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Why accident management costs are increasing and what to do about it

UnionLeasingCarRepairIcon.pngAccidents happen. When you manage a fleet, you know this to be inherently true. The question is why does the annual budget for dealing with accidents continue to rise?

There are a number of reasons for the slight but steady increases in accident management costs every year. The most notable is the increasingly complex technology that has come with modern vehicle improvements.

From sophisticated safety features and electronics to updated manufacturing materials (such as high-performance plastics), repairing damaged components is not as simple as it used to be. Technicians are finding they need to replace the part entirely, which costs more money. Vehicle computers are a good example of this phenomenon; traditional technicians aren’t equipped to fix engine control or fuel management circuit boards.

Innovation in the automotive sector is necessary for manufacturers to be competitive, so the trend of rising costs is likely to continue. For fleet managers, that means finding new ways to reduce accident management expenses.

Here are a few suggestions.

Use high-quality, certified aftermarket and used parts when available

If there are no restrictions on using aftermarket parts in your state—legislation varies, so be sure to check—this can be a great way to save up to 45% on parts. Quality and safety are naturally your number-one priorities when sourcing such parts, so even after finding a reliable source, avoid used suspensions and safety equipment (e.g. air bag systems). We also recommend using parts that are the same model year as your vehicle (or newer), so they don’t wear before the rest of the vehicle.

When in doubt about parts replacement, it’s best to consult a fleet management specialist. The same goes when trying to figure out your vehicle's diminished value after an accident, and whether you can (or whether it’s worthwhile to) restore that value.

Opt for paintless dent repair (PDR)

PDR is a cost-effective alternative to conventional repair processes. It uses special techniques to remove dents, while preserving the vehicle’s existing paint finish. In addition to having a fast turnaround, PDR avoids the cost of traditional body shop repair and helps maintain the vehicle’s value, keeping original parts.

Keep repairs strictly in-house

Some fleets allow their drivers to take their vehicles to out-of-network shops. Even if it’s rare, this practice can cost more than necessary. Prevent this by seeking the oversight of an in-house, physical damage specialist (or a trusted repair partner) to be sure the right repairs are done for the right price, as quickly as possible.

Authorize repairs as quickly as possible

This is a process recommendation that could save downtime costs, if the incident is a first-party claim. Instead of waiting a week (or more) to authorize a repair, take 24 to 48 hours, when possible. When a repair shop has to wait, they are likely to put another vehicle in the bay, adding to your wait time. While you wait, you pay more in interim vehicle rental costs, which average more than $40 per day. Save yourself the hassle and the money by making the decision quickly.

Consider leaving cosmetic damage alone

If damage isn’t safety or performance related, you might be okay to just leave it without repair. There are brand considerations to factor into your decision, but we suggest thinking about repairs from an investment point of view, rather than automatically repairing a vehicle because it’s routine.

Prevent accidents in the first place!

The best way to reduce accident costs is by working to prevent accidents before they happen. Having a team-focused safety policy in place—where drivers are trained, regular maintenance is scheduled, and accident count is measured by the number of incidents per million miles driven—will help bring everyone on board with the importance of safe driving and accident reduction.

If you don’t have an internal team for accident management, there are some great services available to coordinate driver training, repair management, etc. To find a trustworthy service, you can tap into your insurance carrier to refer a pre-screened, insured and industry-certified company (by I-CAR or ASE, for example) from their direct repair network. Your carrier should also be able to send you pricing guidelines, so you know what to expect.

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