Allianz’s Bold Move in the Used Parts Market: A Cheeky Commentary
Well, well, well! If it isn’t Allianz stepping up like a bad comedian at a gig with only disgruntled audience members. They want to be the first German insurer to fix up accident-prone cars using used parts. Let’s face it; this is not just a money-saving scheme, but also a bid to become the eco-warriors of the insurance world! Frank Sommerfeld, CEO of Allianz, states they’re aiming for greener practices that save our lovely planet — and my dear wallet!
Crunching Numbers: The Market for Used Parts
Currently, the used parts market for cars aged three to eight is about as lively as a wake. But Allianz isn’t letting that bum them out! With a reported 40% increase in available parts since April 2024, it looks like they’ve taken a page from the ‘take it or leave it’ school of repair policy. It’s a growing market, and hey, in a sense, it’s about time!
There is a light at the end of the tunnel — and no, it’s not another German engineering marvel. According to Allianz’s survey, 89% of consumers would accept used parts. That’s right, folks! We’re talking about accepting parts like we’re accepting an unexpected guest at a party — with a mixture of curiosity and hesitancy.
The True Cost of Repairs: A Painful Reality
Speaking of costs, let’s not put on rose-tinted glasses here. Repair costs have been rising faster than my blood pressure when I check my bank account after a night out. With spare parts skyrocketing by an average of 6.2% in just one year, and workshop rates hitting €188 an hour, it’s a shocking situation—like waking up in a horror movie!
You know it’s serious when you start to think that fixing your car might as well mean selling a kidney. “Could I interest you in my left one? I promise to throw in a tire rotation for free!” That, my friends, is the reality we face.
Turning the Tide with Used Parts
Indeed, Allianz is determined to make the used part strategy work. They’re not just dipping a toe into the water; they’re going full-on cannonball! “Every second customer we spoke to opted for a sustainable repair,” Sommerfeld gleefully mentions. That implies that among the sea of drivers, there are those up for a little adventure in old parts, like an IKEA assembly on wheels.
And let’s not forget that used parts are perfectly fine when they are certified and intact. It’s like going on a date with a used car part; as long as it’s certified, how bad could it be? You’ll just need to get past the fact that it’s already had its share of bumps and bruises!
A Global Perspective
It’s comforting to learn that used parts aren’t a foreign concept; countries like the U.S., England, and Sweden have already embraced this shrewd practice. These nations have been working the second-hand parts market for over 25 years — and here we are, just waking up to the realization that, yes, your car can have a ‘second life.’ It’s almost like finding out that your grandma’s ancient recipe book is worth a fortune on the antique circuit!
Let’s face it; a legal framework is crucial. New laws need to bolster this initiative. After all, we can’t have Allianz throwing used parts into the repair mix like confetti at a wedding – we need rules, people!
Conclusion: The Road Ahead
In conclusion, Allianz’s ambitious plans to tap into the used parts market seem like they might just pave the way toward a more sustainable, wallet-friendly future — as long as people embrace it. So, if you find yourself at the repair shop, and they offer you a delightful used door or a charming but previously-loved bumper, take a moment to reflect: sustainability never looked so… well, bumpy.
Remember, driving the ‘green’ route might just require occasionally flirting with a few second-hand parts. Embrace the quirks, preserve the environment, and remember — just like a stand-up gig, this journey is all about timing, delivery, and a bit of sarcasm!
Allianz wants to be the first German insurer to use used parts when repairing accident-prone cars. This should not only reduce damage costs, but is also more environmentally friendly. Customers should be asked before a repair whether they agree to this. The insurer announced plans to make suitable vehicle parts available to the German repair market in April 2024. “We want to strengthen the used parts market in Germany, because the use of used spare parts makes sense not only from a cost perspective, but above all from a sustainability perspective,” says Frank Sommerfeld, CEO of Allianz Versicherungs-AG.
There is currently no broad market for used spare parts for younger vehicles between three and eight years old. But the market for used vehicle spare parts is growing in Germany. Accordingly, the range of used parts at ClaimParts has increased by 40 percent from 3.2 to 4.5 million parts since April 2024, also due to the addition of additional suppliers. The residual value exchange green.casion was also able to increase the number of connected certified recyclers from 8 to 20. Some motor vehicle insurers are examining the alternative marketing of total losses with proof of recovery.
“The development makes me positive. We hope that many more insurers will follow our example,” says Sommerfeld. In addition to the more energy-intensive material recycling in vehicle production, the reuse of used spare parts in the sense of a second life is becoming increasingly socially acceptable. If a used spare part is available, vehicle owners are free to decide whether they agree to the installation of a used part. According to an Allianz survey, 89 percent of consumers would accept having their vehicle repaired using used, but fully intact and certified spare parts. This high level of approval in the survey has been confirmed in practice. “Every second customer we spoke to, whose vehicle could be repaired with used spare parts, decided on a sustainable repair,” says Sommerfeld.
High repair costs are depressing
In recent years, the development of private motor vehicle insurance has proven to be very challenging. Because insurers are struggling with above-average repair costs after accidents. The prices for car spare parts alone rose by an average of 6.2 percent between August 2023 and August 2024. In the previous year, prices had increased by an average of 9.7 percent.
But it’s not just the rising costs of spare parts that are driving up insurers’ costs. The hourly rates in vehicle repair shops also rose significantly last year, as shown by an evaluation by the General Association of the German Insurance Industry (GDV). “Work on mechanics, electrical systems or the body cost an average of 188 euros per hour in 2023, and painting work even cost 205 euros. Both prices rose by 8.6 percent compared to the previous year,” says GDV Managing Director Jörg Asmussen.
The higher hourly rates and rising spare part prices are leading to increasing repair costs for insurers after accidents. “Last year, car property damage cost motor vehicle liability insurers an average of around 4,000 euros, which was 8.6 percent more than the previous year,” explains Asmussen. In 2017 this value was around 2,700 euros.
Repair cars with used spare parts
The aim is to counteract this development with used spare parts. If a used spare part is available, vehicle owners are free to decide whether they agree to the installation of a used part. According to an Allianz survey, 89 percent of consumers would accept having their vehicle repaired using used, but fully intact and certified spare parts. This high level of approval in the survey has been confirmed in practice. “Every second customer we spoke to, whose vehicle could be repaired with used spare parts, decided on a sustainable repair,” says Sommerfeld.
The used parts market has been functioning for a long time in many countries. Used parts have been used for collision repair in the United States and Sweden for over 25 years. England, the Netherlands and France have followed this example in recent years and have promoted the trade and repair of used spare parts, including through the introduction of legal requirements. There is already workshop experience in repairs, used parts portals and logistics solutions that have proven themselves in practice. “We also need a legal framework in Germany to drive this development forward more quickly. Only together can we manage to put undamaged parts to a useful new use,” says Sommerfeld. If there is sufficient availability of used spare parts in Germany, including for younger model series, Allianz is planning a vehicle tariff that includes the use of available used parts.
The Munich-based insurer currently offers repairs with used spare parts through over 1,400 partner workshops. Around 25 exterior parts such as doors, front and tailgates, but also mirrors, headlights and taillights would be used. Meanwhile, safety-relevant parts such as steering, axle parts or wheels are not used. Around ten percent of real total losses are particularly suitable for the GreenPart process. Since the vehicles have to deliver undamaged spare parts, most of the completely damaged vehicles are no longer available as donors. As a result of the storm “Radha” at the beginning of June 2024, many vehicles were totaled due to flooding without any external damage. In total, Allianz was able to donate 62 customer vehicles with around 1,200 parts as spare parts donors.
The recycler checks the function of the used part and, as with new parts, takes it back in the event of a justified complaint. The repairs were carried out professionally in the partner workshops. “Our customers receive a one-year guarantee on the used spare part – the same guarantee as for a repair with new parts,” says Sommerfeld.
But let’s pause for a moment. Used parts? We’re talking about scavenging like it’s the 21st century equivalent of a treasure hunt, aren’t we? “Ahh, look at this delightful door from 2015, still in decent condition!” If only my ex-partner could be so well-preserved…