Radio New Zealand - Te Reo Irirangi o Aotearoa

Fears deal could force panelbeaters out of business

Updated at 7:57 pm on 3 November 2008

A car repair group says an insurance company's new partnership agreement with Auckland panelbeaters could cause their businesses to fold.

The Collision Repair Association says the Automobile Association's Insurance plan will affect panelbeaters' profits.

The chairman of the Collision Repair Association, Wayne Houghton, says he believes AA Insurance has introduced the agreement to cut costs because of the economic downturn.

Mr Houghton says car repairers have had to cut their work costs to win panelbeating contracts with the insurer.

He says the contractors are further affected by AA Insurance's charges of no more than a 5% mark-up on new parts and 20% increase for second-hand.

He believes some panelbeating companies could be forced to close in time if other insurance companies follow AA Insurance's example.

However, AA Insurance says the plan is to ensure customers receive a quality and cost-effective service.

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