The nonlife insurance industry said Wednesday that it has launched a project to induce a cut in repair costs for import cars.
Dealers of import cars have long been under criticism for not publicizing prices of auto components. As a result, consumers and insurance firms had to bear quite high expenses for car repair.
Since early January, the General Insurance Association of Korea ― in coordination with automobile (or nonlife) insurance firms ― has been looking into the optimum level of auto parts and repair costs for import cars.
They have forged a task force, which is aimed at normalizing the financial statuses of auto insurance firms through exact calculations of import car repair charges.
“There has been no obvious standard for import cars’ component prices. The task force is seeking transparency in the import car industry,” said an official of the association.
The high price of car parts, which led to an increase in repair charges overall, is another complaint among Korean consumers.
In a report by the Korea Insurance Development Institute last year, automotive parts of import cars were shown to be 6.3 times more expensive than those for Korean cars.
When it came to costs for maintenance, there was a 5.3-fold difference in prices between import and Korean cars, the agency found.
Amid growing complaints, some insurance firms and import car dealers have already launched a movement to cut insurance premiums.
Samsung Fire & Marine Insurance agreed last year to cut insurance premiums on repair charges by up to 20 percent with local dealers of Mercedes-Benz and Audi.
“Insurance premiums grew during 2009 and 2010 but the industry had been increasingly pressured to lower it with more complaints from customers,” said a spokesman of Samsung Fire.
Other major insurers such as Dongbu Insurance, Hyundai Marine & Fire Insurance and LIG Non-Life Insurance followed the move with Benz and Audi.
A dealer for Peugeot vehicles said it has lowered repair charges by an average of 10.5 percent following the previous 3.9 percent cut after the Korea-EU Free Trade Agreement went into effect in July 2011.
“Their movement comes amid the situation that foreign carmakers are focusing on better after-sales service as a key strategy to lead the market amid high competition,” said a spokesman of an import car brand.
By Kim Yon-se (firstname.lastname@example.org