The firm’s UK managing director is preparing for increased salvage as escalating costs make vehicle repairs uneconomic
Jane Pocock, UK managing director at salvage and remarketing business Copart, is preparing the organisation for a boom in business as a result of Brexit – she told Insurance Times that potential delays and rising costs in the repair chain post Brexit could see more insurers turn to salvage as a more economic option.
“All the published data that I look at is showing labour costs going up in the repair chain, parts going up in the repair chain, paint going up in the repair chain, so they’ve all got to be imported as well now,” she explained.
“There’s generally a concern in the repair sector around potential delays and cost, so we have an internal strategy for managing more cars if they come into the salvage sector because repair is either now not possible or not economic.
“We have an internal working group to handle any additional volume we might get as a result of some Brexit blips.”
Although eyeing potentially more salvage business once the UK leaves the European Union (EU), on the whole, Pocock is not concerned that Brexit will impact Copart’s operations.
This is, in part, because the organisation’s patented online auction site, which sells total loss or recovered stolen vehicles for insurers, has a global reach – approximately 6,000 bidders based in 113 countries participate in around 16 to 17 auctions a week.
David House, UK head of marketing at Copart, said: “We haven’t seen a massive shift in where vehicles are going; they are still predominantly staying in the UK and EU, but those markets are being forced to bid more for vehicles that you would say economically they probably would not if we were just relying on the UK market.
“Economists [are saying] that it is that breadth of buyer base that companies will be able to lever the opportunities that Brexit brings and mitigate the challenges, and we would be a lot more concerned if we were just reliant on a UK market base.”
Pocock added: “Being a US company has allowed us to be a little more insulated from Brexit and because of the global reach of the auction, it’s meant that we benefit from currency fluctuations as well, so our view is if the pound is devalued any further, it will just drive up bidders from other countries.”
Pocock further labelled Brexit as the next economic downturn, which typically hits the market every 10 years or so. Despite this, Pocock remains confident of Copart’s buoyancy.
She said: “Everyone’s got a concern and, rightly so, [Brexit is] on everyone’s risk register.
“We ride the storm basically. We’re quite insulated, and that’s another comfort to the insurance market. It’s a 10-year dip and we’ll come out the other side, probably in a stronger position.”
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