our pockets and take our parts profit. Let’s say that we complete a job using a few “Opt OE” parts purchased at a total discount of $40. Now, take that $40 for that one job and multiply it by the average number of ROs we see

28 | New Jersey Automotive | October 2020

as an amazing instructor with a plethora of technical knowledge but for his willingness to give of himself, impart his knowledge to others and to ALWAYS do the right thing,” noted the GoFundMe page created to help Chess in his time of need. “He has spent his life in service of others within our industry and now has the opportunity to feel the reciprocal support from an industry that appreciates what he has done.” A CIC Hall of Eagles recipient, Chess is a multiple award-winning collision training specialist through I-CAR and SCRS. He has received the SCRS Lifetime Achievement, Lifetime Honorary Membership, Industry Achievement, Collision Industry Individual Service and Humanitarian Awards, among many other prestigious industry honors. Donations for Chess can be made at gofundme.com/f/payitforward-to-toby-chess.

NJA

in a week. Then, take that number and multiply it by 52 weeks in a year. Do you see how problematic this is for our industry? Somebody’s making money here, but it’s not us. Where does it end? Additionally, time delays are common when “Opt OE” parts enter the picture. Only a few vendors are selling these parts, and I have seen 10 additional days for one of these suppliers to obtain them. Some of these parts are not even available, and your profit margin decreases because you have accepted them without questioning anything. Another issue to consider is that although a seemingly legitimate vendor might be selling “Opt OE” parts, there might be questions over how that place even got them. It’s possible they sourced those parts from an outside party to sell. Again, who actually provides the warranty in these cases? Does the packaging accurately represent what’s inside? It’s not always easy to tell. Of course, this situation gets even more ambiguous when “Opt OE” parts are also sold by sketchy fly-by-nighters online at heavily reduced prices. Although this is a very confusing and frustrating issue with plenty of smoke and mirrors, it should be seen as an opportunity for shops to truly look at the quality of the parts they’re getting. As always, what you decide to put on a vehicle should come down to knowing and trusting your part sources and confirming that you’re actually receiving a product that meets your standards. Don’t accept anything less than that. NJA

HYUNDAI IS PROUD OF ITS REPUTATION FOR QUALITY AND SERVICE. SO ARE THE DEALERS AND BODY SHOPS WHO RELY ON GENUINE HYUNDAI PARTS. TO MAKE CERTAIN THAT YOU GET THE RIGHT HYUNDAI PART, ASK FOR A HYUNDAI WHOLESALE PARTS SPECIALIST. For Genuine Hyundai parts, contact an Authorized Hyundai Dealer. MAXON HYUNDAI 2329 ROUTE 22 WEST UNION, NJ 07083 TOLL FREE: 800-964-7281 FAX: 908-851-5631

LIBERTY HYUNDAI 371 ROUTE 17 NORTH MAHWAH, NJ 07430 201-529-3600 FAX: 201-529-3051

WAYNE HYUNDAI 1244 ROUTE 23 NORTH WAYNE, NJ 07470 PH: 973-646-0333 FAX: 973-694-1700 waynehyundai.com

New Jersey Automotive | October 2020 | 29

AASP/NJ FEATURE by Joel Gausten

A Virtual 2020: Victory

Few things have been predictable this year, but it’s no surprise that AASP/NJ’s annual NORTHEAST® Automotive Services Show still delivered an unforgettable experience despite the odds. With numerous industry events going virtual in light of the COVID-19 pandemic, AASP/NJ created a special online version of NORTHEAST – the largest regional industry show in the country – that was initially held during August 21-23 (the original rescheduled dates for the live show after the event at the Meadowlands Exposition Center was postponed in March). Due to the The online version of overwhelming response NORTHEAST earned to the three-day websupport and based event, participation from NORTHEAST was extended to allow exhibitors eager to take company product advantage of its unique information and contact sales and networking details to remain on the opportunities. show’s website through September 7. “This was a different kind of NORTHEAST show for all of us, but it was still a great one,” comments AASP/NJ President Jerry McNee. “We’ve received tremendous feedback from exhibitors and virtual attendees alike, and we’re pleased to have been able to offer something of high value despite the pandemic. Those who took part in the virtual show left happy that they were still able to have a NORTHEAST experience, and they’re excited for what is to come when the show returns as a live event in 2021.” “From the start, we saw the virtual NORTHEAST show as a resource for connections,” adds Thomas Greco of NORTHEAST event managers Thomas Greco Publishing. “By extending the availability of our exhibitors to the NORTHEAST audience, we were able to continue fostering those connections in a more open-ended way, benefiting all parties.” The online version of NORTHEAST earned support and participation from exhibitors eager to take advantage of its unique sales and networking opportunities. “The AASP/NJ team showed what an entrepreneurial and forward-thinking organization they are with the transition to a virtual NORTHEAST show this year,” offers Pete Strawn, manager of automotive sales for CCC Information Services. “This new approach embodies the fresh perspective that collision repairers must bring to their

30 | New Jersey Automotive | October 2020

business to thrive in a post-COVID world. Although face-toface conversations weren’t possible at the show this year, we were still able to connect with operators to further conversations about how CCC can help them address their challenges moving forward. We’re appreciative of the responsiveness and adaptability of the AASP/NJ team and the support they provided throughout the event.” Nick Mattera, co-owner of NORTHEAST 2020 Lanyard Sponsor Innovative Solutions & Technology, welcomed the chance to touch base with his fellow industry members in a virtual format. “I appreciate what AASP/NJ did for us to have an opportunity for us to get in front of our customers. Without it, we would have had to wait until next March. It felt good to actually get in front of people. It was done virtually, but we did get some good leads and spoke to people we hadn’t in a long time.” This positive experience has made Mattera even more excited for next year’s live NORTHEAST, scheduled for March 19-21 at the Meadowlands Exposition Center in Secaucus. “I’m expecting a great show in 2021, because everybody is going to be interested in seeing what’s new. We have some really good new stuff we’re going to be showing there.” The virtual NORTHEAST kicked off on August 21 with a Collision Repair Overview Virtual Workshop presented by Gold Show Sponsor Ford. Presented by the automaker in conjunction with I-CAR, the two-hour presentation provided a variety of useful information about Ford vehicles, technological advancements and collision repairs. It also offered an overview of Ford’s collision philosophy, reviewed current product lines, identified the most frequent types of damage on Ford vehicles and discussed the latest collision repair methods available for them. Training was also made available through the Washington Metropolitan Auto Body Association (WMABA), who presented an online version of its popular Collision Professional Repairer Education Program (Collision P.R.E.P.). Online Collision P.R.E.P. classes run through November 18; see facing page and visit wmaba.com/collisionprep for more information. The NORTHEAST Automotive Services Show is the annual flagship event of AASP/NJ. For more information on NORTHEAST, visit aaspnjnortheast.com. To learn more about AASP/NJ, visit aaspnj.org. NJA

COLLISION P.R.E.P. NEWS

Collision P.R.E.P. Explores Shop Sustainability As the collision repair industry moves through an unpredictable year, the need to adapt to change is critical to ensure lasting profitability. This was the greatest takeaway from “Positioning Your Business for Sustainability among Constant Change,” the second presentation in the Washington Metropolitan Auto Body Association’s (WMABA) 2020 online Collision Professional Repairer Education Program (Collision P.R.E.P.) held in conjunction with AASP/NJ’s virtual NORTHEAST® Automotive Services Show. Presented by BASF Business Development Manager John Shoemaker, the 70-minute, AMi-accredited course helped attendees better focus on sustaining their operations through the frequent and intense developments occurring around them. “Relying on status quo isn’t going to work,” he stressed. Considerable time was devoted to discussing the rise of OEM certification programs, noting that they have grown in the industry as a result of automakers’ desire to better protect their brands and ensure proper automotive repairs for their consumers. Shoemaker believes that shops that embrace the OEMs’ increased interest in the repair process will be in a better position to generate work moving forward. “To sustain in our industry, you are going to need OEM certification. There’s probably no way around it. If you’re going to be successful in our environment, you will need to have at least one OEM certification.” OEMs are doing all they can to promote the facilities in their certification programs. Shoemaker explained that this has led to automakers using technologies (such as General Motors’ use of OnStar) to capture repair work at the first notice of loss (FNOL). He predicted that as FNOL practices grow on the OEM side, insurers will have less influence in recommending repair facilities to claimants. Of course, there is no point in being a certified shop if consumers are unaware of this designation. Shoemaker shared a story of a certified dealership that was losing work to a dealer outside of the network due to a lack of promotion of its certified status on its website. “If you’re OEM-certified, you need to tell somebody.” See the schedule at right for information on the remaining 2020 Collision P.R.E.P. courses.

COLLISION P.R.E.P. VIRTUAL EVENTS SCHEDULE

October 22 – 1pm EST

Vehicle Diagnostics & Calibrations: Know What You Know…But More Importantly, What You Don’t Know [Chuck Olsen, SVP-Automotive Technology & Josh McFarlin, VP-Strategic Business Operations, AirPro Diagnostics]

Confucius said, “To know what you know and what you do not know, that is true knowledge.” John Locke said, “No man’s knowledge can go beyond his experience.” The presenters of this topic will illustrate and reinforce the importance of both statements relative to vehicle diagnostics and calibrations and the proliferation of advanced driver assistance systems (ADAS) in vehicles manufactured today. The amount of knowledge, information and misinformation (or myth-information) on the subject is staggering. Collision repair owner/operators, management staff and technicians must know and perform what is necessary and required for every manufacturer, every vehicle, every time (or utilize a service provider who does), which is daunting and often misunderstood. This fact-based session will help to prepare shop owners, managers and technicians for success when encountering new vehicles and ensuring compliance to manufacturer specifications.

November 18 – 1pm EST

Tackling Online Storefront Presence for the Collision Repair Business [Bill Enross, cPrax Marketing]

This fast-moving presentation will talk about how to have an effective website that gets found locally and promotes your skillsets and/or certifications. The discussion will also explore how to get good reviews or respond to negative ones. wmaba.com/CollisionPREP

NJA New Jersey Automotive | October 2020 | 31

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2:46 PM

Diagnostically speaking, there is no substitute. Porsche technology. Porsche Genuine Service & Parts. Contact one of these authorized dealers. Town Porsche 105 Grand Avenue Englewood, NJ 201-227-6505 Fax 201-227-6553 town-motorcar.porschedealer.com

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Paul Miller Porsche 3419 Route 46 East Parsippany, NJ 973-227-3000 Fax 973-575-8396 paulmillerporsche.com

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New Jersey Automotive | October 2020 | 33

COVER STORY by Joel Gausten

Clearing the

FO G:

In an industry already inundated with terms and acronyms, shops across the country now have to contend with a slew of newer ones that are causing grief and confusion – as well as safety and monetary risks – in the parts ordering process. What’s in a Name? Nobody Knows In 2020, it is not uncommon to see terms like “Opt OE,” “Alt OE” or “Surplus OE” on estimates and in listings offered by suppliers. Traditionally, these classifications have been used to identify original automaker parts that have been sourced outside of official OEM dealers/ sources. However, the realities surrounding the origin and application of these products in the United States are as clear as mud. In some cases, third-party part sellers (typically found online) may be offering so-called “Opt OE” parts that were actually manufactured for use outside of the US. Although these parts can be purchased by repairers here, they may not adhere to the same engineering and performance standards as those products directly sold by OEM-endorsed sources in America. The availability of these grey market “Opt OE” parts can lead to ambiguity on the shop floor for anyone assuming that the presence of “OE” in a part name translates to a legitimate factory part suitable for use. Unfortunately, the issues with “Opt OE” parts don’t end there. Over the past few months, New Jersey Automotive has received reports from readers that certain part suppliers that commonly do business with Garden State shops are using “Opt OE” to classify factory parts they’re selling below OEM list price. Additionally, certain insurers are said to be pushing shops (even those not involved in DRP arrangements) to only purchase from these suppliers. If these facilities elect to purchase from another source, they are told they will only be paid at the discounted amount offered at the insurer-friendly part source. This creates a multi-pronged problem for shops: Without a clear industry-wide definition for “Opt OE,” a part that falls under this category could be a foreign-

34 | New Jersey Automotive | October 2020

made product not meant for this country at all, a true American OEM part cut in price to make an insurer happy or seemingly anything that a seller chooses to put in that category. This leaves the shop – already pressed for time – to figure out whether the part they’ve ordered is actually what they need it to be. Additionally, the insurance industry’s growing insistence on shops purchasing these parts from chosen vendors is leading to decreased part profits for facilities already hit hard by the COVID-19 pandemic. If you thought insurer-prompted photo estimating was the big headache of 2020, you haven’t seen anything yet. “It’s difficult to get a solid answer on what these ‘Opt OE’ parts are,” comments AASP/NJ Executive Director Charles Bryant. “Even when we ask different people who are very familiar with parts, we get different answers. Nobody can tell us where these parts are coming from – or there’s 50 different explanations for where they’re coming from and what they’re all about. But at the same time, insurance companies are telling shops that they not only have to use them but also have to buy them from designated vendors. It’s ridiculous.”

Frustrations from the Field Not surprisingly, the “Opt OE” dilemma has raised more than a few eyebrows and concerns here in New Jersey. On the issue of insurers demanding that shops buy parts from specified vendors, Bryant is adamant that independent shops do not have to bow down and make concessions. “Insurers can’t tell independent shops where to buy their parts from. Insurers are trying to say, ‘If you don’t buy them, then that’s all we’re going to pay you for them no matter where you buy them,’ but the shops can refuse to do that and bill the customer the balance. Insurers have no right to do this, but some facilities are rolling over because they’re used to letting insurers do whatever they want. I believe that shops should stand up and say they won’t be told where to buy their parts.” Naturally, the “Opt OE” trend is also drawing the ire of

Getting to the Truth behind “Opt OE” Parts parts suppliers who refuse to play into insurers’ hands. “I think it’s dirty business, because the suppliers that are doing this are capturing the market at the expense of their customers,” offers one area wholesale parts manager. “They don’t care about the shops; they’re only doing this to serve insurance companies. The suppliers that are doing this are saying, ‘I’m going to call these parts ‘Opt OE’ and discount the list price for the insurance companies, and then they’re going to tell the body shops to buy the parts from me because I’m the cheapest.’ It angers me, because it’s cutting into the body shops’ profits – no matter how you look at it. They’re being told to buy parts for less than the OEM list price. Where do those discounts end? All that the parts suppliers that participate in this kind of scheme are doing is benefitting insurers – and possibly themselves – at the expense of the body shop. “I don’t think insurers should be allowed to use variations of ‘OE’ on estimating systems,” he adds. “People are getting confused over what these things actually mean. Is it a discounted part? A grey market part? Is the supplier going to tell you what the hell it is?” AASP/NJ Allied Board member Mike Kaufmann (MKDG - Mike Kaufmann Dealer Group) is another industry member who is scratching his head over the “Opt OE” phenomenon. “When I was a parts manager, it was a no-no to lower the list price to an insurance company figure. That was not looked on favorably in this industry, but that is what’s going on here. The body shops are making less money on a part that is considered ‘OE,’ but it’s not always ‘OE.’ In some cases, it could be grey market or have a blemish on it. Shops – not insurers – should be a dealer’s customers.” One parts pro who reached out to New Jersey Automotive warns that some “Opt OE” parts could appear to have legitimate OEM packaging and labeling but still have no place being used on a vehicle sold in the US. “They might be the ‘same’ parts but are made by an OE part vendor and not intended for use by a US OE manufacturer. They are sold directly to grey market wholesalers in the US, who in turn sell them to some OE dealers at a lower cost than they can buy them from their manufacturer. Technically, these parts – if proven to have been sourced this way – would not carry a manufacturer warranty. If you ever see an ‘Opt OE’ part on an estimate that’s greater than five percent off the list price, then you need to be very suspicious.”

An Uneasy Explanation For most of 2019, the Collision Industry Conference (CIC) Parts and Materials Committee – comprised of more

than 200 inter-industry members – focused its attention on reaching a consensus on acceptable parts terminology and definitions in the US marketplace. The ongoing discussions revealed that even OEMs have varying ideas of how to handle “Opt OE” parts. For example, Toyota – in an official web article entitled “Don’t Opt for Opt OE Parts” (toyotapartsandservice.com/ collision/dont-opt-for-opt-oe-parts) – cautions that these items are “not Genuine Toyota Parts that have been designed to be distributed in the North American market.” However, this writer received industry feedback in the summer of 2019 indicating that parts marked as “Opt OE” were available at certain Toyota dealerships in New England. At the July 2019 CIC in Indianapolis, we asked Eric Mendoza, manager of Toyota’s North American collision operations department, for clarification on the matter. Although he didn’t wish to directly define “Opt OE” from the CIC stage out of respect for the forum’s work on the subject, he noted that “the question is coming from that ‘Opt OE’ category and what’s getting dumped in that bucket more so than how the part was distributed and if it’s [through] authorized distribution.” He also confirmed that the terminology could find its way into legitimate North American wholesale parts operations. “Our dealers are always encouraged to put parts in the ‘Opt OE’ category because ‘Opt OE’ is more appetizing to some of the people who are paying the bills for them. So, that muddies the water of what’s getting put into ‘Opt OE’ and if it’s genuine.” While Mendoza acknowledged the ambiguity that exists even in above-ground parts sales channels, he was clear in his opposition to any Toyota parts sold outside of the manufacturer’s authorized supply chain. “The Toyota dealers are your only opportunity to buy an authorized Toyota part from the Toyota Motor Corporation.” With the “Opt OE” controversy far from over, shops must remain diligent in confirming that the items they are ordering are truly what they appear to be. When faced with a question over the classification and source of a part, shops should always request a clear definition from the provider (including an OEM dealership’s wholesale department) and directly verify with the automaker that the part source is authorized by them to sell in the US, the part is indeed intended for use on vehicles in this country and that its warranty is provided by the correct party. A further examination of “Opt OE” parts will be featured in next month’s New Jersey Automotive.

NJA New Jersey Automotive | October 2020 | 35

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New Jersey Automotive | October 2020 | 37

EXECUTIVE DIRECTOR’S MESSAGE

Continued from page 17

refusal to pay for the correct repairs can cause the death of vehicle occupants. Even with this knowledge, many insurers are still refusing to accept their obligation to pay for the actual cost of safe and proper repairs. It is for this reason that legislation has been introduced to create a private right of action when an insurer refuses to follow the regulations that govern fair claim settlement practices. Assembly Bill 1659 has been introduced to create a private right of

action for such things as unreasonable delay or denial of a claim. Once it is established that a violation has occurred, the plaintiff would be entitled to such things as prejudgment interest, reasonable attorney’s fees, all reasonable litigation expenses and possible treble damages. It would put teeth into the regulations that have been a joke for so many years. Again, this is now a matter of life and death! I would encourage anyone who has been abused by an insurer to support this legislation. AASP/NJ will be supporting it, and we will keep everyone advised of where things go from here. Stay tuned! NJA LOCAL NEWS

Continued from page 22

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unreasonable practices by their insurer.” Additionally, successful claimants would be entitled to (among other things) reimbursement for their loss and court and attorney’s fees. According to AASP/NJ President Jerry McNee (Ultimate Collision Repair; Edison), insurance representatives who attended the meeting expressed intentions to work to block passage of legislation of this nature. Despite this pushback, he believes the bill would provide a level playing field between shops and insurers in their legal obligations. “Nowhere in an insurance policy does it say that an insurer will under-indemnify the consumer and short-pay the bill. Unfortunately, there are no repercussions for these actions. If I, as a body shop owner, can be subjected to legal consequences if I defraud somebody, why would that not also apply to insurers? There is nothing that stops them from doing what they’re doing.” In regard to proper repairs, AASP/NJ voiced its concerns over the use of certain aftermarket parts, noting that these items have not been recommended by vehicle manufacturers and could pose potential safety risks to vehicle occupants. Stressing costcontainment, an argument was made by the insurance side that a

vehicle could run in the six-figure range if it were rebuilt from scratch using only OEM parts. Bryant offers the following statement in response to this position: “There are several parts for a vehicle, including the frame, that do not have an aftermarket option. That was an argument that didn’t hold water.” Despite the friction points between the two industries represented, Bryant was pleased to have the opportunity to attend the meeting, voice collision industry concerns with the other attendees and promote the benefits of the New Jersey Insurance Fair Conduct Act. “The meeting was successful in opening the lines of communication. We brought up some important points that

NATIONAL NEWS

Continued from page 24

meeting. Each day will run from 11am to 3pm EST via Zoom and will feature updates and presentations from various CIC committees. A special promotional code to attend the virtual meetings for free is available at ciclink.com/sponsors. In related news, CIC recently announced that Darrell Amberson, president of operations for Minnesota-based LaMettry’s Collision, has

the legislators may not have been aware of, and we had an opportunity to express our concerns with insurance industry representatives. The bottom line is that our industry needs something strong enough to make insurers in our state follow the rules.” “The legislators in attendance appeared very receptive to our needs,” Cataldo adds. “I feel the biggest takeaway from the discussion was that our industry needs to continue to advocate for consumers, as they are the ones who are most affected by current insurer conduct and need to feel secure in knowing their vehicles are being repaired in a safe and proper manner.” NJA

been named the forum’s new chairman. Amberson, who most recently chaired the CIC Governmental and Legislative Committee, follows outgoing Chairman Jeff Peevy (I-CAR). To learn more about SEMA360, visit sema360.com or semashow.com. For more information about SCRS, please visit scrs.com. More information on CIC is available at ciclink.com. NJA

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Wharton Insurance Briefs

Dealer plate usage has been an ongoing issue for many years. Although there are different interpretations of the law (and many clients have both won and lost court cases), several insurance issues should be reviewed. In general, dealer plates should be used by dealers to allow their prospective customers to test drive a vehicle for sale or to transport a vehicle from one location to another (i.e., auction to dealer lot/yard or dealer lot to buyer’s home, etc.). Dealer plates should only be used on vehicles if you hold the ownership/title to it. Dealer plates should not be given or lent to siblings, friends or relatives for use. Insurance carriers consider this “improper use” and have declined to provide coverage after an accident. You should review your insurance program with your agent to determine the scope of your coverage and any limitations, such as the driver’s age. Many programs limit drivers to a minimum age of 21 and owners’ children to age 19. Drivers under those ages may not be covered by your insurance program. Please call me if you have any questions regarding this coverage in your insurance program.

Mario DeFilippis, AAI Vice President (732) 686-7020 (office) (908) 513-8588 (cell) mdefilippis@whartoninsurance.com

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