Persuading insurers to use car repair scheme an 'uphill battle'
A fresh attempt is being made to urge insurers to join a pilot scheme for using recycled parts to repair vehicles.
The British Vehicle Salvage Federation (BVSF) launched the scheme last August, but the federation's chairman has admitted that persuading the insurance industry to back the scheme was an "uphill battle", despite claims it could save the industry £200m
The scheme would give policyholders the option of repairing their vehicles with recycled parts supplied by BVSF members.
But it has already been snubbed by Norwich Union (NU) and Royal Bank of Scotland Insurance (RBSI) (News, 3 August 2006).
BVSF chairman Alan Greenouff insisted that the scheme was not a failure. He said despite the "time being right" for the use of recycled parts, persuading both insurers and consumers was "an uphill battle".
He said that repairers might have to be incentivised at the insurers' expense, and there were still logistical issues to be resolved.
"We want to be satisfied it works before we open it up to the market," he added.
A previous attempt to start a similar scheme collapsed after a few months due to lack of support from repairers and policyholders (News, 1 December 2005).
The news came as Allianz Cornhill announced that its own recycled parts scheme had been successful.
Policyholders who took part in the scheme, which began last October, gave positive feedback and the safety of vehicles was not compromised, the insurer said.
The insurer admitted that the pilot had experienced an uptake of only 25%, but it insisted attitudes were changing.
Dan Loosely, Allianz Cornhill motor damage claims manager, said that the project proved that recycled parts could be cost effective for the repairer and the insurer. For a £1,000 claim, on average £240 was saved by using recycled parts, he said.
But other insurers remain unconvinced of the benefits of using recycled parts.
An RBSI spokesman said: "We have not been able to provide a recycled parts solution that would not compromise the quality of repairs."
An NU spokesman said: "We're not seeing the appetite, or the potential, for financial savings."
