“Following claims that a surge in the price of second-hand cars is driving up the cost of accident repair claims, the NBRA agrees that there is a danger that some insurers may not recognise this fact, and instead will simply think that repairers are charging too much”, comments Chris Weeks, Director of the National Body Repair Association (NBRA), the leading trade association for car body repairers in the UK.
Earlier this week, insurance provider Direct Line* said that inflation was slightly above its expected range of 3% to 5%, mainly because of the rise in the cost of second-hand vehicles.
The supply of new cars has been severely restricted by the shortage of computer chips for components, driving up demand for used cars. Customers in accidents where the car is a write-off are paid out according to its market value. Whilst payouts were therefore higher, the insurance company said it had been able to mitigate the impact by using its in-house vehicle repair operation.
Chris Weeks continued, “There is a real possibility that insurers will try to counteract the inflation they are seeing, which is entirely out of the control of repairers by trying to reduce repairer margins even further.
“We would urge insurers to absorb this change themselves by altering premiums, rather than trying to offset the cost by squeezing the supply chain further than it already has done.”
*Direct Line warns second-hand car price surge is inflating accident claims
