When your car is damaged in an accident, the decision to repair it—or declare it a total loss—hinges on cost. But what many drivers don’t realize is that insurers often use aftermarket parts to bring those costs down. This tactic can tip the scales, preventing a total loss designation and reducing your payout.
In this article, you’ll learn how this works, why it matters, what your rights are regarding parts used in repairs, and how to protect your claim from unfair devaluation.
Understanding the Total Loss Evaluation Process
Before declaring a vehicle a total loss, insurance companies weigh the cost of repairs against the car’s Actual Cash Value (ACV). If repairs exceed a certain percentage of that value (usually around 70–80%, depending on your state), the car is deemed a total loss.
But here’s where it gets tricky: that repair cost is flexible. It depends on the parts, labor rates, and repair method the insurer uses in the estimate. By defaulting to aftermarket parts—cheaper than OEM (original equipment manufacturer) ones—insurers can lower the estimate just enough to avoid a total loss classification.
What Are Aftermarket Parts and Why Do Insurers Prefer Them?
Aftermarket parts are replacements made by third-party manufacturers rather than the vehicle’s original automaker. While many function adequately, they’re not identical to OEM parts in quality, fit, or performance.
Insurers like aftermarket parts because:
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They’re cheaper, often 30–60% less than OEM.
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They reduce overall repair costs, which impacts the total loss calculation.
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Using them preserves the insurer’s bottom line, especially across thousands of claims.
The downside? These parts can lower your car’s value—especially if you plan to sell or trade it in later. And if your policy doesn’t mandate OEM parts, you might not even be told about the substitution unless you ask.
How Aftermarket Parts Can Affect Your Payout
The use of aftermarket parts has a direct effect on your repair estimate and diminished value. If the insurer says your repairs will cost $6,000 using aftermarket parts instead of $8,500 with OEM, your car might not qualify as a total loss—even though the damage is severe.
That means:
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You may get stuck with a repaired car that’s worth less on the market.
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The insurer avoids paying you the full ACV.
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Your diminished value claim could be reduced, since the quality of parts impacts resale.
In total loss cases, some insurers even factor aftermarket pricing into ACV negotiations, arguing your car is cheaper to repair than it truly is—slashing your settlement unfairly.
What the Law Says About Aftermarket Parts
Insurance regulations on aftermarket parts vary from state to state. A few key facts:
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Some states (like California and Texas) require insurers to disclose if they’re using aftermarket parts and let policyholders demand OEM equivalents (at a cost).
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Other states allow non-OEM parts freely, so long as they’re labeled “equal to OEM.”
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In legal precedent, cases like Avery v. State Farm exposed how aftermarket parts can fail to meet safety and quality standards, leading to backlash against their widespread use.
Knowing your state’s laws helps you challenge unauthorized or inappropriate part substitutions that could affect your claim.
How to Push Back and Protect Your Total Loss Settlement
If your insurer insists on using aftermarket parts or denies a total loss status based on lowered repair costs, you have options:
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Ask for an estimate using OEM parts and compare the outcome.
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Get an independent appraisal from a trusted collision expert.
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Review your policy—some premium plans allow for OEM-only repairs.
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Document everything and communicate in writing if you suspect lowball tactics.
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Consider filing a complaint with your state’s Department of Insurance if negotiations stall.
In many cases, simply asking for transparency and showing that you understand your rights is enough to shift the conversation—and your payout.
Final Thoughts: Know What You’re Really Getting Paid For
Aftermarket parts may look like a small detail, but they can significantly alter the outcome of your total loss or repair claim. If you’re not careful, the insurer’s “cost savings” come directly from your pocket—by reducing your vehicle’s value or denying a total loss payout you might otherwise deserve.
By understanding how these parts are used and standing your ground when necessary, you’ll protect both your vehicle’s resale value and your financial recovery after an accident.
