News & Press Releases
Press Release
A note from CAA's Senior Engineer Mark Garnham on current market trends.
I can advise that we have seen a large number of repairers feeling the pressure in review of the current credit crunch.
It appears that with this in mind the number of repairers failing to survive is ever increasing with figures showing a 36% drop in the last decade to just 4,010 (Fleet news June 08) and dealer franchises being hit even harder resulting in a declined from 2,200 to 870 to date.
The same article states that while the UK car population has increased by 18% between 1998 and 2008 the amount of collision repairs has only increased by 1%.
Ever increasing demands by insurers including the use of a free courtesy car along with a free estimate, collection and delivery service. The cost of staff has risen in recent years with painters alone on an average of £11.97 per hour all play a vital part in reducing profit from the repairer, reducing there ability to survive in today’s market.
Training is now a large part of a body shops process in order to gain accredited status such as PAS 125 which is now being targeted as a “must have” to enable the repairer credibility when approaching new work suppliers.
The cost of gaining this status is estimated at approximately £30,000. All of the above could quite easily result in higher repair costs for both fault and non fault drivers.
Drivers are likely to wait longer before having their Vehicles repaired in the current climate, this combined with more advanced technology going into new Vehicle production will result in a large percentage of Vehicles being beyond economical repair or borderline total loss taking into consideration the rate of vehicle depreciation when they arrive at an affordable time to claim.
With the price of steel falling dramatically in recent weeks to as little as £10 per tonne in some cases, this will also take a knock on effect with salvage values over the coming months as the salvage agents are battling to see levels of return previously witnessed in 2002.
Fraudulent claims are also putting financial pressure on innocent policyholders at the time of renewal with the likes of “Cash for Crash”, “Staged Motor Thefts” and “Arson”. This can create further fraud where people are giving misrepresentation of details when applying for new policies in an event to bring the premium down.
