Crashing repair parts prices
Santam, South Africa’s largest short-term insurer, has warned that the significantly increased price of vehicle parts – as highlighted by the 2015 Kinsey Report – has a considerable knock-on effect on the overall cost of vehicle repairs.
According to Fanus Coetzee, head: adjustment services at Santam, accident-damaged vehicles are often deemed “uneconomical to repair” because of the prohibitive cost of original equipment manufacturer (OEM) parts, as prescribed by the motor vehicle industry.
To counter this, Santam has introduced a certified aftermarket parts programme to reduce repair costs on vehicles no longer under manufacturer warranty. Aftermarket car parts provide a more economical alternative to OEM parts.
“As an insurer our objective is to ensure that we reduce repair costs and save vehicles that would be uneconomical to repair if fitted with OEM parts. In the process, we aim to contribute to more competitive insurance premiums for policyholders and create more work for our business partners in the motor body-repair industry,” says Coetzee.
“During the repair process we will not compromise on the quality and safety of parts used,” adds Coetzee.
“Santam provides a lifetime warranty on all body repairs where we have authorised certified aftermarket parts. Santam’s initiative on certified aftermarket parts is endorsed by the South African Insurance Association (SAIA),” he concludes.
According to SAIA, the insurance industry spent more than R15 billion on replacement parts in repairing accident-damaged vehicles during 2014. Lowering the cost of parts is essential for the sustainability of the insurance sector.