Annual Accident Management Survey
With accident costs rising slightly over 2012 figures, fleet managers are utilizing more safety technology and instituting driver eduction programs to help increase driver safety and mitigate rising costs.
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Accidents are an unfortunate part of driving, with an average of 21 percent of fleet vehicles involved in some form of crash each year, according to data from several accident management companies.
Accident costs increased marginally in 2012 over 2011 figures. Some of the factors contributing to the increase included inflation, increased use of all-electric and hybrid vehicles, increased contenting of in-vehicle technology, and rising parts and fuel costs.
As adoption rates of all-electric and hybrid vehicles increase, their higher overall repair costs will continue to have an impact on overall averages.
“We do see significantly higher repair costs for all-electric and hybrid vehicles than conventionally powered vehicles for the same types of damage.
For electric vehicles, the average collision repair is around $1,000 higher, and between $300 and $500 more for hybrid vehicles, even if the battery isn’t damaged. Replacement batteries alone can cost thousands of dollars,” said Greg Neuman, supervisor, quality control for CEI, Inc.
Fleets Still Budget Conscious
The 2008 economic downturn is still being felt today, but surprisingly it’s more the fact that certain beneficial processes instituted during the crisis are still being utilized today.
“While the economy is slowly improving, the money-saving practices implemented during the height of the recession remain in place. Fleet managers are working with tighter budgets and continue to be frugal with repairs. They are highly selective as to what repairs are made since there is a sustained focus on the bottom line,” said Eliot Bensel, director, vehicle accident services and risk safety for PHH Arval.
Stuart Braun, adjuster and maintenance manager for Fleet Response also sees fleet managers being more selective about what they are willing to repair.
“We are seeing fewer cosmetic repairs and more total losses. Some fleets find it more economical to total a vehicle and replace it,” he said.
Bob Martines, president and CEO of Corporate Claims Management (CCM), sees shop owners becoming more conscious of their own profitability.
“Shop owners/managers are willing to ‘hold the line’ on labor increases, which has contributed to lower overall costs,” he noted. “Depending who you speak to, the state of the economy is a toss-up. The shop owners I speak with are not booking business two or three weeks out like in the past; now it is weekly at best. Other than natural disasters when there is a surge in repair work, the new normal is week-to-week in regards to getting business into a shop.”
This budget-consciousness is impacting cosmetic repairs, as well.
“The trend of fleet and operations managers declining to make minor or cosmetic repairs continues. These types of repairs often go unmade to help reduce clients’ physical damage spend,” said Bensel of PHH Arval.
However, this depends on whether the fleet is more “image conscious” or not.
“Some cosmetic repairs, depending on the actual appearance of the vehicle, are still being performed on vehicles where the company image is important,” said Bruce Stewart, claims adjustor/appraiser for CCM.
The bottom line for most fleets when determining what to repair is the ultimate resale value.
“There are still certain clients that are forgoing cosmetic repairs due to the soft economy; other clients are asking the question: Can we recover the cost through subrogation for a cosmetic repair, or can werecoup the costs when we term and remarket these vehicles?” noted Braun of Fleet Response.