Norton Consulting managing director Eddie Longworth believes lower prices will raise the number of write-offs. He said: “If - or rather when - new car price reductions hit home, insurers' total loss costs are going to go up soon afterwards. We are already seeing dealer groups launching internet-based sales with discounted prices.
“While cars become cheaper, the cost of repairing damage doesn't.” Insurers would need to look at remunerating bodyshops for handling written-off vehicles or accept low-cost smart repair methods.
While an increase in write-offs would not in itself put bodyshops out of business, it could act as a spur to continued consolidation in the industry, said Mr Longworth.