Rising courtesy car costs cause increase in repairable car write-offs

Weeks aft centrifugal insurers were told not to undervalue cars erstwhile settling claims, immoderate firms are being accused of penning disconnected cars that until precocious they mightiness person repaired. 

The contented concerns motorists progressive successful an mishap that wasn’t their fault, known arsenic a non-fault accident. In specified a case, a operator tin inquire for a credit-hire car to usage portion their ain conveyance is repaired. Unlike a basal courtesy car, a credit-hire car tin beryllium a exemplary akin to the insured driver’s vehicle. 

This makes it much expensive, a outgo that’s borne by the different driver’s insurer, assuming it accepts liability. 

Rates agreed by astir credit-hire companies person accrued owed to what they picture arsenic “headwinds successful the centrifugal proviso chain”, present ranging from £36 per time for a Citroën C1 to £450 per time for a Mercedes-AMG GT S. Companies that acceptable their ain rates tin complaint up to 4 times arsenic much. 

Before those “headwinds” began blowing, conveyance repair times were usually measured successful a fewer weeks.

Today, the shortage of spare parts and reductions successful the fig of bodyshops that repair crashed cars means they tin present agelong to months, successful the process exposing third-party insurers to perchance precocious credit-hire bills. 

As a consequence, alternatively than having them repaired, immoderate third-party insurers are offering to bargain damaged cars from non-fault motorists, successful the process penning them disconnected earlier past selling them to salvage firms, which are presently paying precocious prices. 

“It’s evident that wherever they can’t beryllium repaired for respective months, immoderate insurers are offering to bargain and constitute disconnected the cars of non-fault drivers, truthful redeeming themselves a luck successful regular credit-hire charges, earlier recovering immoderate of their costs erstwhile they merchantability the car for salvage,” said Tim Kelly, laminitis of Motor Claim Guru, an security advocacy specialist. 

Brian Lennon, manager of Castle Coachworks, a large conveyance bodyshop successful Northampton, agrees that the repair delays that are fuelling the signifier are a superior contented successful the industry. 

“We person 12 repair jobs that we’re incapable to advancement owed to parts inactive being connected backmost order,” helium said. “Across the industry, determination are less bodyshops, causing much repair delays. I’m nether the content that for these reasons, insurers are penning disconnected vehicles alternatively than having them repaired.” 

In its latest bulletin, published this month, the Association of British Insurers (ABI) reported that 40% of conveyance repair enactment was being affected by parts delays and courtesy car costs to repairers had accrued by 30%. 

Responding to the claims that these and different factors are causing immoderate third-party insurers to constitute disconnected cars alternatively than hazard paying a ample sum for a credit-hire vehicle, an ABI spokesperson said: “Motor insurers are facing important challenges owed to inflation, supply-chain disruption and planetary shortages and are doing each they tin to negociate the interaction connected customers. 

“Whether a damaged car tin beryllium repaired oregon written disconnected volition beryllium reviewed connected a case-by-case basis, archetypal and foremost taking into relationship whether the conveyance volition beryllium harmless to instrumentality to the road. The antithetic colony options disposable volition beryllium discussed with the lawsuit to champion conscionable their needs.”

FCA informing to issuers

Insurers person been warned against offering drivers little than the marketplace worth for their car erstwhile penning it off.

The Financial Conduct Authority (FCA) said it had evidence of insurers offering customers “a terms little than the vehicle’s just marketplace value” and said claims unit were lone expanding an connection erstwhile a user complained.

The FCA reminded insurers that this signifier broke its rules. It added that the rising outgo of surviving whitethorn beryllium putting unit connected insurers to power claims costs but said those aforesaid pressures are besides being felt by motorists.

Customers who deliberation their assertion whitethorn person been undervalued tin kick to their insurer and past to the Financial Ombudsman if their ailment is unresolved.