Essential information for end of life vehicle dismantling, depollution and recycling

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Time to talk about second-hand parts on insurance repairs

Second-hand parts are rarely used on insurance repairs but that might change. David Williams, Managing Director of Underwriting and Technical Services at AXA Insurance, points to two potential factors: the public may see green parts more favourably, and Brexit-linked shortages may encourage their adoption.

David WiIliams - AXA
David Williams

The demand to constantly use new parts on ‘insurance jobs’, and usually OEM parts at that, has been strong for some time, driven perhaps more by vested interests than genuine safety concerns. Could now, however, be a time to change that, with recycling gaining stronger popular support, and new parts feared to be coming in shorter supply after Brexit?

Away from the motor vehicle space, our customers seem generally positive about recycling, and environment-friendly initiatives have attracted a lot of positive comments. When it comes to green parts, however, implementation has been poor, despite the best of intentions. Bad communication from insurers and self-interest from all sides have led to scaremongering.

When people protest so loudly, I ask myself where the vested interests are. Sadly, I believe there are strong financial drivers in this contentious area. It’s not easy making money as a motor repair shop or network doing insurance work and there are a number of important elements. As we found out when trying to move to a more transparent labour-only approach, some repairers rely on the mark-up they get on new parts being fitted to make ends meet. Does that change behaviours? Are we seeing more replace than repair? All things we hoped a labour-only deal might eradicate.

Manufacturers don’t help. Fewer and fewer small parts are available, as carmakers increasingly use whole units that cannot be repaired and need full replacement. Headlamps are an obvious example: gone are the days when you could just unscrew something and pop a new bulb in!

Turning to insurers’ failings, an obvious problem has been in not communicating convincingly the benefits of recycled parts. We’ve been criticised for describing them as ‘green’, as if trying to disguise they are essentially second-hand. But is second-hand that bad? For most of my life, I’ve been very happy buying second-hand cars, as have the majority of the population. So why on earth not second-hand parts? I think what was missing perhaps was a bit more clarity that these parts were reused parts. Also, making sure the savings generated were passed down to the owners accepting this type of repairs, through reduced premiums or maybe more simply through a reduced excess.

In my opinion, if non-safety-critical parts can be replaced with tested recycled units that are the same age or younger than the recipient vehicle, then it should be supported. It is good for the environment and benefits can be passed on. Do we do it, though? Generally, no. The scaremongers have done a good job. We don’t want any negative publicity and therefore reserve it for exceptional circumstances, when we have difficulty getting a new OEM part and when we agree on it with the customer in full transparency. Interestingly, with Brexit looming and universal predictions of parts delays, this is definitely something that needs to be revisited.

Maybe the solution is to go for a dedicated discounted insurance product where everyone knows upfront that second-hand green parts will be used? That’s been tried before but sadly vanished without trace. I’m still not sure whether that was scaremongering winning the day or just that premium discounts weren’t big enough.

Perhaps public opinion may have changed sufficiently to give it another go? With clearer communication on both sides, and benefits shared, why not? Certainly, this initiative should appeal to both environment-minded people and vehicle dismantlers with the market opening up. Let’s see what we can do to open an honest debate and hope that this time we can begin to change our approach. The reality is that if Brexit does lead to parts shortages and lengthy delays, then suddenly a second-hand part might not seem quite as negative as some people suggest.

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Owain Griffiths

Owain Griffiths

Head of Circular Economy at Volvo Cars

Owain joined Volvo Cars in June 2021 to lead Circular Economy in the Global Sustainability Team. The company has committed to being a circular business by 2040 and has financial, recycled content and CO2 based targets for 2025, all of which Owain is working across the company to make happen. Owain previously worked for circular economy consultancy Oakdene Hollins where he advised businesses on evidence led circular economy implementation. 

Turning into a circular business and the importance of vehicle reuse and recycling.

The presentation will cover the work Volvo Cars is doing to achieve 2025 but mainly focus on the transformational work towards 2040 and the business and value chain changes being considered. Attention will be paid to the way vehicles are being dealt with at the end of life and the complexities of closing material and component loops. Opportunities and challenges which Volvo Cars is facing will be presented including engagement with 3rd parties and increasing pressure from stakeholders.

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e2e Total Loss Vehicle Management [e2e] is the UK’s only salvage and automotive recycling network with nationwide, environmentally compliant sites delivering performance resilience and service reliability to the insurance and fleet markets.  The network’s online salvage auction drives strong salvage resale values and faster sales.  e2e’s salvage clients have access to the network’s stocks of over 5 million quality graded, warranty assured reclaimed parts. 

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The salvage and recycling operating environment is evolving rapidly, and e2e is anticipating, listening and responding to changing market needs.  Regulatory compliance, ESG, reclaimed parts, customer experience, EVs, new vehicle technologies, data and reputation risk are just some of many considerations linked to the procurement of salvage services.  e2e will drive further added value to clients and members through the adoption and application of emerging technologies, continuing to differentiate its proposition and position salvage services as a professional partnership. 

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