Repair costs rise by a third... and are going to keep rising

A comprehensive report on the UK Car Body Repair Market has warned that a continued decline in repair capacity will lead to increased repair costs over the next five years.

The report, by indepemdent research company Trend Tracker, has said that insurance-related repair costs have already risen 33.5% since 2013.

As well as this, the number of UK accident repair centres has fallen by 20% over the last decade, and Trend Tracker predicts a further decline over the next few years.

These factors present a significant risk to motor insurers’ profits.

Mark Bull, director of Trend Tracker said: “With the number of bodyshops continuing to decline, it appears imperative that insurance companies and claims solutions providers adopt a strategy to truly work with their supply chain to secure repair capacity over the forthcoming years.

“It’s inevitable that repair costs will continue to rise but we believe that insurers need to act responsibly and focus their attention more on securing quality repair capacity for the safe repair of a vehicle and to provide the customer service aspects of a motor claim.”

Trend Tracker predicts a further 14% increase in insurance-related repair costs over the next half-decade, and Bull says that is a “conservative view.”

Given the above-inflation increase that has taken effect over the past five-years, we believe that 14% is a conservative uplift that may well be exceeded.

“However, such above-inflationary repair cost pressures cannot continue at current rates, despite parts pricing and paint price increases, as accident damaged cars may become subject to becoming economic write-offs if the repair cost becomes too great.”

The cost of parts alone on insurance-related repairs has risen by 40% in the past five years. New technologies in vehicle design, including Advanced Driver-Assistance Systems (ADAS), have had a bearing on driving up repair costs.

“This is why it’s critical for insurers to work with their body repair partners as it’s in everybody’s interest for bodyshops to attract and retain high calibre staff, ensuring that an insurer’s customer gets a safe repair,” Bull concluded.