The UK courtesy car history started nearly 28 years ago when a number of larger body shops competing for work from the main insurance companies in the UK, offered loan cars as a way to build the work given to them. Initially these were cars owned by the car body repairers, utilising their used car sales stock were possible, so holding costs were relatively low, some body shops in those early days tried to make small charges for them when they could, but more and more were offering them to the Insurance companies FREE OF CHARGE.
Shortly after with the cat out of the bag the market exploded in a way unseen in the industry, Body shops needed more and more cars as the insurance companies also started to manage their damaged vehicles better by streaming them in to chosen car body repairers in return for higher discounts and of course the increasing burden of free loan cars from the Body shops.
This momentum started to get notice by the UK car manufacturers and car leasing companies and started offering courtesy car leasing.
Around this time I was working for Hartwell Motor Contracts as a maintenance controller authorising work to the mechanical and bodyshop industry, having a good understanding and relationship with repairers, I was asked to move across into a new role selling loan cars on courtesy car leasing to crash repairers.
I can remember the explosion happening at the time we were supplying 10 to 20 cars a month on 4 month contracts, very quickly numbers grew to over a hundred a month, supply of enough new cars from the manufacturers became a problem.
The administration of these 4 month contracts, became an absolute nightmare, bearing in mind these were the days of mainframe computers and cumbersome paper trails , in many cases vehicles files were still being processed when the cars had returned and been sold on. The need for longer contracts became quickly apparent and so began the 12 month contracts, as time went on the 18, 24 and 36 months contracts have become more common and today even 48 month contracts are offered by way to reduce the costs.
At the time there was maybe only 3 or 4 car leasing companies actively involved in this sector, Hartwell being one of the larger and so started to gain the attention of other Bodyshop industry leaders such as the MVRA, Bodyshop Magazine and various Paint suppliers, we worked closely with these companies promoting exclusive schemes to their members attending their conferences and trade shows. These relationships with industry leaders and the need for large volume from the manufacturers helped drive down the pricing for courtesy cars history and the infamous £99.99 per month was born.
Numbers were still growing rapidly, systems and process’s getting slicker, I can remember the landmark volumes, 150, 200, 250 300 a month, then a new problem arose what do we do with all the cars when they started coming off contract, we were already negotiating with Citroen & Nissan for 1500 units each a year. This was a problem the need for longer term contracts was required as the margins on courtesy car deals where so slim if swift onward movement of the cars at contract end was not achieved it started eating away any of the profits. The different length of contracts allowed the smooth ebb and flow into the used car market.
Body shops now not only feeling the pinch of the cost of providing courtesy cars also realised its benefits and average fleet sizes of cars also started going through landmarks 3, 5 8 10 15 cars and so on. Looking to various alternatives to manage need with cost, splitting their fleets with Lease, daily rental and owned vehicles.
We also started to see the emergence of very large body shops and motor groups with fleets ranging for 150 to 500 courtesy cars, in some cases larger than many daily rental company fleets.
The longer term contracts being offered received a split reception from Bodyshop owners, some preferring to stick with the shorter term period as nervousness about the longevity of courtesy car existence or favouring younger cars on fleet. Whilst others started taking cars over 18, 24 and 36 month contracts, favouring longer stability and reducing costs on sign marking the vehicles and some splitting their fleets with short and longer term contracts.
At its peak there were broad estimates of over 80,000 courtesy cars in the industry and with these volumes of cars re entering the used car markets it started hitting used car values, which had the effect of driving the courtesy car market pricing into the £130 a month bracket and also manufacturers becoming very protective of their product after seeing one or two wobbling from the effects of returning courtesy cars. Some even as I recall not getting very excited about 200 or 300 car orders favouring smaller ones of 50 to 100 here and there with different model mixes.
Pricing has always been very sensitive in the industry for body shops as not only has the cost of courtesy cars been a burden the Insurance companies have suppressed their chargeable hourly rate to them, evidence of this is seen in other sections of the motor industry, mechanical repairers (garages) hourly rates use to be similar and now they are in many cases double that compare to the body repairers (in some cases much more) the commodity control of repairable vehicles, new legislation, repair techniques, safer vehicles and write off levels has caused a massive pruning of repairers over the years as body shops go out of business by the squeezed margins or loss of contracts. Some figures show that as much as two thirds of body shops from 20 years ago have disappeared.
But we still need cars and we will still go on crashing them and many feel the sector has levelled and starting to rise, so fingers crossed.
Over the years since the peaking of rentals at £130, pricing has fluctuated reacting to market conditions back down to the £99 and as high as £150, and today the £99 can be achieved and when you consider the timescales on courtesy cars its quite incredible pricing remains so low with all the inflationary factors.
We have seen in the car leasing industry over the years many mergers and closures and Hartwell was one of those and nearly 15 years ago I was made redundant and started my own brokerage still supplying courtesy cars to body shops and expanding into other business and personal sectors.
To obtain these rentals the courtesy cars are strongly discounted by the manufacturer, its seen as a very useful marketing tool to have their product driven and tested by many people as they have their cars repaired who will hopefully go on to purchase one and the rentals offered to body shops reflect this and aren’t achievable to any other sector.
However we have seen over the years as the manufacturers started controlling the volumes to the body industry on class A cars, the arrival of the SPECIAL OFFERS MARKET, these are cars the manufacturers may have an oversupply of or maybe wish to promote a new model or an outgoing model and offer to contract hire funders or brokers like us to commit to a volume and produce a special offers that we in turn can offer to our customers and prospects data to promote.
We have also become sales partners for some of the top car leasing funders in the UK offering in addition to our own formulated deals some of the very best in the market for both bodyshop, business and personal users
You can find these deals
Courtesy car supply is still and integral part of our business, and whilst the bodyshop industry has contracted and now started to grow, other areas of courtesy car use has also been growing, mechanical repairer are taking on cars not to necessarily hand out to end users but as modes of transport as many offer a collection and delivery service, one driver would drive a car and leave it at the customers home to collect the car needing a service and then return. Dropping the need for 2 drivers to go and at a cost of just over £4.00 a day makes sense.
Also car recovery agents will send out a car so the end user can go on with their day and the recovery unit can then be scheduled in to recovery the vehicle later, making the process more efficient and cost saving.
I hope you have found my account on courtesy cars history interesting if you wish to comment or object to anything I have written please e mail me.