• The repairer was enjoying the commercial ben- efits of the strategy so much that they could not get enough of these parts (of course, we made it easy for the repairer to source quality parts, at the right price).
• Supplementary charges diminished and so too did calls from irate policyholders who were previously primed to question the use of anything but new parts. Today, I am helping insurers review their current models and supporting their efforts to build new models to take them into a more sustainable future, all the while winning repairer’s support – yes con- trary to many taking the traditional confrontational approach, we can all work together for mutual com- mercial benefit. So, let’s look at a simple example that demonstrates what I have said above. For the purpose of this I have assumed that; 1. The repairer currently enjoys a discount of say 25 percent off the list price (for some makes high for others maybe not, but a line in the sand).
2. The repairer charges the insurer the full list price when using the OE dealer part.
3. The OE list price for the example used is $1,000. 4. The price of the recycled alternative part is 45 per- cent of the OE list so $450 (this is a solid average).
5. Insurer incentivizes repairers to use recycled alter- native parts by allowing a margin of 30 percent of OE list price.
This demonstrates how all stakeholders can ben- efit from a better parts mix and although the OE’s may feel that this will lead to less sales for them, it will lead to more repairable vehicles, which they will ben- efit most from. It is in everyone’s interest to achieve this outcome, including the consumer who ultimate- ly pays for increased repair costs in the form of in- creased insurance premiums. As I stated earlier, what the industry has failed to rec- ognize is that co-existence is not only possible it is, in fact, crucial to the future of the repair, insurance and parts industries. The mix of parts in any repair is what we need to focus on. The above model incentivizes all to participate in this future of commercial and envi- ronmental sustainability.
Impact of Vehicle Technology Technology in vehicles is changing daily. Every day,
we see articles in trade publications that talk to a new development that supersedes that which was released only months earlier. This is both exciting and, at the same time, problematic, with some vehicles with up-
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