THE REPAIRER CONUNDRUM ON REPAIR VERSUS REPLACE
Much has been said about damage quantification. It is almost a daily debate that estimators, along with assessors, discuss the outcomes of due more specifically to dictatorial enforcement, which may not always apply sound principle in regards to safety versus the cost of claim, to return the damaged vehicle to as similar condition as before the accident.
In the current deflated economy, the automotive market has taken a serious about turn in terms of available spend, but this shouldn’t ever compromise safety. The Motor Body Repair industry (MBRs) collaborate to ensure damage quantification of overall costs remains within a reasonable framework to prevent write-offs versus market value of the specific vehicle. It is a known conundrum that Insurers try to keep premium levels as low as possible to ensure active comprehensive policies and prevent cancellation at the high levels we see in the current economic climate.
Their actuaries must provide knowledge to change, and cognisance to these changes, in evaluating transparent premium setting or we may need to take the holistic view that a motor vehicle is a medium-term disposable asset and does not have a life term asset value with write-off thresholds that equate to at times as little as 50% of the market value. It is a fact that more and more vehicles are now being retained by consumers for longer periods of time. Market values show drastic devaluation and as such the vehicles hold a greater risk of not being allowed for restoration.
If an overview is taken on repair costs, the price of replacement parts far exceeds the so-called CPI inflationary increase, and based on research, shows inflation at around three times higher. For this specific reason we require OEM collaboration to motivate projects for “Save-a-car”. This would also assist in preventing poor quality alternate parts being introduced to the market where the distributors charge in the region of 70% of the cost of an original supply part. These parts used may often be to the detriment of safety of the consumer.
Due to the perceived high cost of repair there’s never been more pressure to think about the repair of parts rather than spending much more valuable liquidity on new parts. There is a balance however, and some vehicle manufacturers give explicit guidance, whilst others give blanket statements.
We are aware in some cases, that should for example there be a mag rim scratch of more than 12 mm, an OEM will not allow for repair but enforce replacement at a cost nearing R17 000 per rim. The other side of the coin is effective, safe and trustworthy repair, which could be done at a third of this cost. Better amicable outcomes will ensure greater sustainability to both OEMs and MBRs, as well as specialist repair facilities.
Further consideration should be given in regards to the local market law makers, who have not supported to a high degree, international change on green initiatives of “recycle and/or reuse” which can have a dramatic change to the cost per claim achieved. This should also encompass repair versus replace in instances where exclusion is assured for life and limb safety.
The MBR sector understand more modern and expensive vehicles have for some time carried things like RADAR modules just behind the bumper skin – at the front, the rear or both. In addition, if a vehicle has a bonnet that ‘pops-up’ during impact to reduce the severity of pedestrian injury, there will be sensors just behind the front bumper skin. If the bumper skin repair is not performed as per the guidelines, the systems will not work properly.
Unless a manufacturer mandate is to fit a new bumper skin regardless of damage, it is possible that a repair can be undertaken. Typically, this means repairing the areas not close to the location of the sensors, but can be restored as a reward through skill and equipment investment that provides huge saving over replacement cost percentage of the new replacement part. These features and more common Advanced Driver Assistance Systems are not explored in this editorial but require recognition, understanding, higher skill and related process times, which will have an impact on a final claim cost.
No one in the collision repair business wakes up each day to do a bad job, and with the correct training and knowledge, the MBRs are well equipped to do a brilliant job – keeping the future drivers and owners of a repaired vehicle safe. This article is designed to make us think – do we need to just throw away damaged parts like bumpers, or can we repair them? Hopefully you can see it is possible to repair, whilst respecting functional performance limits.
by Steve Kessel
