Members of the Vehicle Builders' and Repairers' Association are being advised to negotiate their way out of unprofitable approved repairer contracts for the sake of their own survival.
Ron Nicholson, VBRA director-general, warned that the provision of free extras, such as courtesy cars and free delivery, were an unfair burden imposed by insurers.
He said that recent mergers between insurers were also creating uncertainty and had resulted in some vehicle repairers losing up to 40% of their approved business overnight.
Nicholson said: "Insurance companies, as financial institutions, are obliged to gain the total benefits of the economies of scale created and part of that process is the streamlining of their approved repairer networks."
He continued: "Some repairers have accepted revised contracts with a promise of additional volume, but others have seen their agreements terminated."
