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Category:
Insurance
News /
Short Term
Insurance /
Mutual &
Federal
/ Feb. '07
Pressure on car repair costs to
continue in 2007
Increasing the
temptation among consumers to opt for non-approved parts.
Pressure on the already high cost of automotive repair can be
expected to continue in 2007. The consumer alert has been sounded by
leading short-term insurer Mutual & Federal.
Keith Kennedy, Executive General Manager Claims at Mutual & Federal,
commented: “We are aware of public concern over the rising cost of
vehicle repair. Unfortunately, the growing number of imports on our
roads and the import content in locally manufactured models means
the automotive repair sector will remain vulnerable to cost
pressures.”
The insurer is concerned that one effect of rising costs could be to
widen the pricing differential between pirate parts and
manufacturer-approved components – increasing the temptation among
consumers to opt for non-approved parts.
Kennedy added: “We urge all vehicle owners to resist this
temptation. Pirate-part fitment is not an appropriate response. The
safety of the driver, his family and other road-users could be
endangered by fitting pirate parts.
“In addition, the use of OE (Original Equipment) or
manufacturer-approved parts is mandatory for warranty purposes. A
vehicle owner can invalidate his warranty protection, turning a
supposedly cheap option into a very expensive exercise.
“In a pricing environment such as this, all players in the market –
insurers, motor manufacturers and the automotive repair industry –
have a duty to alert consumers to the possible risks of pirate-part
fitment.”
Mutual & Federal has given an insurance industry lead by drawing
consumer attention to the impact of motor marketing trends on
automotive repair costs.
In recent years, there has been an influx of imported vehicles. It
is estimated that 48 makes and more than 1 200 models are now
locally available.
The effect on repair bills was spotlighted by a recent underwriting
calculation at Mutual & Federal involving parts ‘baskets’ needed to
complete repairs after various types of collision.
One comparison showed that costs for a local vehicle in the R110 000
to R140 000 price range could reach R28 435 versus R34 653 for an
import. The differential increased in the R141 000 to R170 000 range
– R21 062 versus R46 672.
New technology and advanced features also affected repair costs.
A single airbag replacement, including the various components, may
cost up to R25 000 to R30 000 for a luxury vehicle. For an entry
level vehicle a single airbag replacement may be between R3000 and
R6000.
Some luxury vehicles have up to 48 different onboard computers for
the various electronic systems. Rain sensors and digital displays
are driving up the average cost of windscreen replacement.
The latest automotive development – front bumper-mounted sensors –
could have a major impact on the cost of a ‘bumper-bashing’.
Keith Kennedy noted: “A range of macro-economic, social and
automotive industry trends are having an effect on vehicle repair
costs. The public can accept our assurance that we are as concerned
as they are.
“We are currently examining possible solutions that respect the need
for quality repair while trying to combat pricing pressures.
“We will do everything possible to assure value-for-money for our
policyholders. But we repeat our alert to the cost-sensitive
consumer – the cheap option or the backyard repair solution can be
easy on your pocket today and disastrous tomorrow. Please don’t do
it.”
Source: ITInews – Insurance
Times and Investments Online
www.itinews.co.za
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