Trend Tracker: Car Accident Repairs Take Severe Knock

car repair shop

LONDON--December 11, 2012: An estimated 4.55 million car body repairs will be carried out in 2012, down 22% from a peak of 5.81 million in 2006, thanks partly to high fuel prices causing a decline in car use.

“This trend is of concern, as it may mean that some cars are being unprofessionally repaired and may be dangerous.”

Research by Trend Tracker, an automotive research company, in its biennial report1 on the car body repair market, shows that average annual car mileage has fallen 6% from 8,770 miles in 2006 to 8,240 in 2011. Over the same period, the number of insurance claims reported to car insurers as a proportion of all cars insured - known as the "claims frequency" - has fallen from 18.0% to 13.9%.

In 2012 insurance companies are estimated to have paid for 2.01 million car body repairs2, 27% fewer than the 2.75 million repairs they paid for in 2006. Yet the Trend Tracker research shows that despite that fall, average private motor premiums have risen by 24%, from 349 in 2006 to an estimated 434 in 2012, due, insurers argue, to rising claims costs.

A recent OFT (Office of Fair Trading) enquiry acknowledged the rising cost of personal injury claims, as a contributing factor to rising premiums, but also that the rising costs of third party (non fault) accident repair claims, including credit vehicle hire and inflated non-fault third party repair costs were also a significant factor contributing to higher premiums.

Facing higher premiums and other financial pressures, motorists have increasingly opted for higher voluntary excesses on their insurance policies. These reduce premiums, but make motorists liable for a sometimes hard-to-afford proportion of the cost of any accident repairs. For example, a not-uncommon 500 insurance excess represents nearly 40% of this year's average accident repair cost of 1,297.

In many instances where accident damage is not severe or the car is still driveable, policyholders with high excesses have opted not to have their car repaired, or have sought cheaper alternative repairs. Trend Tracker's lead analyst Robert Macnab says, "This trend is of concern, as it may mean that some cars are being unprofessionally repaired and may be dangerous."

A hitherto growth segment of the repair market had been so-called SMART (Small to Medium Area Repair Techniques) repairs. Much lower in average cost than conventional bodyshop repairs comprising mainly minor dents and scratches, demand for SMART repairs grew strongly to reach 1.49 million in 2007. However, pressure on motorists' pockets resulted in demand falling for SMART repairs to an estimated 1.16 million in 2012.

1The Future of the UK Car Body Repair Market 2012-2017 was published in November 2012 by Trend Tracker Ltd (Trend Tracker). It is aimed at companies active in the car body repair sector - vehicle manufacturers, insurers, investors, advisers, operators, suppliers - and comes as an electronic PDF with a hard copy, and an executive summary PowerPoint, priced at 1,250 +VAT.

2The figure represented 44% of the total market, the remainder comprising repairs to fleet and company cars (27%) and trade and privately-funded repairs (29%).

The Future of the UK Car Body Repair Market 2012-2017 is the latest biennial bodyshop report in the MFBI/Trend Tracker series first launched in 1993.

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