The organisation says repairers who have signed insurer or accident management approved repairer agreements should immediately contact their work providers and inform them of the revised parts supply terms over which they have no control and renegotiate the terms and conditions of the contract. These could include the reduction or removal of the parts discount or where give the bottom line discount or reduction of accident management referral fees.
Ron Nicholson, VBRA Director-General, said “The retained margin from the sale of parts is a vital element of any body repair business as the labour rate has been virtually static over the past 8-9 years. Responsible insurers and accident managers will recognise the dramatic financial impact that these sudden changes will have on each and every repair business.”
The VBRA has written to insurers to alert them to the situation and says it is up to every repairing business to immediately take steps to stop further financial haemorrhaging of the business by invoicing parts at margins that will be sustainable.