Significant rise in fuel system damage
CarGarantie issues latest claims spread evaluation
CG Car-Garantie Versicherungs-AG, one of Europe’s leading and most experienced warranty and customer loyalty specialists, has evaluated its in-force business statistics and can now provide an insight into its findings. With over 2.1 million warranty agreements and more than 23,000 contract partners, CarGarantie counts among the most reputable specialist insurance companies in Europe.
The evaluation was conducted on the basis of 688,824 expired used car warranties and 251,593 expired new car extended warranties with a duration of 12, 24 and 36 months and comprised every brand and model.
High technical complexity leads to high repair costs
The intricate equipment incorporated into a modern vehicle greatly enhances the comfort of the driving experience: auxiliary and safety features not only help the driver to keep track of everything at all times and keep a keen eye on the traffic but also consistently alert and sound warnings when a potentially dangerous situation arises. Even components that rely very little on automated processes are becoming ever more intricate, require finer tuning, and increasingly incorporate safeguard systems.
These benefits to the driver in terms of comfort are a source of higher costs in the workshop: the increased complexity not only raises the propensity for damage to occur but also the scale of the repairs. CarGarantie’s evaluation has revealed that average repair costs have remained stable. They amount to 502 euros per claim.
In the case of used cars, the engine continues to rank highest among the costliest damage claims, with its share rising from 21.7% to 22.9%. There has been very little change among the parts ranking second to fourth against the previous year (Fig. 1): behind the engine, in second place, comes the fuel system (turbo-charger included), followed by the transmission in third place (2015: fourth) and the electrical system in fourth place (2015: third).
Where new car extended warranties are concerned, it is a different story. Here, the fuel system (turbo-charger included) has overtaken the engine to top the rankings at 20.2%, an increase of 7.3 percentage points compared to 2015. This means that damage to the fuel system accounts for more than one-fifth of the settlement sums paid out for new vehicles (Fig. 2). Thus, the share of costs not only exceeds the comparably low share recorded in 2015 but also that of the preceding years by some considerable margin. Ranking second, behind the fuel system, is the engine with a 15.8% share, followed by the transmission, in third place, which rose by over three percent to 13.7%. The electrical system came in fourth at 11.4%.
Fuel system the most damage-prone component
The fuel system also dominates the rankings in terms of claims frequency this year. In used vehicles, it saw an increase of 0.3% to 19.6% and therefore kept its top ranking. With a 17.7% share, the electrical system is a non-mover in second place. The engine and comfort electrics rank third and fourth with 10.9% and 10.4% respectively (Fig. 3).
Greater shifts were apparent among new vehicles compared to last year: with a share of 21.6% (2015: 15.0%), the fuel system ranks first among the most damage-prone components (Fig. 4). The share of damage claims among the parts that follow in the rankings has also risen significantly to some extent: in second place, the electrical system saw a rise of 0.8 percentage points to 17.5%, whilst the cooling system jumped 3 percentage points to 11.3% (third place). The share of claims for comfort electrics rose by 0.2 percentage points to 7.7% (fourth place).
New cars: damage even to low-mileage vehicles
The statistics on damage claims by mileage show that very little has changed among used vehicles compared to last year: at 31.7%, the share of used vehicles requiring warranty work during the first 5,000 km has remained unchanged.
This is in contrast to new vehicles: here, vehicles with up to 25,000 km on the clock saw an average increase of around two percent in each category (Fig. 5). All told, 31.7% of these vehicles required warranty work before reaching the 25,000 km mark.
This trend is reversed when it comes to damage by number of days. Only minor shifts were recorded among used vehicles: 81.8% of all damage occurred in the first year (2015: 81.5%). The opposite is the case among new vehicles, however: whilst 57.3% of all required warranty work occurred during the vehicle’s first year in 2015, this share dropped to 48.9% in 2016 (Fig. 6). As far as mileage is concerned, the damage is therefore arising earlier, but in terms of time it is occurring later on average.
Axel Berger, CarGarantie Chairman:
“Vehicle repair costs remain on a high level, as the latest damage evaluation clearly shows. This is, above all, due to the increasingly complex nature of vehicle technology, which, whilst making many things easier for the driver, also results in high costs in the event of a claim. It is therefore definitely advisable to safeguard against these costs, not just where used vehicles are concerned but also for new vehicles. A used car warranty or new car extended warranty offers benefits for all concerned: for customers, as they can guard against unexpected repair costs, but also for car dealers, as they will not only increase their garage work but can also offer additional quality that can go a long way to enhancing customer satisfaction and customer loyalty. With over 45 years’ experience, CarGarantie is a dependable partner for warranty and customer loyalty solutions. We constantly endeavour to find the perfect solution for every single one of our partners.”