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Safety & Accident

Accident Management Costs Trend Upward

July 2008, Automotive Fleet - Cover Story

by Mike Antich & Lauren Colin

 

Fewer Cosmetic Repairs Seen

CCM has witnessed slight changes on the client side. “Many of our clients have no choice but to try and keep their drivers on the road as efficiently as possible. Regarding accident costs, we are seeing fewer cosmetic repairs, especially in service clients. Any repair involving safety-related items are ‘business as usual.’ We have seen more utilization of aftermarket and used parts,” said Martines of CCM.

Fleets are trying to reduce accident management costs by declining some of cosmetic repairs they had authorized previously, agreed Neuman of CEI.

“Many fleets are being more aggressive with reducing the types of repairs they make. As a result, we are having more conversations with fleets about which repairs can be safely left undone and which are necessary to restore the safety profile of the vehicle. Fleets are increasingly relying on our expertise to point out the difference,” said Wolford of CEI. “Paintless dent repair (PDR) has become mainstream as a way to reduce repair costs. Several years ago, perhaps only 25 percent of our clients would authorize PDR. Now I would say it’s about 75 percent.”

“The fact that the increase in repair expenditures is actually slight does not reflect the increasing complexities we are seeing in vehicles and repairs,” said CEI’s Brigidi. “To control costs, we have widened repair parameters with many customers in our portfolio to include use of recycled and aftermarket parts, PDR, and avoidance of minor repairs that do not affect the safe operation of the vehicle.”

Another factor CCM has experienced in the current stagnant U.S. economy is that companies are not freeing up money for vehicle acquisitions, choosing instead pay for repair costs most often dramatically lower than the expense of a new vehicle.

Hybrid Repairs More Costly

The growing fleet incorporation of hybrid and other alternative-powered vehicles is another factor in rising accident management costs. Alternate-fuel vehicles present unique repair challenges. Specialized and often unfamiliar repair methods must be used when handling driveline, suspension, and steering components of these vehicles. Repairs to hybrid electrical systems, in particular, have special handling procedures.

Hybrid vehicle repairs can be much more expensive if a crash impacts vulnerable areas — the left front location of the power converter and cooling system, and the rear where the batteries are stored. “Hybrid batteries cost between $2,900 and as much as $6,000 to replace,” reported Neuman.

Often-complex hybrid vehicle repairs require expertise and experience both at the shop and accident management company level, according to Brigidi.

“Accident management has become much more than management of the

repair process. Increasingly, customers are recognizing the power of data captured during the accident reporting process, and how much more powerful that data can become when combined with additional inputs such as driving habits, demographics, and MVR data,” said Brigidi.

“An accident management provider has to be as good at capturing accurate

data and skilled in the useful ‘crunching’ of that data as it is at managing the costs of a repair,” he added.

“The executive review process of delivering not only cost data, but data surrounding accidents themselves has allowed us to deliver savings to customers through changes and additions to their driver safety policies, the effective delivery of online and behind-the-wheel training, adjustments to their selectors, and several other facets of the fleet program. Savings through prevention have proven five to 10 times more than savings extracted through the repair process,” said Brigidi.

“By bundling accident and safety programs with a provider that has scale and experience in managing repair and rental costs while delivering on subrogation opportunities, and in delivering driver safety solutions efficiently and effectively allows for the extraction of savings from both the management of the incident and the prevention of future incidents,” said Brigidi.

Comments

  1. 1. Mike Hernandez [ March 23, 2014 @ 08:50AM ]

    Excellent article, important to complete hybrid collision repair & cost research.

    Thank you. mike

 

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