Insurers are driving small crash repairers out of business with unfair policies, the ACT's peak motor trade body claims.
Motor Trades Association ACT president Michael Bourke said many local shops were struggling to stay afloat because insurance companies were unfairly preventing people from choosing their repairers.
He said customers were also losing out, as in some cases cars were towed as far as Sydney when closer repairers were available.
"Down the track we will have a lack of really good qualified tradesman because we are losing many of our small smash repair businesses as insurance companies open up their own shops or send people to their preferred ones," Mr Bourke said.
"One insurance company was transporting cars up to Sydney because their local repairers on the books were unable to cope with the work, when there were others that could have handled it."
Late last year, Chapman resident Phil Pharnell copped damage to his car's rear panel in a minor car crash. He said the NRMA towed it to Wagga Wagga to be fixed because local shops were apparently snowed under.
"It was ridiculous," he said.
While NRMA policy allows customers to nominate their own repairer for a quote - unlike some insurers - Mr Pharnell said he was not given this option while making his claim.
An NRMA insurance spokeswoman said it did not record how often cars were sent interstate for repairs, but it was "exceptionally rare... because of the additional time and cost involved".
The NRMA has seven repairer partners in ACT. The spokeswoman did not detail how these partnerships benefit the NRMA.
Owner of Marko Body Repairs Canberra, Ante Nazor, knew of a handful of "small-to-medium" shops forced to shut in recent years because insurers were muscling-in on the crash repair industry.
"Canberra's car repair network is becoming smaller and smaller," he said.
"We need insurance companies to be more transparent. Customers tell us these companies only look beyond their repair network if a customer escalates it and complains - if they're happy to wait six weeks when it could take two, they'll leave it."
David Hand Smash Repairs owner Thomas Hand agreed, saying he was very rarely contacted by insurance companies for a quote.
"They definitely do push customers where they want and don't tell them when there's a choice."
In 2014, the NSW government launched a parliamentary inquiry into the relationship between insurance companies and smash repairers. Among other issues, it looked at how insurers were driving small businesses bankrupt for the same reasons expressed to Fairfax Media.
A car insurance repair industry code of conduct was introduced in May 2017, but is mandatory only in NSW.
Mr Bourke called for the code to become compulsory Australia-wide. He also pushed for the establishment of a motor ombudsman to independently assess costs and decisions behind insurance-backed repairs.
The Insurance Council of Australia's communications manager, Campbell Fuller, said the reasons behind growing consolidation in the industry were complex.
He said insurers had been forced to evolve their approach of relying on preferred repairers due to the rapidly changing trade.
"Safer vehicles have led to fewer crashes, while rapid advances in vehicle construction and technology have put pressure on repairers to make significant investments in new equipment and staff training," Mr Fuller said.
"Some smash repairers struggle to meet these challenges, and do not always able have the equipment and expertise to deliver the quality of repairs required by insurers, resulting in substantial consolidation within that industry."
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