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Accident Aftercare: Dealers Left to Pick up the Pieces after Repairs Gone Wrong

by Roger Lanctot | Nov 30, 2012

Just picked up my wife's Toyota Sienna from the local Toyota dealer where I bought the car and heard a familiar tale of woe.  Seems a customer had a bad accident and took his vehicle to an independent repair shop as per direction from his insurance company.  The independent shop patched the car back together except that the car was no longer functioning properly.  As a result, after spending $10,000+ with an independent, the customer had to bring his car back to the Toyota dealer to try to figure out what was wrong.

The scenario is more familiar than you may think and it highlights a multi-billion dollar opportunity currently overlooked by the automotive industry.  Drivers who get into accidents - big ones or fender benders - nearly always call the insurance company first to file a claim or to get assistance and advice.  The insurance company almost always directs the customer to its network of preferred independent shops to repair the car.  There are a lot of things the insurance company is NOT telling its customer and using genuine OEM parts is just the beginning.

By going to an independent shop the customer risks his car:

-> Being rapaired with unauthorized, third-party parts which will void the warranty.  This includes everything from sensors to windshields.

-> Being repaired by a company that may not even have access to specific parts - either from the OEM or third parties - in the event the car is a new model.

-> Being repaired poorly and incorrectly - particularly with regard to electronic systems.  While independents have some protection to access repair information from OEMs, the information is expensive and independents usually can't afford to repair all makes and models.

-> Being repaired unsafely.

In the worst case, if the customer is leasing the vehicle he or she may be liable for any or all third-party replacement parts being removed and replaced by genuine OEM parts at the customer's expense.

It is for this reason that dealers in the United Kingdom have mounted a now two-year-old campaign to convince customers to call their dealers first, not the insurance company.  Using this approach, the dealer becomes an advocate for the customer to ensure a proper repair occurs, regardless of whether the repair is performed by the dealer or an independent.

As for Customer X at my local Toyota dealer, hours of labor will now go into a forensic exercise to diagnose the problem before the repair of the repair can begin.  It won't be long before dealers in the U.S. are spreading the same message.  Customers should call the dealer first before the insurance company - or at least make sure the dealer has a chance to bid on the repair.

The dealer has a much bigger stake in ensuring the proper repair is made and the customer made happy.  The insurance company is solely interested in mitigating its expense.  The well-being of the customer or the car is a lower priority.

What's at stake for dealers and OEMs?  According to the Automotive Aftermarket Industry Association, the collison repair business in the U.S. is worth $40B - and new car dealers have about a 15% market share.  That's what is at stake.  To say nothing of the opportunity to sell the customer a new car and, generally, to provide an enhanced customer care experience which is likely to produce higher customer satisfaction scores.

For additional insight:  Insurance Telematics: Path to Profit through Accident Aftercare -

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