Right to Repair Coalition Releases Economic Impact Study

Bay State Families Could Save 42%, or $258 Per Year
If Legislature Passes "Right To Repair" Law, New Study Reveals

Published in the November 2009 eNewsletter from the Massachusetts Right to Repair Coalition, massrighttorepair.com

While it may come as no surprise that vehicle repairs cost an average 42 percent more at new car dealerships than at independent repair shops, a detailed analysis of each Massachusetts legislative district has shown that if Bay State families were continuously forced to have their vehicles repaired only at new car dealerships, it would cost an average of $258 per family each year, adding up to a staggering $625 million in excess costs annually.

Consumers need to have access to competent and up-to-date vehicle repair information whether that is at a dealership or independent repair shop. “By passing a Right to Repair bill, the legislature will be preserving consumer choice as well as what can be in some cases a more economical solution for consumers in need of car care." said John Paul, AAA Southern New England's "Car Doctor."

When provided full access to diagnostic repair information and tools, independent repair shop technicians can repair your car as well as anyone at a franchised new car dealership. However, absent complete repair information, these independent shops are, with a rising frequency, forced to send many customers back to the dealership to finish the repair. This is the central issue addressed by "Right to Repair" legislation.

The Motor Vehicle Owner’s Right to Repair Act (SB124 and HB228) simply requires auto manufacturers to make available to independent garages and consumers the same repair information and diagnostic tools that they provide to their franchised new car dealer service centers for a similar price. "The Right to Repair Act is about choice for consumers– their right to take the vehicle they purchased to the repair shop that is most convenient, does the best work, and is the greatest best value for their family budget;," said Art Kinsman, spokesman for the Right to Repair Coalition, "and during these difficult economic times, car owners deserve and need to should have a choice of whether they want to save an extra 42 percent on average for their auto repairs."

"With a backdrop of the toughest fiscal climate in recent memory, this study clearly shows that by passing the Right to Repair Act, lawmakers will enable their constituents to save significant money without costing the Commonwealth a dime," Kinsman added.

The first-of-its-kind study conducted by John Dunham Associates revealed dramatic differences in the costs of parts and labor between franchised dealership and independent repair shops, and ultimately shows how much consumers would save from the availability of independent repair shop options in any legislative district.

"The bottom line is our analysis provides a reasonable estimate of what the cost to consumers in each legislative district would be if all repairs now conducted in independent garages were shifted to dealer-franchised facilities," said study author John Dunham. His study demonstrates that if independent garages in Massachusetts charged the same rates as their dealer-owned competitors, consumers would pay $6.25 million more for car repairs, breaking out to an average of $258 per family obtaining repair services in a given year.

The fact that the number of dealerships declined from over 500 to 437 this year naturally limits the ability of consumers to access the appropriate dealer repair shops if they needed to find one. The reduced competition among the dealer owned facilities could further drive up the price differential between them and independent garages.

In fact, the study further shows that across the United States, independent repair shops experience a 5.6% decline in productivity, resulting in a $5.9 billion per year loss in revenue due to the difficulty in locating and obtaining the necessary tools and information from the manufacturers.  In Massachusetts this translates into $68,121,900 for all 5,661 repair shops in the state, or $12,034 per shop—significant since the average shop has sales of just over $263,190.

"In addition to the fiscal impact on the consumers of allowing auto manufacturers to control access to repair information, lawmakers should understand that one in 10 jobs in Massachusetts are tied to small, family-owned  independent repair shops, and the other manufacturing and distribution jobs related to the aftermarket industry," said Kinsman.

The report by district can be found at www.guerrillaeconomics.biz/righttorepair.