According to the companies providing the services, credit hire offers repairers the chance to improve their labour rates, enjoy referral fees and enhance the customer experience.

But is this just spin, or is credit hire really the saviour of the bodyshop industry?

The credit hire industry was created as a result of insurers failing to adequately serve their customers.

Failure to provide like-for-like cars via their approved bodyshops and failure to properly manage the repair process opened the door for this new type of organization. And insurers’ focus on minimizing costs by squeezing bodyshop margins pushed repairers into their arms.

Kyle Harris, Britannia Accident Assist managing director, believes repairers are caught in a “Mexican stand-off” between insurers, which exert pressure for lowest repair costs, and customers, who demand higher standards of service.

“Coupled with ever- rising operating costs, the net result is to squeeze the profit margins of repairers to a point where many are going to the wall,” he says.

“Repairers need the services of credit repair companies until such time as the insurance industry recognizes that low prices and exceptional service do not go hand in hand.”

Market leading credit hire provider Helphire has been offering services for 15 years. Around 80% of its work comes via insurers, the rest through bodyshops.

Its has seen a 46% increase in hires since September 2005, up from 71,000 to 104,000 – 4,000 of which came from Swift. Its repairs have risen by 52% to 38,000 and personal injury claims are up 63%, from 16,000 cases to 26,000.

Alan Gilbert, managing director of Helphire, feels bodyshops miss many opportunities because they focus too much on repairs and ignore other possible avenues for profit.

“If at reception they can just learn to ask ‘how did it happen?’, then they are in a strong position to offer additional services, as well as improving the customer experience,” he says.

In a marked change over the relationship held previously, Gilbert says credit hire companies are beginning to change the opinion of the insurers so that they are able to “work together to our advantage, rather than paying the legal system”. (Feature continues in September 22 issue of AM)

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