Report Says Used Parts Substituted More

The latest industry trends report from Mitchell International, Inc., says that collison repair shops have begun substituting used or aftermarket parts more frequently in repairs.

The quarterly report says that these substitutions have decreased estimate severity despite rising part prices, and an increase in labor costs.

“Mitchell’s in-depth and multi-year data sets give the collision repair industry an unparalleled ability to understand significant changes in the way repairs are made and the resulting impact on estimate average severity,” said Greg Horn, Mitchell’s vice president for industry relations. “Comparing our supporting data from the MCPPI with trends in severity and the national rate of inflation shows that a clear substitution effect is at work, causing average gross repairable estimate severity to decline, despite rising OEM parts prices.

“As repairers opt to substitute more economically viable used or aftermarket parts in place of costly OEM parts in ever-larger numbers, the net effect has been a decrease in parts dollars and increase in labor dollars on repairable estimates in recent years,” he added.

Other valuable points of interest in the current issue of Mitchell’s ITR include:

* On average, the Actual Cash Value (ACV) of vehicles appraised for Collision losses during Q-3 2009 was $12,188-$829 less than in Q-3 2008-reflecting the continuing lower value of today’s vehicle mix.

* In Q-3 2009, the average gross appraisal value for Comprehensive coverage estimates processed through our servers was $2,468-compared to $2,356 in Q-3 2008. Applying the prescribed development factor of 2.1% for this data set produces an adjusted value of $2,520, a $164 increase from this same period last year.

Complete content is available in the latest Industry Trends Report, which may be downloaded in PDF format by visiting www.mitchell.com. First published in April 2001, Mitchell’s Trends Report has grown in both content and circulation, now reaching more than 23,000 collision and casualty industry professionals.