Accident Exchange, launched in 2001 to offer prestige courtesy cars to franchised bodyshop customers, says a large proportion of drivers contact their dealer after they have been in an accident, especially in the premium sector, but the receptionist refers them back to the insurer and the business opportunity is squandered.
“The customer comes to the dealer first for help, and they send them away,” says Steve Evans, Accident Exchange chief executive officer. But he adds: “Around half of prestige drivers that are involved in an accident will change their car within six months – knowing that, would you turn away the repair business?.”
Accident Exchange is looking to establish relationships with franchised dealers and manufacturers – it has agreements with nine, including Rydale, Listers, HR Owen, BMW and DaimlerChrysler Retail – for the supply of prestige courtesy cars to non-fault customers.
But the paybacks for retailers do not stop at gaining commission for every customer referred to Accident Exchange. The company also sources its courtesy cars from the dealer. In Rydale’s case this has resulted in the sale of 95 cars, not to mention a trebling of revenue from non-fault accidents over the past 12 months.
“It’s a win-win situation,” says Evans. “We handle the claim so the bodyshop gets more business, we buy the car from the sales operation and we pay commission for every referral. We can add £1m to the dealers’ bottom line.”
The credit hire industry has its roots in the early Nineties. Back then it faced immense resistance from insurers who pay for the provision of the car rather than rely on a bodyshop to supply one free of charge.
It resulted in several court cases as both parties tested the legalities. Evans says the relationship between insurers and credit hire companies has now settled down. “Our relationships with insurers have changed – they work with us now and are more collaborative.”
For Accident Exchange, the listing on the Alternative Investment Market (AIM) in April, raising £1.5m, helped. “It gave us good visibility, good credibility and access to funding. And it improved our relationships with more significant people in larger organisations because they took us more seriously as a professional business,” says Evans.
The company is now surging ahead and will turn over £18m-19m this year. Post AIM listing it was targeting market capitalisation of £100m within three years. It did it in four, and is currently running at £115m.
One year ago Accident Exchange had a fleet of 75 cars, now it has 520 – mostly premium with around 100 mainstream models – and it expects to have 700 by the end of April. The way the business has progressed already, however, it’s possible the company could exceed this quite comfortably. “We anticipate a four-digit fleet by mid 2005,” adds Evans.