The Senior Center for Health & Security

America's Seniors and the Right to Repair Their Cars
- Will They be Safe or Stranded?

While most people take it for granted, the critical right to repair one's motor vehicle is quickly eroding, and America's seniors stand to lose the most as the erosion continues. What is the "right to repair?" It is the option to have your car repaired at the repair facility of your choosing, the one you think is the most convenient, the one that has the record for honesty and integrity, and the one that provides the finest service at the best price. Unfortunately, unless something is done to protect it, that right to repair may soon disappear forever. If that happens, millions of older Americans could end up stranded.

Again, while most people have not begun to focus on this issue, the battle lines have been drawn and the spoils now in sight (if nothing averts the coming car dealer service monopoly) for automakers and their affiliated dealers will be huge. According to a recent statement by the Federal Trade Commission (FTC), "U.S. consumers spend $80 billion annually to repair and maintain the two hundred million cars currently on the road." The FTC spokesman noted in his testimony before a Congressional subcommittee that consumers "have a significant interest in automobile repair and maintenance markets that operate properly and efficiently. Consumers and independent car repair facilities must have access to tools needed to diagnose, service, and repair vehicles, but access to that information is not as easy or relatively inexpensive as it once was," the testimony said.

What a bureaucratic understatement! If the independent repair shops continue to lose the ability to access the necessary diagnostic and repair information, one day soon motorists will be stuck with no feasible alternative to the car dealers and the repair shops directly or indirectly tied to the automakers. Car owners, having perhaps spent tens of thousands of dollars for their vehicle, will lose the right to have that vehicle repaired at a shop of their choosing -- all thanks to modern technology and the fact that the technology in question can be used against them by the car companies.

1996: Anti-Consumer Turn

How did the situation take this anti-consumer turn? There are federal government regulations that require all 1996 and newer cars to be equipped with a computer system that alerts the owner of the vehicle to a mechanical problem. The computer system is designed to help automotive technicians diagnose and repair the problem. Currently, only the automobile manufacturers and their dealers have access to all of the information stored in the vehicle's computer about the mechanical problems, and the parts and repairs needed to fix the problem. This puts the independent shops, and the motorists who depend on them, in an untenable position. Again, only carmakers, car dealers, and their favored repair shops have access to all of the critical technical data.

Although many car dealers provide fine service, many do not. A recent Washington Post article related the trials and tribulations of a vehicle owner seeking fair treatment at a car dealer that, apparently, refused to honor his parts warranty (for a part that had failed twice before), tried to convince him that he was at fault, kept his car for a month, and charged him $3,122 (about a third of that for 60,000-mile regularly scheduled maintenance). Then, after his failed attempt to find justice via the customer advocate provided by the carmaker, the motorist turned to the Post's Consummate Consumer column writer. Finally, after investigating the dispute, the car company conceded that the dealer was at fault, and sent a refund check of just $979.55, not the $2,000-plus the customer was charged for the repair. On inquiring, the customer was told that the rest of the bill covered "other repairs," repairs he hadn't asked for and didn't expect. Along with the check, he received no apology, no explanation, and no best wishes, indicating the car company in question still didn't own up to its responsibility. That's simply one dealer-repair horror story among many, but it clearly illustrates the position many drivers could face, if the anti-competitive car dealer monopoly on repair information closes the present repair options provided by the independent shops.

An online 2003 comparison of Dealers vs. Independent Repair Shops by Bankrate.com quotes Robert Krughoff, then the President of Consumer's Checkbook, which has rated auto repair shops since 1976, as saying, "People are more satisfied with independent repair shops." "And they tend to be less expensive than dealers," he noted. As the article also reflected, "Independent repair shops rely on word-of-mouth recommendations and customer referrals for much of their business. So it's no surprise that many independent garages place a high premium on customer service and satisfaction."

In a recent CBS 47 Cut costs on car maintenance and repairs piece in Jacksonville, Florida, Consumer Reports indicated car owners could save "plenty of money" by using independent shops rather than car dealers for routine maintenance. They noted that, "many people think that they will jeopardize a vehicle's warranty by not taking it to a dealership, but federal law protects you. You can have your vehicle serviced anywhere you like without losing your warranty." That will remain true only if the maintenance and repair data can be accessed by repair facilities other than car dealers. That piece also noted that Consumer Reports had called seven different car dealers in the same area for a 60,000-mile service price quote, on the same vehicle. They got seven different dealer quotes, and the quotes varied by almost $800. In addition, most of the dealers they called wanted to do more work than was recommended by the auto manufacturers. These clearly are not good spots to strand hapless seniors on fixed incomes. They need more choices.

Aging Americans, Aging Vehicles

According to the Automotive Aftermarket Industry Association (AAIA) 2005/2006 Aftermarket Factbook, the U.S. motor vehicle population expanded 3 percent in 2004, reaching 232.6 million vehicles. Of these, "light vehicles" (cars and light trucks) totaled 224.982 million. The Factbook notes a declining vehicle scrappage rate, and an increasing vehicle average age, evidence of the lengthening lives of motor vehicles. According to the Factbook source (R. L. Polk & Co) the average age of our cars on July 1, 2004 was 9.8 years old, while our light trucks were on average 8.6 years old. Older cars, most "out of warranty," will continue to need increasing maintenance and repairs.

If you use the Factbook's new record figure of 1.14 motor vehicles (in 2004) per licensed driver, then use the U.S. Health and Human Services 2002 estimate of 35.6 million Americans 65 years of age or older and then consider that in 1997, almost 92 percent of all men and 70 percent of all women over 60 years old were licensed to drive (according to Mobility of the Elderly, Good News and Bad News, a 2004 paper by Sandra Rosenbloom, The Drachman Institute, University of Arizona, Tucson), you begin to see the huge number of senior-owned vehicles. And as the population ages that number will only grow.

As also noted in Mobility of the Elderly, "driver licensing among the elderly is very high and still growing, although there is not much more room to grow." Again, from Rosenbloom's insightful paper, it is estimated that "Licensing is close to universal among those who will become 65 years old in the next 15 years. By 2012 almost every U.S. man and more than 9 out of 10 U.S. women will enter their retirement years as drivers."

Of course, as has been noted many times in many places, that 2002 figure of 35.6 million Americans over 65 years of age is expected to double to 71.5 million by 2030, when the last of the baby boom generation hits the official retirement age. Based on a conservative use of the licensing (90 percent) and ownership (1.14 vehicles per licensed U.S. driver in 2004) numbers above, Americans 65 years old or older could easily own an estimated 73.359 million vehicles by 2030, with an average age per vehicle somewhere in excess of 9.4 years old (the 2004 light vehicle average). That's a lot of senior vehicle repair and maintenance! And just who will service and repair those cars and trucks for retirees?

Independent Repair Shops and Technology

The answer to that question depends on the ability of the independent shops to share the technology necessary to perform vehicle maintenance and make repairs. Today, automobile dealers provide an average of 30.6 percent (actual percentage share for 2004 according to AAIA and the National Automobile Dealers Association (NADA) data) of automotive aftermarket sales. This figure reflects dealer non-warranty service as a percentage of the total U.S. light vehicle aftermarket. That's less than a third of the overall non-warranty light vehicle repair and maintenance service, but it has grown from 28.8 percent in 1998. And of course, that means that almost 70 percent of the non-warranty vehicle maintenance and repair work is now performed by service facilities other than a car dealer. That's a huge differential that indicates a sizable consumer preference for independent shops. Price, convenience, and better customer service all play large roles in building this clearly overwhelming customer support base for the independents.

Let's look at the price differences on some basic services (according to a 2003 market survey by Ducker Research, conducted in the Metro Detroit area), comparing car dealers and the independent shops. No fewer than three of each were used to determine the averages. The average car dealer cost to replace four spark plugs in a 1999 Chevy Cavalier was $36.88 just for the parts, while the independent average was $16.25. The parts savings was $20.63, or 56 percent! The average labor cost to install the plugs was $92.18 at the dealers, and $50.99 at the independents. That put the combined "part and installation" savings at $67.83 or 48 percent! That's a big reason why people choose independent shops over dealers.

On a muffler and tailpipe replacement for a 1996 Chrysler Town and Country mini-van, the reported net part and installation savings were an average $147.59 or 42 percent, with the independent repair shop again beating the dealer. Replacing a battery for a 1997 Ford Explorer was reported to cost an average $125.84 at the dealers, but only $98.49 on average at the independents. These are real savings that could disappear if the car dealers become the only maintenance and repair option.

Car Dealer Monopoly Threatens Seniors' Independence Consider the 20 percent to 48 percent savings motorists will forego in the future as a "car dealer monopoly tax," one that every driver will soon pay, but that seniors will least be able to afford. And yet, that very situation is happening today, according to an American Automobile Association (AAA) press release, supporting the "Right to Repair" one's car where one chooses; "As technology has become more advanced, service data in today's vehicles are increasingly governed by sophisticated computer systems. Some American and import automobile manufacturers are currently impeding independent repair facilities' access to and use of data generated by automobiles sold to the public, leaving consumers with no choice but to take their vehicle to a dealer." AAA, of course, opposes that car dealer monopoly on car repairs and maintenance.

What would that car dealer repair monopoly do to America's seniors, both today and in the future? It would devastate them, perhaps to a greater degree than any other group.

As noted before, Sandra Rosenbloom's paper, Mobility of the Elderly put it well, "Over the last 10 years, older people have become more dependent on the private car and this dependency has had an increasing impact on their lives. The car appears to have given older people more choices, a wider range of possible activities, flexibility, and independence. Certainly some argue that by supporting suburbanization and the decentralization of U.S. communities, the car has made necessary for everyone to drive and removed walking, biking, and mass transit as options. But whether cause or effect, reliance on the private car is the backbone of the lifestyle enjoyed by the majority of older people today." She goes on to note, "Older Americans are now more dependent on the private car than at any time in U.S. history."

Another important paper on the subject, Transportation Policy for an Aging Society, Keeping Older Americans on the Move, by Roger W. Cobb, Brown University, Providence, Rhode Island, and Joseph F. Coughlin, Massachusetts Institute of Technology, Cambridge, reflects on the importance of the personal car much more poignantly, "Research and anecdotal evidence have shown that people routinely view the ability to travel as synonymous with personal freedom and independence. For example, many older people see mobility as inextricably linked to personal image, dignity, and well-being. Other research has suggested that the ability to stay connected to friends and community is an important element to physical and mental health. Most adults equate mobility with the ability to drive; the loss of driving is seen as a handicap, which results in, at best, a change in lifestyle and, at worst, the end of life as they know it. One survey of older people in Southern California identified losing the ability to drive as more frightening than even the loss of a spouse or the poor health of a child."

Another important 2004 study, Focus Group Participants Reflect on Transportation by Helen Kerschner and Rhonda Aizenberg, of the Beverly Foundation, Pasadena, California, found the following priorities from their "transportation rich" group of 84 seniors who either drive their cars or live within a mile of transportation, "Being able to drive is very important to us and for us. The automobile is our most "user-friendly" mode of transportation. We lament the fact that driving can be so difficult. However, when we limit our driving our lives become limited because we cannot do the things we want to do, when we want to do them. While life can be difficult if we have to limit driving, stopping will have a terrible impact on our ability to get around and perhaps on our lives in general. We are concerned that even when public transportation is good, we may not be able to use it."

That same group was asked, "Is Limiting or Stopping Driving an Alternative?" Their response, "We know when it is necessary to stop driving at night or in heavy traffic, even though we also know we might experience difficulties because of that decision. Why? We realize that limiting or stopping driving altogether might interfere with our ability to get to the places we want to go. It can make it difficult for us to maintain the fullness of life, to do fun things, to have an independent lifestyle. The greatest tragedy of all is that it may force us to be dependent on others. These things put fear in our hearts and may be part of the reason we do so little planning for the time we will have to stop driving." Many of these older Americans may be forced to stop driving altogether, if the fast approaching car-dealer monopoly on car and truck maintenance and repair comes to fruition. It will strand millions who cannot afford the car dealer mark-up in price, or it will force them to drive poorly maintained, unsafe motor vehicles.

Unfounded Fear of "Cheap Parts"

Unfortunately, the carmakers and car dealers are trending towards higher costs at the same time they are withholding critical technical information from the independent repair shops. A recent Wall Street Journal article (7-7-05) titled, Car Makers Cut Free Maintenance, Move by Wide Range of Brands Could Add Thousands of Dollars to Cost of Ownership reflects the overwhelming trend. And, the "secret warranty" items, items that many car owners never find out about, have become the regular fare of the nightly news shows. Senior car owners must have the "right to repair" their cars and trucks at independent shops.

Ironically, when the carmakers and dealers are asked to share the repair and maintenance data with the independent shops, they almost always express the fear that aftermarket repair and supply companies will be able to use the withheld data to make cheap parts overseas, and then import those parts into the U.S. The fact is, none of the aftermarket companies makes parts, and the American automakers have been importing parts for many years from places like Mexico, South Korea, and Canada, and General Motors announced earlier this year (Wall Street Journal 8-8-05) that they will be buying an estimated $1 billion in auto parts from India by 2008. In the words of P.Baldran, Vice President, General Motors India, We are planning to increase auto-parts sourcing from India substantially over the next few years." The article notes that GM is among various automakers, including Ford Motor Co., Daimler-Chrysler AG, Volkswagen AG, Volvo AB, and Mitsubishi Motors Corp. that are currently buying auto parts from low-cost countries such as India.

Public Support for "Right to Repair"

It is also clear that the general public strongly supports the individual owners' "right to repair." When a 2001 (Southwest Policy Group) poll of 803 registered voters asked about who should own the information contained in a car's computer, almost three-quarters (72 percent) "strongly agreed" that the information should be available to the owner and the owner's mechanic. Another 17 percent "somewhat agreed," for a combined net agreed figure of 89 percent. Only a combined 10 percent of those surveyed agreed (strongly or somewhat) that "Only automobile manufacturers and their dealers should have access to the information stored in the computer about mechanical and the parts and repairs needed to fix the problem." This huge level support is reflected in the consumer groups who have recognized the obvious problem of an effective car-dealer monopoly on motor vehicle maintenance and repair. Along with numerous others, RetireSafe and 60 Plus have been speaking out about how this monopoly impacts seniors.

As part of National "Car Care Month" in October 2005, AAA, the nation's leading consumer organization for car owners and drivers, offered to "Assist America's Aging Population in Finding a Reputable Car Repair Shop That They Can Depend On." To do that, AAA offered their approximately 7,800 AAA Approved Auto Repair shops across the continent. Those AAA Approved shops meet the association's stringent criteria for customer satisfaction, equipment training, warranties and cleanliness. Importantly, according to AAA, more than 50 percent of those "Approved" repair shops are independent shops. Nothing could be a stronger, more persuasive argument as to why the "right to repair" so critical to seniors must be maintained.

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