The annual ABP report has been published, which offers some useful insights for anyone in the motor claims sector.
About 79% of respondents say they now using recycled or green car parts as part of the repair process, that’s up from 57% in 2019. The primary reason for using pre-owned parts was the lack of availability on new spares however, which shows that supply chain issues are still disrupting the sector. 61% of those surveyed stated the reason they did not use more green parts was the patchy quality of them, which also suggests that industry wide agreed standards on recycled spares could be a good thing.
ADAS SYSTEMS
On modern cars there are lots of driver assistance gadgets and automated systems. These need testing and sign off before a repaired car can be given back to a policyholder, so it’s interesting to see that 41% of bodyshops do the calibration in-house. Around 37% said they outsource the work to a specialist company.
CLAIMS INFLATION
In terms of hourly rate about half of all bodyshops are charging over £40ph now, up from £32 in 2019 pre-pandemic. Some 14% are charging £55ph or more, and 28% thought that £60ph was a fair and realistic hourly rate. The biggest financial headache is energy costs and then a shortage of skilled labour. Neither of those issues is likely to be resolved anytime soon, so expect claims costs to rise.
INSURERS SEEN AS PENNY PINCHING
A general whizz through the verbatim comments section revealed familiar complaints that insurers don’t understand the trade and simply want cars repairing as cheaply as possible. Many pointed out that the collection and delivery of vehicles and things like cleaning cars before handover were essentially not being paid for. Invoice settlement above 30 days was defined as being unsustainable in the long run as bodyshop overheads like wages and energy bills rise dramatically. A lack of investment in apprenticeships and training was also a common theme.
IE NOTE
Your IE editor has worked part-time in body repair; flatting, sanding & prepping cars for paint back in the olden days when cellulose paints were legal. It was hard work, cold in winter and hot in summer. You stank of overspray by lunchtime. So did your lunch. Poor pay rates and lots of complaints from car owners who didn’t understand that new paint doesn’t look the same shade as faded 7 year old paint on a Ford Orion. So yes, I feel the pain from the ABP.
It’s also as true now as it was back then that most people who have been in an accident – even low speed – want a new car/write off settlement rather than the old one fixed. They don’t feel any repaired car is as safe as a non-damaged vehicle and so they often give their insurers a hard time over every aspect of the repair, courtesy car, storage arrangements, recycled parts and so on.
We can see a strong eco-friendly argument for repair of existing cars, rather than blowing millions of gallons of water, huge amounts of electricity, steel, plastics, lithium, cobalt, plus carbon use during manufacture and transportation of a new car. It’s greener to repair and refurbish the existing vehicle parc, than keep selling more new cars, no matter what the promoters of battery cars might say. But insurers need to partner with bodyshops, especially on the expert training and standards applied to ADAS calibration following repair. This is ultimately where the huge legal cases will arise if people die because automated braking, steering or warning systems did not work following an authorised repair.
We must set standards across the sector and invest in a skilled workforce. In the same way that the insurance industry contributes to IFED, which targets insurance fraud, it needs to co-fund repair shop and ADAS apprenticeships. Long term it is in the insurers interests to do so.
COPART COMMENT
Commenting on the ABP report, Jane Pocock CEO, Copart UK & Ireland said:
“With 79% of respondents stating that they have fitted green parts, Copart supports green parts moving into the mainstream as a viable solution for the sector. The report clearly demonstrates how seriously organisations in this sector are taking the climate crisis and committing to reduce, reuse, and recycle by adopting and supporting the growth of green parts as part of their wider ESG strategies.”
“As a key supplier we want to help all our customer groups access green parts and we are proud to be an enabler of the green parts revolution.”
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