Federal Law Favors Remanufactured Parts in Government Vehicles

Legislators are always looking for ways to streamline government spending without interfering with services. The federal government's latest cost cutting measure encourages federal agencies to use remanufactured parts to repair government vehicles. But the bill could spell trouble for consumers who buy used cars.

Michigan's junior Senator, Gary Peters, is proud that his first sponsored bill has been signed into law. On October 7, 2015, President Obama signed the Federal Vehicle Repair Cost Savings Act, a bill designed to save the federal government money when it repairs its vehicles.

That's no small expense. Every year federal government agencies spend nearly $1 billion to repair and maintain its 588,000 vehicles. Because remanufactured parts often cost less than their new counterparts, Peters and his fellow legislators hope to save the government money. MiBiz.com reported Peters' statement regarding the bill:

“I’m proud that the first bill I introduced in the Senate has been signed into law by the President. . . . This commonsense, bipartisan law will help reduce wasteful spending and support Michigan’s growing remanufacturing industry.”

The Federal Vehicle Repair Cost Savings Act does what it can to ensure the parts used are high quality. The act defines “remanufactured parts” as:

“[A] vehicle component (including an engine, transmission, alternator, starter, turbocharger, steering, or suspension component) that has been returned to same-as-new, or better, condition and performance by a standardized industrial process that incorporates technical specifications (including engineering, quality, and testing standards) to yield fully warranted products.”

The law also says remanufactured parts should not be used if doing so “does not reduce the cost of maintaining Federal vehicles” or “lowers the quality of vehicle performance.”

But government savings could still come at the cost of safety and warranties, especially in the used car market. Over time, federal vehicles containing remanufactured parts will make their way onto the used car market. But whatever warranties are available on those parts won't necessarily transfer with them. Just by using remanufactured parts, federal agencies may be voiding manufacturers' warranties on these vehicles, making it harder for consumers on the secondary market to protect themselves from factory defects.

The challenge isn't just in using high quality remanufactured parts. After-market installations create loopholes for auto manufactures to point to in defending against consumer protection cases. The manufacturers will claim the remanufactured parts caused whatever defects occurred, even when those parts are entirely safe.

There is nothing wrong with saving government agencies money, but it should not do so in ways that put consumers at risk. Without stronger consumer protections on after-market vehicle parts, the Federal Vehicle Repair Cost Savings Act could have an unintended consequence of hurting used car drivers.

Dani K. Liblang is a lemon law lawyer at The Liblang Law Firm, P.C., in Birmingham, Michigan. She represents consumers injured due to manufacturing defects. If you or someone you know has been injured by a defective vehicle, contact The Liblang Law Firm, P.C., today for a free consultation.