Vehicles manufactured today are vastly different from their predecessors manufactured only a few years ago. As a result, fleet managers face entirely new challenges when handling car damage repairs in their fleet; and dealing with higher repair costs is one of them. Fixico’s data shows that between 2016 and 2019, the average repair costs of one-year-old vehicles have increased by 29%
This article, based on our whitepaper: 'How fleets can reduce costs by allocating repairs more accurately', highlights some of the reasons behind the increase in repair costs and shares some practical tips on how fleet managers can turn the tide.
Why automotive developments have led to higher repair costs
The automotive industry is developing at a rapid pace; vehicles are more unique than ever before, and most cars are built with a different mixture of lightweight materials, include advanced driver assistance systems, and some even run entirely on electricity.
Let’s take a closer look at these different factors and find out how they affect repair costs.
Traditionally, a car’s bodywork used to be exclusively made of iron or steel sheet metal. Now, each vehicle contains a different mixture of lightweight composite materials, such as high-strength steel and aluminium alloys. The costs of repairing or replacing lightweight materials are higher compared to iron or steel sheet metal. This is because of the relatively high raw material prices and manufacturing costs.
Advanced driver assistance systems
While ADAS are very useful in keeping traffic participants safe and sound, repairing parts that include ADAS hardware are often more complicated and expensive. This is due to the technology behind ADAS and the special components that house the sensors. Bumpers, for example, can house a variety of ADAS, such as parking sensors or collision avoidance. Fixico’s data shows that between 2016 and 2019, the average cost of bumper repairs on a vehicle with ADAS, was 44% more expensive than that on a vehicle without ADAS.
Statistics gathered from several large repair chains in the Netherlands and Belgium indicate that repairs of electric vehicles (EVs) are on average 30% more costly than repairs of conventional ones. This is because EVs are more dependent on lightweight materials, often include ADAS, and house an expensive (and potentially dangerous) battery, which is quite likely to get damaged and costly to disassemble, repair or replace.
OEMs are making exclusive components with every new edition they release, and in doing so, increase the need for repairers to use original (more expensive) parts. Each vehicle is built uniquely, using a variety of materials and including different technology. Even parts as small as screws can vary. When repairing a relatively new vehicle, body repair shops can no longer rely on a third-party aftermarket part to fit the vehicle perfectly or be compatible with a potential ADAS.
How fleet managers can turn it around
Traditionally, fleet managers allocate repairs in a personal network of repairers or by using the services of repair chains. This method has always gotten the job done; fleet managers could trust that the vehicle would be repaired according to the required standards and paid a fair price. But now that every vehicle is getting more and more unique and new advancements are continuously adding layers of complexity, the repair handling processes in place no longer match today's needs.
Below we've added three steps fleet managers can take to adapt their repair handling methods and start reducing costs.
1. Apply an individual handling approach
When handling car damage, fleet managers can benefit by knowing the technical specifications of the vehicles in their fleet. Questions like: Is the vehicle electric?; Does the damaged part contain ADAS sensors, and is it made of (or does it contain) lightweight materials?; are getting more and more relevant.
When fleet managers have this information at the ready, they can decide which body repair shops are capable of repairing the vehicle in the first place. Depending on the specific damage, make and model, or a combination of both, this answer might differ.
2. Know the capabilities of the repairer network
Repairers who are specialised in certain materials, makes or repair methods can often perform repairs more efficiently than those who are not. For example: If a fleet manager handles the damage of an aluminium bumper and knows a nearby shop that is specialised in repairing aluminium material, then the repair-cost could be a lot lower when this repair is allocated to this body repair shop directly.
Even if this shop might charge a higher hourly rate than others, they are probably also able to work a lot more efficiently than a shop that isn't specialised. In which case, that shop will most likely have to bill more hours, replace instead of repair, or rely on outsourcing to get the job done; all leading to...higher costs.
Of course, when more body repair shops in the fleet's repairer network are capable of repairing aluminium material, it can become very beneficial for the fleet manager to compare offers. What if one of them is available sooner, can repair faster, or simply offers a better price?
3. Integrate a suitable digital solution
Leveraging the expertise in a repairer network and comparing different options is a great way to lower repair costs for fleets. But you can imagine that this can become quite challenging quickly, without the help of technology; especially when managing a large, diverse, or mobile fleet.
What if you could allocate each repair to the optimal body repair shop, no matter the location in which the damage has occurred? What if you could base your selection on the most important criteria for your business (or your driver) at that moment in time? Today, there is technology available that allows fleet managers to do just that.
At Fixico, we allocate each repair based on its specific requirements. We can ensure that every repair ends up in a workshop that is not only best equipped to perform the repair but also has the optimal conditions. Our data shows that in the last year alone, fleets that have used Fixico's platform have reduced their total repair costs with 28.4%.
Fixico is Europe’s leading digital car repair management platform. On a mission to reshape the industry’s ecosystem, Fixico connects drivers, businesses, and body repair shops in entirely new ways. Its digital expertise and pioneering approach improve the repair handling process from every perspective; drivers experience an effortless repair journey, businesses increase operational efficiency, and body repair shops optimise their workshop utilisation. Fixico gives access to a marketplace with a network of over 2,000 body repair shops across six countries. A group of world-class investors backs Fixico, and its services are trusted by more than 100 leading fleet-, lease-, rental- and insurance companies.