There will be a decline of over one-fifth in the number of bodyshops over the next five years, leading to seasonal shortfalls in repair capacity as soon as 2010.

This shortfall could lead to more business for credit hire firms, higher repair costs for at-fault drivers’ insurance companies, and higher incident costs for self-insured fleets.

The predictions are contained in the 2008 edition of the biennial mfbi study The UK Car Body Repair Market.

There are now just 4,010 specialist body repairers in the UK – 36% fewer than a decade ago.

The number operated by franchised dealers has declined faster, from 2,200 to just 870 today.

This declining number of repair shops is also struggling with tighter margins, fewer cars to repair and a greater willing ness by insurance companies to write off cars.

While the UK car population increased by 18% between 1998 and 2008, the number of collision repairs has risen by only 1%.

It is predicted that the number of repairs carried out this year – to 5.78m vehicles – will be less than those carried out in 1999.

Annual total losses declared by insurance companies increased by 86% between 1998 and 2008, to a total of to 0.79 million, representing 17% of all motor insurance accident damage claims – 24% if claims for theft, glass and personal injury are deducted.

This trend is accounted for by a combination of expensive-to-repair car technology and the vehicle depreciation that has accompanied an increasingly competitive car market.

This willingness has deprived bodyshops of work, as have the 500,000 dent repair jobs each year that have migrated to SMART (Small to Medium Area Repair Techniques) specialists.

Trend Tracker analyst Robert Macnab says, “While this will mean more drivers are likely to wait longer for their cars to be fixed, the cost of more courtesy car use during the wait will most often be borne by the insurer of the at-fault driver – or by self-insured fleets.

“The problem will boost demand for credit hire firms, but it is only in the winter peak demand period that it will be apparent, as accident repair is a highly seasonal business.”

Current average repair costs of £1,175 are only 3% higher than a decade ago in real terms, and Mr Macnab does not believe seasonal repair capacity shortfalls are likely to drive them up in the near future.

“Motor insurers ultimately risk a bigger problem if too many bodyshops go out of business, but so long as their supply problems only appear in the winter months, they will continue to prefer an increase in courtesy transport costs to paying bodyshops more per hour throughout the year.”