Reassessing Used Spare Parts in OSAGO Repairs: Pilot, Risks, and Regulatory Debates

The discussion about using used spare parts to compensate insured OSAGO incidents was shared by Evgeny Ufimtsev, chief of the Association of Automobile Insurers of Russia and the All-Russian Association of Insurers. Izvestia reported his remarks. He noted that a pilot program could begin in Primorye in the first quarter of 2023 to test this approach.

Ufimtsev explained that regulatory documents and technical requirements would need three to six months to enable the use of used spare parts. He added that the authorities in Primorsky Territory would be contacted soon to permit testing of repairs with used parts on an individual basis as an experiment.

The RSA did not specify other regions in socialbites.ca. If the pilot proves successful, the plan is to extend the use of used spare parts within the OSAGO framework.

Ufimtsev stated that after evaluating the pilot, if drivers express satisfaction with repair quality and turnaround time, discussions would start on expanding the experiment to additional regions.

A source from Gazeta.ru said the insurers’ association was involved in the matter.

Primorsky Krai was chosen as the starting point because of a national practice of repairing used right-hand-drive foreign cars that are five to ten years old, as explained by the PCA. He noted that repairs with genuinely new parts are very costly and often impractical for older vehicles.

The idea did not gain support from the market regulator. The Central Bank told socialbites.ca that there is no clear, effective mechanism to ensure road safety when using used parts. It warned that using such parts without the victim’s consent could lead to more disputes over the parts’ quality and the overall replacement process. The Bank of Russia has issued a detailed position to the professional community and relevant ministries and departments.

The Phrasing That Traps

Insurers in 2018 pushed what was described as a repair reform. This reform updated the Federal Law On OSAGO to prioritize in-kind repair as the default method for compensating vehicle damage, meaning cars should be sent to a service contracted with the insurer, unless the owner requests cash compensation.

Today, only about one in ten damaged cars are sent for repairs in kind, while the majority of owners receive cash. Rosgosstrakh reported that its share of in-kind repairs remains a notable portion of losses, though it fluctuated in the past year and now sits slightly above overall market levels.

Rosgosstrakh’s press service confirmed these figures. The share of insurers providing in-kind repairs is expected to stay below ten percent prior to further guidance from the Central Bank and industry experts.

One-Track Mind

At the start of the year, the Central Bank included non-original spare parts in OSAGO loss calculations through a unified methodology used by all insurers to estimate damage. Maxim Kadakov, chief editor of Za Rulem, argues that incorporating used spare parts into the insurance listings could further reduce cash payments to car owners.

Kadakov suggested that many insurers rely on the cost of spare parts from dismantling operations, which can undermine repair costs for consumers. He warned that cash reimbursements have often fallen short of actual repair needs, even when genuine parts prices are lower. If repairs with used parts become standard, compensation could effectively shrink to a minimal amount.

Business Is Business

Using salvage parts from dismantling operations raises concerns for car service providers. Such parts are frequently traded on the market for cash, and it is unclear how records would be kept. Kadakov also noted that repairing with used parts would demand extra steps for cleaning and reassembly, potentially compromising repair quality.

Shifting to a regime where insurers push for used parts is seen by some as a long-prepared strategy to boost profits, Kadakov contended in a discussion with socialbites.ca’s national automotive association. He recalled a prior attempt to legislate such a norm during the 2017 repair reform, which faced strong resistance and was ultimately not adopted. Today, proponents argue that new parts repairs are used only sporadically by insurers.

The NAS vice president warned that adopting used parts for OSAGO could raise the risk of vehicle theft tied to later sale of components. There are no established criteria to assess the quality of remanufactured parts in Russia, and dismantling activities lack a clear regulatory framework, he explained. This leaves consumers exposed to potential theft and questionable parts quality under OSAGO coverage, according to Shaparin.

Warranty in Question

Legal consolidation of using used spare parts could affect warranty obligations for the vehicle. An automobile rights advocate noted that while the insurer bears responsibility for repair quality, it is unclear how this would operate when the remaining life of a used part is unknown. In such cases, the question of warranty limitation may arise and require resolution.