Clients often ask us how their accident rates and costs compare to market averages. Though insurance companies generally don’t share this type of data, Crash Management does track and analyse incident statistics for fleet customers and can offer some insights. Results are surprisingly variable and can be influenced by a range of factors including annual mileage, geographic range, and of course driver-dedicated vehicles versus pool cars.
An accident rate of 20% is often used as an ‘average’ across all industry sectors and uses. This means that 1 in 5 cars will be involved in an accident of some type every year, or put another way, every car will be damaged to some degree every five years. With just over 3 million vehicles registered in NZ x 20% accident rate, the result is around 600,000 damaged vehicles annually. That’s a lot of car accidents!
Accurately estimating the total COST of that damage is difficult, for the same reason – insurance company data is not in the public domain. However an ‘average’ repair cost of around $2,000 is often used in the broader repair market and is a useful benchmark. So multiplying those 600,000 incidents by the estimated average cost of $2,000 results in a total well over a billion dollars per annum. Clearly the collision repair sector in NZ is a significant industry, similar in scale to the entire wine export market!
The collision repair market is a significant direct and indirect employer – and that’s a good thing for the economy. However the human cost is also substantial – 284 road fatalities in 2011 and 12,574 car related injuries. This is a too high a price to pay – please drive carefully Kiwi’s.
Nicks
A billion dollars a year for panelbeating repairs! That’s a lot of panelbeaters – why can’t the cost be cheaper with all that competition?
crashmanagement
hi Nicks and thanks for your observation. The panelbeating industry is large, and for that reason it’s extremely competitive. Repair costs have actually been falling for years because the insurance industry tightly controls cost – in fact some would say they’ve gone too far and that the sector has reached an unsustainable level. It is true that some panel shops simply cannot compete any longer with the high demand for continued investment in high-tech equipment and on-going technical training, and there have been many shop closures over recent years – some observers are calling it an industry in crisis. Many involved in the panelbeating trade tell us that repair rates are set at $40 – $50/hr by insurers and cannot understand why mechanics can bill labour at over twice that rate, while highly skilled collision repairers are forced to comply with much lower charge out rates. It’s an interesting subject of debate, and we encourage more discussion on the issue.
Nicks
I know mechanics charge over a hundred dollars an hour, so that just can’t be right, at forty dollars an hour most of it would be gone in wages.
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