Repair costs ‘overlooked’ for new car technologies

Car manufacturers are getting too caught up in the race to launch new technology and are not giving enough thought to, or guidance on, reparability, according to industry experts.

This is resulting in increased costs and downtime for fleets, and, in some cases, vehicles being written-off when they should be reparable.

Long vehicle off-road times could also have implications for benefit-in-kind tax.

Richard Billyeald, chief technical officer at Thatcham Research, said cars are being brought to market without methods of repair being released. In one instance, repair methods were still not available six months after a car’s launch.

“Inevitably there is huge competition in the car market and technology is moving so fast it is in the interests of the car manufacturers to offer new features as quickly as possible. They’re always trying to complete with their close rivals but, if there is nobody keeping a check on it, then things like reparability can lose their importance,” he said.

Terry Gibson, head of member services at the Independent Garage Association, said it was “not uncommon” for repair methods not to be available from launch, although the issue was reducing over time.

However, while it wouldn’t be a major issue for independents carrying out simple repairs, it could potentially delay crash repairs where a bodyshop would not proceed without a repair method, he added.

Thatcham wants to put reparability “back on the agenda” this year, starting with tackling “unnecessary” issues, particularly with electric vehicles (EVs), said Billyeald.

“You can have a relatively minor parking impact in which you might have done a bit of damage to the bumper or some of the panels –hitting a bollard, for example – and that then trips the fuse in the battery which then requires you to remove the battery and to reset it. Suddenly a £1,000 claim becomes an £8,000 claim – just unnecessary,” he said.

The cost of replacing batteries in EVs can also mean that a vehicle becomes uneconomical to repair, although the same would undoubtedly be true should a diesel or petrol engine require replacing.

Billyeald said that while the battery will not be damaged in every impact, when damage does occur, the battery has to be replaced “in pretty much every case”, unlike an engine.

“It very much depends on whether it is a hybrid or a full EV but the (battery) price range is £6,000 up to £30,000,” he said, the price differential ranging from, for example, a Nissan Leaf to a long-range Tesla.

In comparison, it would typically cost between £5,000 and £10,000 to fit a new internal combustion engine (ICE).

The bigger issue comes with the need to disconnect the battery when carrying out repairs, a situation experienced recently by Zip Water fleet manager Graham Short.

“I had a Volkswagen Golf GTE where the driver caught the wheel arch on a post; it was minor damage,” Short said. “It went into an accident repairer and they said ‘it’s got to go to VW to have the battery disconnected’. We had to book it in with VW, who couldn’t do it for more than a week. The vehicle went in, the battery was disconnected and it was transported back to the bodyshop for the repair to be carried out. Then guess what? It had to be brought back to VW to be reconnected. The car was off the road for about two months just for minor damage.”

A Volkswagen spokesperson was “unable to comment” on Short’s experience but said that around 98% of its dealer network can repair an EV and can deactivate the high voltage system, if it is not damaged.

If damaged, this may need the assistance of a specialist from one of 15 retailer-based battery repair sites or Volkswagen’s technical service centre in Milton Keynes.

The centres have been set up to complete more complex battery repair methods using the latest diagnostic equipment and highly-skilled Volkswagen technicians (known as high voltage experts).

Volkswagen said that if the batteries are physically damaged then most would need to be replaced but each repair is treated on a case-by-case basis.

The spokesperson added that repair methods are available at launch for each new model.

Short has also experienced issues with parts availability – a problem which could become more widespread in the event of a no-deal Brexit.

“We had a Nissan e-NV200 hit while parked,” Short said. “It was not a big repair, but the van was off the road for a similar length of time because the parts could only be procured from Japan.”

A Nissan spokesperson said: “Supply of parts for EV models is similar to any other ICE vehicle. We can experience pressure points, as do all manufacturers, but we encourage dealers to notify us of cases involving vehicles off the road so they can be prioritised.”

On the issue of EV reparability, “every Nissan dealer must be able to diagnose, service and repair electric vehicles”, the spokesperson said, and “depending on the diagnoses, battery functioning can be re-established by replacing individual modules, the battery casing or the entire battery”.

Checking EV battery health, meanwhile, is “a straightforward five-minute operation with the Consult diagnostic tool used by Nissan dealers across Europe”.

Service and repair manuals are “published at the start of sales and updated regularly as required”, added the spokesperson.

While franchised dealers may be geared up to repair electric vehicles, it is “more challenging” for independents and the smaller bodyshops to invest in training and equipment, according to Billyeald.

“If they’ve got to buy equipment to cover all the manufacturers that’s a big ask,” he said.

This could potentially leave fleet operators with less choice about where their vehicles are repaired – figures from the FN50 show around 23% of leased cars and 33% of leased vans are repaired by independent workshops, which are typically cheaper than franchised dealers.

However, Gibson said: “More and more independent garages are embarking on training their technicians to service and repair hybrid and electric vehicles.

“This safeguards the business due to the potential risks associated with the high voltages within these vehicles and also presents them with business opportunities, differentiating them from local competitors.” 

Fleet Assist, which provides leasing and rental companies with a network of 5,000-plus franchised and independent service outlets, said that “virtually all” have the capability to service and repair hybrid and plug-in vehicles.

Halfords Autocentres has trained 357 of its 1,500 technicians to IMI Level 2 in electric/hybrid vehicle maintenance, enabling it to service vehicles across its network of 316 autocentres.

Pete Marden, fleet director, said: “This training gives our technicians the confidence to work on these types of vehicles and access fault diagnosis to include battery performance via our Bosch KTS equipment.

“In July we introduced a new bespoke Halfords Hybrid Service offer to our customers. To date we have completed over 1,600 such services, around 1% of the total number of services over this period. This is above the percentage of penetration of electric vehicles within the market place so is proving a very successful alternative to the OEM dealer network for our customers.

“In the next financial year (April 2019 - April 2020) we plan to add the IMI Level 3 award in electric/hybrid vehicle system repair and replacement qualification to our training plans which will give us the additional ability to repair these systems.”

However, given the relatively low number of hybrid and electric vehicles in the marketplace, a more pressing issue for repairers is that around 55% of new cars now have advanced driver assistance systems (ADAS), such as autonomous emergency braking, fitted as standard.

These systems can use a combination of cameras, lasers and radars, which make repairs more complex and expensive, particularly if recalibration is required following an accident.

Fleet Assist head of network management Chris Crow said: “There is some marketplace confusion around which ADAS-equipped vehicles self-calibrate following windscreen replacement and which require recalibration.

“Automotive glazing is becoming more specialised through the technical nature of glass and many smaller businesses may not have the skillset, the ability to train staff or to invest in the recalibration equipment.

“That is resulting in a disconnect between glass fitment and the subsequent technical requirement for ADAS recalibration.

“In turn, that lack of clarity may lead to some fleets/drivers being confused as to when and where a vehicle should be recalibrated as some automotive glazing repairers have the capability to undertake the work, while others defer to franchised dealers. That could also result in a potential delay in the necessary work being undertaken as, once again, lead times have, in some cases, increased.”

Developments in headlight technology are also having an impact as they often have to be replaced rather than repaired when damaged.

Billyeald believes the increase in cost due to manufacturers moving from halogen to xenon technology a few years ago was “not unreasonable” but the recent proliferation of LED technology has made headlights “super expensive to replace”, particularly when matrix headlights, which dynamically move with the steering, are used.

“They give you fantastic visibility but, obviously, there are lots of moving parts and the costs are going up in line with that,” he said.

“We’ve seen huge price rises from £100 to a few thousand.”

This presents challenges for leasing companies and their fleet customers.

Kit Wisdom, operations director at Tusker, told delegates at the BVRLA Industry Outlook event: “The broken headlamp at the end of contract could be £1,000-plus. The customer is not expecting that because that’s not what they’ve seen previously and, as an industry, we need to be better at communicating that.”

Jason King, managing director of Bayfield Vehicle Hire, added: “Low level damage can spiral out of control. Something as simple as a chip in a windscreen can escalate to an £800 bill. We’re trying to understand ourselves why that is the case and then communicate that back to the customer.”

But it’s not just the technology in vehicles making repairs more difficult and expensive, it’s also the materials and joining techniques used by manufacturers as they strive to make vehicles lighter to meet strict emissions regulations.

Smart repairs can also be a contentious issue. Car manufacturers, in Billyeald’s view, can be “unreasonable” about where smart repairs are carried out on a vehicle fitted with sensors, which, again, can increase repair costs.

“We will be challenging vehicle manufacturers on that,” he said.

Gibson added: “There are instances where the vehicle manufacturers set limits on the type and areas of repair on bumpers to ensure safety systems continue to function as intended. This, on occasion, can lead to debate between garages and insurers, and garages and customers, due to the increased cost of having to replace a component that might otherwise have been a repairable proposition.”

Overall, repair bills rose 5% to £3 billion last year, with the average repair bill at £2,137, according to the latest data from the Association of British Insurers. 

Costs are expected to increase further – the BVRLA Industry Outlook 2019 report predicts an average repair bill of £2,500, although some say it could be higher.

Tim Bailey, fleet director of Northgate Vehicle Hire, who worked in accident management prior to joining Northgate in March last year, said he was already seeing average costs of £2,500 and predicted it would “grow even higher than that” this year. He also expects more vehicle write-offs.

However, fleets should consider that, while repair costs are rising, they should see fewer crashes due to ADAS.

Billyeald said: “ADAS is all about preventing that crash or mitigating its impact so don’t just look at the cost, look at the overall picture – the number of write-offs and frequency of claims as well as the cost of them.”

Bayfield Vehicle Hire has already experienced the cost and safety benefits of ADAS.

King said: “We had once incident last year where one of our cars went into the back of an HGV. We thought the car would be written off, a total loss, and wondered how injured the passenger would be.

“But when we got in touch with the driver the passenger was all right and when we saw the vehicle it wasn’t too bad. That was partly down to the technology in the vehicle, the pre-collision braking had kicked in and taken over that situation. It could have easily been a total loss.”

BIK REDUCES WHEN CAR NOT AVAILABLE

Fleet managers need to keep a close eye on how many days a vehicle is off the road for BIK tax.

HMRC rules state that if a car is unavailable/off the road being repaired for a period of at least 30 consecutive days the chargeable benefit is reduced in proportion to the number of days during the year it was unavailable.

However, if the driver is in a courtesy car then BIK is charged as though their normal car was available without a reduction. The BIK charge may be adjusted where the replacement car is materially better than the normal car or the employee is provided with a better car under an arrangement.

To read the views of Antonio Avenoso, executive director of the European Transport Safety Council (ETSC), on rising repair costs, click here.

And for FMG's take, read a blog by sales director Andrew Chandler.