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July 30, 2015

by Patricia Harman

3 Key Things That The Insurance Industry Needs To Know About Aluminum Vehicles

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New fuel efficiency standards in the U.S. are a driving force in requiring auto manufacturers to improve the miles per gallon for cars and light-duty trucks rolling off of the assembly lines in the next few years. By 2016, vehicles are required to reach 35.5 mpg and by 2025 that number should reach 54.5 mpg. Regulations for medium- and heavy-duty trucks will also require improved fuel efficiency and a reduction in carbon pollution for model years 2021-2027.

How will manufacturers achieve these more fuel efficient numbers? A number of ways including the use of hybrid engines, greater use of start and stop technology, more efficient air conditioning compressors and more electric power steering according to Susanna Gotsch of CCC Information Services.

One major way to shed some significant weight and increase mpg will be the use of more aluminum in cars.

Manufacturers like Ferrari, Audi, BMW, Honda, Lotus, Mercedes, Aston Martin and Range Rover are creating completely aluminum cars or using it for body panels and hoods. Others are using aluminum parts for fenders, trunks and liftgates.

The Aluminum Association says that manufacturers like the lighter weight material for its strength and environmental advantages. While steel is still the most used material in vehicles, aluminum comes in at a strong second, with almost 90% of it able to be recycled at the end of a vehicle’s life.

As manufacturers make the shift to more aluminum vehicles, this will also change how and where vehicles involved in an accident will be repaired. According to Dan Young, senior vice president of insurance relations for CARSTAR, there are anywhere from 34,000 to 36,000 collision repair shops in the U.S. “Those shops are fixing cars for an industry that is worth $30 billion and they are all vying for this work.”

Not every shop is equipped or has technicians trained to work on aluminum vehicles. “There is a great deal of cost that a shop has to be willing to invest to get into this aspect of the business,” adds Young. “They have to get certified to work on wholly aluminum vehicles, have separate tools and work areas, and that can cost several hundred thousand dollars.” Because of cross-contamination issues, aluminum cars cannot be worked on in the same area as steel cars because the aluminum particles will wear down the steel.

Young says that there are different training requirements depending on the manufacturer. Audi, Jaguar, Land Rover and BMW require technicians be trained to work on their aluminum vehicles. Those currently trained to work on steel vehicles will have to be retrained to work on aluminum as well. I-CAR, the Inter-Industry Conference on Auto Collision Repair, has developed training courses recognized by many manufacturers and is working with insurers to educate appraisers, adjusters and technicians on what is involved in repairing these new vehicles.

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