UK repair market enters new era

Taking to the ARC360 stage in May, Paul Sell, Director of Trend Tracker, delivered a keynote that questioned many of the assumptions the industry has traditionally held about growth, demand and long-term sustainability. While operational metrics may suggest a market that has found a degree of stability following years of disruption, Paul argued that a series of deeper structural forces are quietly reshaping the future of vehicle repair.

The message was clear: the industry is being redefined and anyone servicing the sector needs to be aware and prepared to adapt in order to win.

At face value, the market appears relatively healthy. Insurance repair volumes have remained broadly stable over the past two years, cycle times have shown little movement and, compared to the volatility experienced during and immediately after the pandemic, many businesses could reasonably conclude that a new equilibrium has been reached.

However, Paul suggested that focusing solely on operational performance risks missing the bigger picture.

Interconnected trends

Beneath those headline figures sit a series of interconnected trends that are beginning to alter the very foundations of the repair sector. Consumer affordability pressures, changing attitudes towards vehicle ownership, advances in vehicle safety, an ageing vehicle parc, electrification and wider geopolitical uncertainty are all influencing the way vehicles are repaired, insured and ultimately valued.

Individually, none of these factors are new. Together, however, they are creating a market that looks very different to the one many have built their businesses around.

“If I look at insurance repair volumes for the last two years, it’s pretty stable,” Paul told delegates. “Surely this is the ‘new normal’. So, what’s the problem? The problem is that these operational metrics can hide quite a lot of strategic disruption.”

Affordability

Perhaps the strongest theme running throughout the presentation was affordability.

While discussions around the future of repair often focus on vehicle technology, artificial intelligence or electrification, Paul argued that consumer spending power may prove to be the most influential force of all.

Over the past decade, the cost of purchasing a new vehicle has risen dramatically. Many of the UK’s most popular models now command prices that would have seemed unthinkable only a few years ago, while leasing and longer PCP agreements have become the norm as consumers seek ways to spread rising costs. Alternatively, consumers are deciding to keep their cars for longer, resulting in a struggling new car market.

The impact extends far beyond the showroom.

Insurance premiums remain under pressure, repair costs continue to rise and the traditional relationship between vehicle ownership, insurance and repair is beginning to shift.

Paul highlighted a striking statistic. Today, the average motor insurance premium is approaching the same level as the average policy excess – around £550. For motorists involved in a fault claim, that can mean more than £1,000 in direct costs before repairs even begin.

It is a reality that is influencing behaviour across the market.

Consumers are becoming increasingly selective about when they claim. Some are choosing retail repair routes. Others are simply questioning whether a repair is economically worthwhile at all.

For insurers, the challenge is equally significant.

Vehicle complexity is driving claims severity upwards, yet affordability limits how far premiums can realistically increase. As Paul explained, insurers now find themselves caught between rising costs and consumers who are becoming increasingly sensitive to price.

“The affordability ceiling is becoming the constraint on the whole ecosystem,” he said.

Reduced vehicle collisions

The conversation then turned to another uncomfortable reality for the repair sector. For more than three decades, society has been systematically reducing the very thing the industry relies upon: vehicle collisions.

Advances in vehicle safety, the widespread adoption of ADAS technologies, stricter testing standards (NCAP) and policy initiatives such as the expansion of 20mph urban zones have all contributed to a reduction in accident frequency and severity. The result is undoubtedly positive for motorists and society, but it inevitably affects repair demand.

Data presented during the session showed long-term reductions in road casualty numbers across multiple categories, reinforcing the effectiveness of both vehicle and road safety initiatives.

The challenge for repairers is that fewer accidents inevitably mean fewer opportunities.

At the same time, the vehicles entering workshops are becoming increasingly different from those repaired even five years ago requiring new approvals, new skills and new relationships to repair them.

Ageing vehicle parc

The UK’s vehicle parc is now older than at any point in its history. More than two-thirds of vehicles on UK roads are over six years old, while almost a quarter are now over 13 years old. Conversely, only around 15% are under three years old.

That shift matters because repair frequency is heavily influenced by vehicle age.

Newer vehicles are far more likely to generate insurance-funded repairs. Owners are more inclined to claim, vehicle values remain higher and finance agreements often make repairs essential. Older vehicles, by contrast, increasingly fall into a grey area where repair costs and vehicle values are moving closer together creating increased write-offs.

Paul described this as one of the most important dynamics shaping the future demand for the repair market.

As the number of older vehicles grows, repair opportunity does not necessarily grow alongside it. In fact, the opposite may be true.

“The likelihood of that vehicle coming through your repair centre goes down,” he explained. “That could be because the consumer doesn’t want to use their insurance, or it could be because they’re written off.”

Electrification

Electrification is adding another layer of complexity.

Although electric vehicles still account for a relatively small proportion of total repair volumes (12%), they are disproportionately represented among newer vehicles and therefore among insurance repairs. Data presented during the session showed that more than 85% of EV repairs involve vehicles under three years old, with over a quarter less than a year old.

While the industry has made significant progress in developing EV capability, challenges remain around repairability, battery assessment, parts availability and overall repair economics.

The growing number of vehicle manufacturers entering the market further complicates the picture – providing great choice for consumers but adding complexity for repairers.

Chinese brands, in particular, are beginning to exert increasing influence. New entrants are arriving with highly competitive pricing, rapid product development cycles and technology-rich vehicles that are already beginning to reshape consumer expectations.

For repairers, that means learning new repair methodologies, navigating unfamiliar parts supply chains and investing in broader technical capability. For insurers, it means underwriting risk in a landscape with less historical data and greater variation in repair outcomes.

Changing nature of repair

Yet perhaps the most significant insight from the keynote was not about vehicles at all. It was about the changing nature of repair itself.

Historically, collision repair has been driven by labour. Technical skill, workshop efficiency and local repair networks have formed the backbone of the sector for decades. Paul believes that model is changing.

Modern repair decisions are increasingly influenced by diagnostics, software, data, algorithms and capital investment. Before a technician picks up a tool, decisions are already being shaped by vehicle data, insurer workflows and increasingly sophisticated digital systems.

“The repair decision is becoming more technological than mechanical,” he said.

That shift raises important questions about where influence will sit in the future.

Will large capital-backed repair groups gain advantage through investment and scale? Will OEMs strengthen their control as vehicles become increasingly software-defined? Will insurers reshape claims ecosystems through technology and automation? Or will data platform providers become the key decision-makers within the repair journey?

Prepared to adapt

The answer remains uncertain. What appears far more certain is that the businesses which thrive will be those prepared to adapt.

For repairers, that means developing deeper relationships with clients and acknowledging their needs, whilst understanding the changing mix of vehicles entering the market and investing in the skills and technologies needed to support them. It means embracing EV capability, calibration, diagnostics and technical expertise. It may also mean making difficult decisions around specialisation, scale or collaboration.

For all the challenges outlined during the presentation, Paul’s closing message was ultimately one of opportunity.

The repair market remains a multi-billion-pound sector attracting significant investment and innovation. Repairers have to successfully position themselves as trusted technical partners – rather than simply the ‘the cheapest’ – to take the opportunity in the market and occupy a far more influential position within the wider ecosystem.

“The future winners won’t be the cheapest repairers,” he concluded. “They’ll be the most trusted technical operators.”

The future may not look like the past, but for those prepared to embrace change, there remains significant opportunity ahead.

To find out more visit: www.trendtracker.co.uk/become-a-subscriber/

Supported by Corporate Partners Allscreens, BASF, e2e, Exclusive Repair Network, iBodyshop, Mirka, NWVA, Prasco UK, Repairify, S&G, Sherwin-Williams, Solera Audatex and Spire Drive, alongside sponsors Partly, Silverlake Automotive Recycling and Thatcham Research; as well as  Industry Body Partners AutoRaise, MIB, NBRA and Trend Tracker; and Vehicle Manufacturer Partner Stellantis, ARC360 2026 attracted close to 400 key persons of influence from across the UK vehicle repair and motor claims sector.