Accident Management Cost Trends in 2009
Many fleets in 2009 chose to forego cosmetic repairs, increase use of aftermarket parts, and focus on proactive accident management to control costs.
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In 2009, several trends in managing accident management costs emerged. Fleets across the country are working with accident management providers to mitigate the impact of increased in-vehicle technology, alternative-fuel models, and environmental regulation compliance.
Increased Technology Impacts Accident Management Costs
As vehicles become more advanced, some technologies, which were originally only offered in higher-end luxury vehicles, become more prevalent in lower-end vehicles, according to PHH Vehicle Accident Services.
"This technology can add cost to re-pairs, so fleets may see higher accident repair costs as the technology spreads to more and more vehicles throughout the fleet," said Eliot Bensel, director, PHH Vehicle Accident Services.
In addition, PHH is seeing costs increase because more vehicles demand a higher level of knowledge from body shop technicians, "so the shop can't repair it or get parts for it as well as the dealership can," said Bensel.
For example, alternative-fuel or hybrid vehicles, supplemental restraint systems, active suspension systems, and other onboard technologies and electronics, require more complex repairs, explained Bensel.
"In addition, some of the newer design structures use special alloys and reinforcement systems designed to better protect the occupants," he continued. "The specialized metals and design characteristics require very specific repair methods, tools, and equipment. These things all require a higher level of training of the technicians and a higher expenditure on overhead."
Also increasing costs, "is the continuous need for compliance with environmental regulations, including the refinish costs, as paint manufacturers have to pass that added cost of environmental compliance in their products down to the body shop," said Bensel.
Fleet Response reports a significant trend in increased client consideration of alternative parts such as LKQ or aftermarket.
"In the past, we had many clients prefer to only use original manufacturer's equipment when repairing a damaged vehicle in their fleet, but when they see the cost savings, they are definitely re-thinking that mindset and electing to use aftermarket parts," said Stuart Braun, adjuster and maintenance supervisor for Fleet Response.
Bob Martines, president and CEO of Corporate Claims Management (CCM) noted, "more evident is the attempt to reduce accidents in general through more aggressive proactive safety programs, in-vestments in more high-tech GPS tracking, and holding drivers more accountable."