KNOCK-ON EFFECT: The South African Insurance Association says because of an increase in replacement vehicle parts, the cost of repairing a vehicle has now also increased. Image:iStock / Juanmonino
Cape Town - In October 2015, Wheels24 reported that the 2015 Kinsey Report highlighted the considerable increase in the cost of spare and replacement motor vehicle parts.
The significance of this is the knock-on effect that such price hikes have on the overall cost of vehicle repairs.
According to Santam, South Africa’s largest short-term insurer, around 70% of motor claims relate to motor vehicle crashes.
Costs the SA auto industry billions
According to SAIA (South African Insurance Association), in 2014, the insurance industry collectively spent between R15-billion to R16-billion on the replacement of parts in the repair of accident-related vehicles.
Bringing down the cost of car parts is instrumental for the sustainability of the insurance sector.
Read: Car parts prices in SA: We list cheapest vehicles
To counter the increasing cost of parts, Santam has introduced a certified aftermarket parts programme to reduce repair costs.
An aftermarket part refers to any part that is not directly sourced from the vehicle manufacturer. Aftermarket car parts provide a more economical alternative to Original Equipment Manufacturer (OEM) parts. Note that this applies in cases where the vehicles being repaired are no longer under warranty and owners are not obliged to use OEM parts.
According to Santam's head of adjustment services, Fanus Coetzee, an accident-damaged vehicles are often deemed "uneconomical to repair" due to the prohibitive cost of OEM parts prescribed by the motor vehicle industry.
Read: Car parts prices in SA: 'Do your homework'
The Kinsey Report, which reviewed 74 vehicles across nine categories on a price per part comparison pointed to the fact that crash parts were the most costly when it comes to vehicle repairs.
Materials play a role in high costs
Materials used in car construction also play a role. The use of alloy (a mixture of metals) is very popular in vehicles as it is a lower cost material, which lightens the vehicle weight and improves fuel consumption. Typically, cars manufactured today are built using alloy parts.
Cars with aluminium body panels and chassis components are complicated and very expensive to repair. Vehicles with aluminium parts are often considered uneconomical to repair when the repair costs reach 50% of the resale value of the vehicle.
However, if you use aftermarket parts to repair a car, the repair becomes more economical and viable to consider.