What Are OEM Parts — and Why Does It Matter?

OEM stands for Original Equipment Manufacturer. OEM parts are components made by — or directly for — your vehicle's manufacturer to exact factory specifications. They're the same parts used to build your car on the assembly line. When you take your car to a dealership for repairs, they typically use OEM parts.

Aftermarket parts, by contrast, are produced by independent, third-party manufacturers. They're designed to fit and function like OEM parts but are not made by or for the original automaker. Quality varies significantly across aftermarket brands — some are nearly identical to OEM, while others use inferior materials that wear faster or don't fit as precisely.

OEM vs. Aftermarket Parts: Key Differences

For newer vehicles, the difference in fit and finish between OEM and lower-quality aftermarket parts can be noticeable — especially with body panels, lighting assemblies, and structural components. For older vehicles, reputable aftermarket brands often provide reliable performance at a fraction of the cost.

Why Insurers Default to Aftermarket Parts

Insurance companies are businesses, and repair costs are one of their largest expenses. Aftermarket parts can cost 30–50% less than OEM equivalents, which translates into dramatically lower claim payouts. Standard auto policies use language requiring repairs to restore your vehicle to "like kind and quality" — language that insurers interpret as permitting the use of functional aftermarket parts.

There's also a broader argument insurers make: lower repair costs help keep premiums down for all policyholders. While that's partially true, the consumer who just had their brand-new car repaired with mismatched panels tends to see it differently.

Key reasons insurers use aftermarket parts:

• Cost savings: Aftermarket parts are significantly cheaper, reducing per-claim costs
• "Like kind and quality" clauses: Standard policy language allows functionally equivalent alternatives
• Wide availability: Aftermarket parts are easier to source, speeding up repairs
• Competitive pricing pressure: Keeping claims costs low helps insurers stay price-competitive

You always have the option to request OEM parts, but without the endorsement, your insurer will typically only pay the aftermarket rate — leaving you to cover the price difference out of pocket. If you want to protect against that scenario, understanding your full policy options is the first step.

How Much Does OEM Parts Coverage Cost?

OEM parts coverage is one of the more affordable add-ons available, though costs vary by vehicle age, make, model, and location. On average, expect to pay:

• $5 to $20 per month ($60–$240 annually) for most vehicles
• Higher costs for luxury, electric, or high-value vehicles due to pricier OEM parts
• The endorsement requires that you already carry comprehensive and collision coverage

Insurers That Offer OEM Parts Endorsements

Not all insurers offer this coverage. Here's a breakdown of major providers that currently include OEM endorsement options:

Availability is typically limited to vehicles that are 10 years old or newer. For electric vehicles and luxury models, OEM coverage is especially important given the high cost and complexity of factory-specific components. If you drive a modified vehicle, you may also want to look into custom parts & equipment (CPE) coverage to protect aftermarket upgrades you've already installed.

Who Should Consider OEM Parts Coverage?

OEM coverage isn't necessarily for everyone — but for the right driver, it can be a genuinely worthwhile investment. Here's how to think about it:

Strong Candidates for OEM Coverage

New Car Owners

For a vehicle under three years old, repair quality matters enormously. Poor-fitting aftermarket panels or substandard components can affect your car's structural integrity and diminish its value when you go to sell. OEM coverage ensures your investment is protected from day one.

Luxury & High-Value Vehicles

The cost differential between OEM and aftermarket parts is far more pronounced on premium vehicles. A luxury automaker's bumper assembly or lighting system can cost significantly more from an aftermarket supplier — and quality inconsistencies are more visible. OEM coverage ensures repairs don't degrade your vehicle's premium appearance or performance.

Leased Vehicles

Many lease agreements require that all repairs be performed with OEM parts. Using aftermarket alternatives could violate your lease terms and result in additional fees at the end of the lease period.

Electric Vehicles (EVs)

EVs have highly specialized components — especially battery systems, sensors, and structural elements tied to safety systems. Using non-OEM parts on an EV can void manufacturer warranties and create serious safety risks. OEM coverage is a smart layer of protection for EV owners.

Impact on Resale Value

Using OEM parts in repairs helps preserve your vehicle's resale value by maintaining its original condition. Buyers — especially for newer and luxury vehicles — prefer cars with documented OEM repair histories and are willing to pay more for them. Poor-quality aftermarket parts can signal neglect, reduce buyer confidence, and lower trade-in offers.

That said, professionally installed, high-quality aftermarket parts on older vehicles have minimal impact on resale value, especially when well-documented. For vehicles over 7–10 years old, the financial case for OEM coverage becomes much weaker.

Frequently Asked Questions

Is OEM parts coverage worth it for a used car?

Generally, no — unless the used car is relatively new (within 3–5 years) and still under the manufacturer's warranty. For vehicles older than 7–10 years, OEM parts become increasingly difficult to source, and the cost of the endorsement may not be justified. High-quality aftermarket alternatives are typically sufficient for older vehicles, and many insurers won't even offer OEM endorsements on aging models.

Can I request OEM parts without purchasing the endorsement?

Yes, you can request OEM parts during the repair process, but your insurer will only pay the aftermarket equivalent cost. You'd be responsible for covering the price difference — which on some parts can be hundreds of dollars. If you consistently want OEM parts, purchasing the endorsement is a much more financially predictable approach.

Does OEM coverage affect my deductible?

No — your deductible remains the same regardless of whether you have an OEM endorsement. The endorsement simply determines which type of parts are used after your deductible is applied. The overall cost of the repair will be higher with OEM parts, but your out-of-pocket deductible amount doesn't change.

Will using aftermarket parts void my car's manufacturer warranty?

It can, in certain circumstances. Under the Magnuson-Moss Warranty Act, a manufacturer cannot void your entire warranty simply because you used aftermarket parts. However, if an aftermarket part causes a specific failure, the manufacturer can deny warranty coverage for that component or related systems. For warranty-sensitive repairs — especially on newer vehicles — OEM parts are the safer choice.

How do I add OEM parts coverage to my existing policy?

Contact your insurance provider directly to ask whether they offer an OEM endorsement. If they do, it can typically be added at your next renewal or mid-policy in many states. If your current insurer doesn't offer it — like Progressive for car owners — consider shopping around with Erie, Allstate, or American Family, which are consistently well-rated for OEM coverage options. You can also review all available OEM endorsement details to compare your options before making a switch.