PLUMMETING residual values have sparked an increase in vehicle write-offs for fleets as the cost of repairing damaged cars dwarfs their market value. Fleet managers are being warned they face increased insurance costs to cover the problem, which is caused by the growing amount of hi-tech safety equipment being fitted to vehicles.

According to a Market Facts and Business Information report 'UK Car Body Repair Market' the average cost of an accident and body repair will rise by 19% by 2006 from £930 to £1,110. Fleet vehicles account for a quarter of all body repairs at 1.5 million out of a total repair market of 5.9 million repairs last year, valuing the total market at £5.52 billion.

The report added: 'While many car manufacturers have reduced the cost of accident repair parts, such as panels and bumpers, the increasing proliferation of air conditioning, power steering and more sophisticated electronic systems in later vehicles will cause average repair costs to rise. Falling residual values on used cars are also having an impact on the accident repair market, while falling resale values combined with rising repair costs has resulted in an increase in the number of damaged cars being written-off by insurance companies.'

It adds that up to 30% of repairs at some bodyshops are write-offs, despite repair being possible. The report highlights vehicles that have the highest repair costs by examining more than 6,000 invoiced repairs. Research revealed that Toyota was the most expensive, with an average repair cost of £1,136, compared with an overall average repair cost for all makes of £932. Other makes with high average repair costs include Mercedes-Benz, Peugeot, Mazda and BMW, while makes with low average repair costs include Fiat, Ford, Nissan, Honda and Vauxhall. Fiat is lowest, with an average repair costs of £829, a 37% difference between the highest and lowest cost.