Continued Motor Parts and Repairs Delay

What is driving up the cost of motor claims?

A sudden and noticeable issue which has been hitting a range of industries is the motor supply chain chaos. It may take up to five months to get cars in your fleet repaired as the importation of manufactured parts has slowed to a halt.

But why is this happening, how could this affect you if it hasn’t already, and what do you need to do?

– 2023 UPDATE –

Over the last twelve months, the cost of living has dramatically increased. Supply chain issues are a contributing factor, as well as increased global demand, shipping costs and higher energy prices. As a result, these increases are influencing claims trends and driving up the overall cost of a claim.

Car parts are becoming ever more difficult to source. This has had a knock on effect on availbale hire cars as more workers are having to use hire crs for longer. Therefore, insurers, brokers and lenders are struggling to deliver on promises. With your patience, we hope to get through this busy period.

We investigate these contributing factors, how rising claims costs affect you, and what can be done to help cut costs.


What is driving up the cost of motor claims?

There are many compounding factors which have contributed to a claims cost increase:

The delay in the supply chain, alongside a significant delay on vehicle parts, has led to setbacks in car production and repairs. There is a global shortage of microchips and vehicle paints, as well as a smaller pool of hire cars available.

All claim types are integrally linked together, and if one sector is disproportionately affected, it can leek over into others. The construction industry has experiences issues in sourcing materials and labour, leading to increase property claims. COVID-19 absences are also hamstringing any progress suppliers are making to remedy the situation.

Suppliers and distributors are reassessing costs after two years of significant supply chain disruption, but this has recently been compounded by political actions. The war in Ukraine and resulting Russian sanctions has jumped up oil prices, meaning fuel is now much more expensive per mile. This goes hand in hand with the new Brexit regulations and a shortage of skilled eligible HGV drivers. Longer claims lifecycles are one of the conclusions and this has ultimately driven up claims costs.

One of the most significant reasons why claims costs have increased is because of the types of claims now being seen. Fewer low-impact claims are being reported due to reduced vehicle usage since the pandemic, however more commercial vehicle claims are being made, therefore raising the average claims cost.

Cars are also becoming more expensive and with more costly parts. The technological advancement of cars has come a long way, and as a consequence, cars are more quickly deemed a total loss due to the price of replacement. Workforces are also required to be more specialised to cater to these repairs, shrinking the pool of eligible garages and therefore raising prices.

Another factor in increased motor claims cost are the extreme weather events. The first quarter of 2022 saw the same number of weather-related claims as the whole of 2019. An influx of damage claims came as a result of flooding and trees falling. More claims means a tighter harder market.

Ultimately, many business’s ambition to go NetZero as well as new legislation on electric vehicles and green infrastructure could mean costs keep on rising. We are yet to see how the recent incline in cost of living will affect claims costs however we predict loss of earnings to be greater and claims lifecycles longer.


Why is there a delay on vehicle parts?

The manufacture of car parts from China, the United States, Thailand and Europe have been punctured with the rise of the COVID virus. Some factories are suspending production leading to a huge impact for British companies and fleets.

Parts coming from abroad are taking a lot longer, with parts from Germany being significantly affected. Delays at the ports are adding weeks to deliveries.

Brexit has also played a large role in the delay on vehicle parts. As companies still get to grips on the changing customs stipulations; deliveries, lorries and goods, and price protection schemes have all been negatively affected. Brexit uncertainty and the coronavirus pandemic saw a 29% decrease in car sales between 2019 and 2020.

These global reasons as well as the phase-out in favour of hybrids have caused individual vehicle parts to become a rarer commodity. Shortages are increasing which has also increased vehicle part delays. The issue is industry wide, so if you are negatively impacted by the recent issues, know you are not alone.

Why are car repairs taking longer?

Another issue many companies are finding is that they can’t get cars in their motor fleet repaired. The national staff shortages are affecting all industries including garages. The pandemic and the need to self-isolate means more and more workers are unable to work.

To authorise certain repairs, highly qualified engineers are required. If these individuals are off sick, it can potentially put a whole garage on hold for weeks. This then creates a overload in other garages.

Furthermore, as transport is deemed unsafe by the public due to the risk of virus transmission, more people are choosing to drive. This creates an increase of traffic and an increase of breakdowns.

Are there hire vehicle shortages?

More drivers means more cars. Hire cars are in great demand at the moments as all these issues with motor parts and repairs stack up. Hire companies themselves also have staff shortages due to COVID-19, meaning they cannot collect or drop off vehicles. Cleaning now needs to be more intensive rigorous and strict.

Shortages are also affecting car manufacturing. Computer chips for cars are causing chaos the world over through their necessity for rare minerals and metals. With there being less hire vehicles to source, companies are struggling to find temporary replacements for their fleet.

Romero Insurance Brokers Fleet Cover

If you are being affected, know that these issues are rife across the industry and you are not alone. A broker is an excellent way to get someone on your side to fight for you who knows and is keeping up to date with the situation.

At Romero Insurance Brokers, we have our own specialist network of repairers as well as a catalogue of hire providers. Through our connections and dedication we will ensure you are back to business as usual. We are better placed than most, and our fleet insurance services are second to none.

We also have a Romero Claims App which allows you to enter details of your accident or incident quickly and efficiently, immediately notifying our claims team. This super simple service allows you to pass your claim onto our dedicated team, who’ll handle it from start to finish.

Visit our motor vehicle and fleet insurance information for more on why it’s essential you are covered.

Fleet Insurance Services