Fleet accident management companies have been accused of pressuring repairers into giving 10% invoice discounts to enable them to dupe fleet operators into believing they are receiving the most cost-effective service.
The discounts, taken as a referral fee, make individual jobs look cheap for fleet clients, but can lead to higher average repair costs caused by less efficient working practices.
One repairer said: “It's a con that has been going on for years. Fleets think their repairs are being cost-effectively sorted out, but they aren't.
“The accident management firms are not concerned about reducing the average repair costs – they are only concerned about getting their 10%. Fleets are being cheated.”
He added: “Repairers can only make a profit from parts on these jobs, and even this is subject to a 5% discount.” Repairers believe there should be an accident management protocol for the fleet sector that is in line with the insurance market. Accident management firms working for insurers have a Memorandum of Understanding, which sets a bottom line discount of 5%.
However, it is only a voluntary agreement, and some firms continue to demand higher levels of discount.
Industry expert Robert Hadfield said: “Fleets would benefit more from accident management firms paying a proper rate, lowering the discount and working with the repairer to lower average repair costs.”
Bob Hood, RMI Bodyshop Services director, advised repairers to ditch any contract that was not viable.
“Clearly taking 10% from the invoice when rates are already depressed is going to make the contract unprofitable,” he said.