Falling car accident rate means your friendly local panelbeater could be out of a job!
On a more serious note, road safety has been in the spotlight lately with multiple fatal accidents in recent weeks, this is a tragedy that particularly involves young drivers, speed, drinking, and unsafe cars. If we eliminated all those factors, it’s estimated that crash fatalities would plummet well below the NZ 2013 level of 254. Adjusted for population, both the fatality rate and the general car accident rate has been falling decade on decade, and that’s positive but the AA believes that some fresh thinking is now required in order to make a more fundamental impact.
They make 4 key points:
DRIVING WHILE DRUGGED-UP: The Police need the resources and technology to identify these idiots and get them off our roads.
HARD-CORE DRINK-DRIVING OFFENDERS: Most of us are responsible and know what our personal limit is, whether a glass or two or three. However there are known repeat offenders that drive over the legal limit, and two or three times the limit. Not twice or three times in their lives, but twenty, thirty or fifty convictions. They also don’t care whether they actually have a current licence or not. Get these idiots of our roads!
NCAP CAR SAFETY RATINGS: Educate the people on the meaningfulness of this issue. It’s mandatory for car dealers to advertise fuel efficiency, why not safety ratings. Let’s teach our idiots about car safety technology.
ROAD DESIGN: Redesign those known black-spots and replace painted centre lines on the open road with actual barriers. Let’s protect our idiots.
We would also add better driver education. Or is this just an Auckland issue that brings out the bad, the mad, and the simply rude?
We also vote for more policing of existing regulations. We see far too many cars without WOF or rego, and a scary number of drivers without a licence. We won’t even talk about mandatory insurance, not today anyway, but will make the point that NZ is the only first-world country left that does not have at least compulsory third-party insurance. If we insure our idiots, they will understand the cost implications of driving like idiots, in idiotic cars, and hopefully mend their ways.
Innocuous car park fender-benders are outside the scope of this proposition though – if there are no car accidents at all, the entire panelbeating sector would be unemployed. As the industry currently contributes about a billion dollars annually to the NZ economy, we say drive carefully, but not too carefully, the NZ economy and an entire industry sector is depending on you.
Leslie
Innsurance companies are not interested in 3rd party cover on high risk drivers, it’s undesirable business and a money loser. The focus of insurers, banks and other dominant industry corporate entities is to maximise profits not to provide an economic good to society. Insurers have been fighting compulsory 3rd party cover in NZ for decades. It’s never going to happen.
JohhnyB
Your right about that insurance companies squeeze panelbeaters for every dollar then squeeze the public for premiums and unaffordable excesses. What’s the point of a $2000 excess no private car will have the cash to pay so thousands of cars drive around dangerously damaged and the panelbeating industry looses out on all the work. Double whammy, not enough work and skinned on job rates! Insurance companies only want customers that never crash. Those people wouldn’t even need insurance if third party was compulsory so I agree compulsory third party insurance will never happen in NZ, insurers have too much power and will keep lobbying the government against it for their own self interest.
Nicks
I think we all agree on the power issue, Australian insurance companies own NZ. Premiums and excess are excessive, their profits are excessive, and Christchurch is still a shambles. How did IAG’s take over of Lumley ever get past the Commerce Commission?! Now they own NZI, State, AMI and now Lumley Insurance. IAG already had 60% of the car insurance in NZ and they reckon they’re now controlling 3/4 of the market. For customers a dangerous lack of competition, for panelbeaters probably too for much control (where else are they going to get their work from if they don’t play IAG’s game!), and probably not good for insurance brokers either. You know what they say – power corrupts, and absolute power corrupts absolutely. Carpe Dium NZ!
Jenni J
What’s the fuss about? So IAG (and probably other insurers) negotiate the lowest possible rate for work, that’s bog standard in the commercial world and applies to every sector from gas stations to supermarkets. I understand also that IAG has ‘preferred repairers’ and directs claims business to those firms, so in effect, delivers extra volume in exchange for a wholesale rate rather than a retail rate. Again pretty standard fare. If those same panelbeaters had to market themselves individually to get the same volume result, it would probably cost them more than a small margin reduction to lease a car and pay sales staff. On top of that they’d need a good understanding of sales & marketing fundamentals – is this feasible, or are they better off accepting a margin cut from insurance companies in exchange for volume business?
Hammer Head
Your onto it Nick S and you Jenni obviously know nothing about the power Aussie insurance companies have. No shop can afford to dump 60% of their work and hold out long enough for an improvement in terms and conditions, panelbeaters are fighting for the chance to stay in IAG’s network as we speak because they’re dead without the work flow and that includes the biggest and best panelshops in the country. Just because none of them will survive without IAG contracts does not make it right. Have you already forgotten the supermarket controversy in the media a couple of months ago. Same problem. The only reason the media backed off is the same reason SevenSharp dropped the scandal affecting panelshops – huge corporate lobbying. It all comes down to money, they have it and we don’t so we get screwed. Mechanics charge around $100/hr, we get $45. Corporate bullying its bullshit.
JJ Smith
Your right on the money as usual Crash Management. Page 3 of the Herald this morning profile’s NZ’s worst drink driver with 31 convictions and 33 jail terms. Name and Shame – Brian Hart from Napier! This criminal doesn’t give a shit about the law or the public, as soon as he’s out of jail he’s on another bender and back in a car. Name and Shame – our pathetic justice system for letting this maniac lose to wreck other people’s lives.
crashmanagement
Thank you Hammer Head. We do sympathise with an industry under pressure. We’re also aware that service providers are eager to engage with the current round of preferred repairer contracts despite the competitive pressures. We assume the specified hourly rate is viable for them, albeit with tight margins so Jenni makes a valid point. Many industries do work with extremely tight margins including Crash Management, but again, we’re continually approached by top quality collision repairers eager to work with us because we’re a volume work provider and deliver additional business to them.
Hammer Head
Your not helping the problem are you Crash Management you should be charging customers for your service same as Sureplan and Fleetsmart do, not pressuring panelbeaters even more. You expect too much ‘service extensions’ too which is fine for customers but someone has to start paying for all this. I know you have some great clients and we all want a share of that but insurance rates are too low. The best panelbeating business need more work and need to be paid more for it before we end up being owned by the Aussies too. Yeah right, its already started. AA Insurance’s new mega collision repair centre in Auckland. Don’t expect any customer service there folks!
Crash Management
We welcome all views, but you do make some very sweeping statements. We do understand that both our competitors SurePlan and CardLink/FleetSmart charge their clients for the service via a monthly fee per vehicle (regardless of any service provided, or not). We also believe fees are charged to panelbeaters for each job referred, via rebates or discounts etc. This is common practice in the commercial world. Think about the fees franchisees pay to the master franchisor for instance – it’s an exchange of value for services (and business) delivered to the franchisee. Insurance companies pay insurance brokers a fee too, for doing all the work and directing business to them.
Similarly, Crash Management (or SurePlan or FleetSmart) invest marketing dollars to attract and serve clients, then deliver that business to top quality collision repairers. For those repairers the main difference between us and IAG is that the business we deliver is consistent with marginal pricing theory (ie it’s EXTRA business), however the IAG business is their bread-and-butter – and that’s the problem for them. We agree rates are low, we don’t defend that but we don’t control that either.
Crash Management work with only the best quality panelbeaters throughout NZ, and continuously educate our clients about the need to maintain high technical standards. Many of these clients are self-insured or have very high excesses so incur repair costs themselves. My point is, that with over 1300 known panelshops in NZ but only around 350 CRA members certified for Structural Repairs, the unregulated nature of the industry is your enemy not insurers. Eliminate the 900-odd, and the power dynamic of supply/demand will shift in your favour.