Britain's accident repair industry is crying out for change claiming that
insurance companies are turning the screws too tightly on bodyshops. Claiming
that the industry is in a terminal decline, the Bodyshop Owners Fellowship is
attempting to highlight the conditions which insurance companies are imposing
upon independent bodyshops.
Peter Warrilow co-founder of The Fellowship commented "The situation
is close to critical and a severe winter, resulting in a greatly increased
number of road accidents, would in all probability plunge the industry into
meltdown."
To illustrate their argument, the Bodyshop Owners Fellowship highlights some
interesting facts...
- Policyholders who enjoy free courtesy cars believe they are funded by
their insurer. They are not. Bodyshops are required to pay for them and lend
them out free of charge to customers.
- Policyholders think their insurers pay for vehicles to be cleaned
following repair. In fact the bodyshops must do this for free – and have
to employ staff to do it.
- Bodyshops often have to collect and deliver customers’ vehicles, even
outside of working hours, as well as provide roadside recovery. Bodyshops
must supply or sub-contract these services to insurance customers free of
charge.
- Many insurance companies require their approved repairers to give them a
percentage discount off the invoice ‘bottom line’. Even a 7.5 per cent
discount can reduce the repairer’s gross profit margin by up to a third.
- Insurance companies dictate how much bodyshops get paid. Electronic
estimating rigidly controls the hours per job. Bodyshops first have to buy
this estimating equipment and then, in many cases, have to pay a fee each
time it is used. A small bodyshop doing just 15 estimates per week could
face an annual bill in excess of £7,000.
- Average hourly discounted labour rates have hardly altered for 8 years,
staying at around £20 an hour in many cases. Rates such as these inhibit
meaningful wage structures and make it difficult or impossible to attract
new recruits into the industry. A youngster can earn more as a supermarket
shelf stacker.
- Although customers have the legal right to select the bodyshop of their
choice, those attempting to go outside of the insurance company’s approved
network may find their efforts thwarted. One customer was told that his £75
excess payment would double if he took his repair away from an approved
repairer.
You'd think that the cost of repairing your car would constitute the major
element of an accident claim, but with increasing numbers of people claiming
compensation for personal injuries, the car repairs are becoming almost
incidental. Peter Woodhouse, co-founder of the Bodyshop Owners Fellowship added,
"As the cost of repairing vehicles represents a small percentage of most
accident claims, it is totally disproportional for insurance companies to spend
so much time and effort trying to drive down repair costs."
A change in industry thinking seems on the cards or more bodyshops will soon
find it uneconomical to do insurance repairs.
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