Current Used Vehicle Market Conditions: Q1 2020
After a strong start to 2020 in January and February, the COVID-19 crisis wiped out gains in wholesale prices in virtually all categories.
Total Loss Trends Emerge Amidst the Pandemic
Every industry has been impacted by actions taken to control the spread of COVID-19, including the automotive industry. Growing unemployment, coupled with a pivot to remote working, has changed consumer priorities and curtailed car-buying habits. The decline in miles traveled has also resulted in less wear and tear on vehicles, thereby reducing the replacement rate. Additionally, like many other manufacturers, some automakers temporarily closed or repurposed plants to produce ventilators and personal protective equipment. They also closed dealer showrooms to protect employees and the public. Amidst the COVID-19 response, these and other changes in market dynamics are giving rise to new emerging total loss trends.
Reduce In-Person Interactions and Improve Efficiency with Virtual Claims
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In March, Ryan Mandell, director of Claims Performance for Mitchell’s Auto Physical Damage business unit, identified the market drivers converging to make the concept of claims virtualization a reality.
COVID-19 Ripple Effect on Auto Insurance Market
After months of sheltering in place, it should come as no surprise that claims volumes are down. COVID-19 has impacted markets around the globe, and has produced ripple effects in the auto insurance market that are influencing many aspects of the claims ecosystem—from the global supply chain to workflows to the car parc itself. So what does this mean for collision repair and the claims industry as a whole? Three early indicators have already emerged that could have a long-lasting impact.
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Over the past several months, the Mitchell | Genex teams have been closely monitoring the developments surrounding COVID-19 and the CDC’s recommended travel guidelines.
The Realization of Claims Virtualization
Five years ago, if someone mentioned “claims virtualization,” it most likely referred to an insurance carrier’s mobile application, or possibly just conjured visions of VR goggles used for high-tech simulations. These days however, the idea of virtual claims handling, or as Lexis Nexis1 defines it, “photo or video estimating in which no insurance employee physically inspects the vehicle,” has firmly taken hold with touchpoints from First Notice of Loss to Total Loss and all points in between.
The Impact of Calibration Needs on Collision Repair
With the increasing ubiquity of Advanced Driver Assistance Systems (ADAS), comes the increasing need for systems to be properly calibrated to ensure proper functionality after a repair has taken place. In many instances, calibrations are required simply because there is damage in the general area of a particular component, even if it wasn’t directly impacted by the collision event.