Rental terms (LOR) continued to trend downward in the first quarter of 2024, but remain higher than pre-pandemic levels due to challenging market conditions, according to Enterprise’s latest U.S. rental terms report.
Collision-related rentals for the quarter were 17.6 days, down 1.1 days from the first quarter of last year.
“Traditionally, LOR declines in the first quarter of each year, and that trend continues,” the report said. “LOR shows steady decline from post-COVID-19 highs of 18.7 days in Q1 2023 and 18.2 days in Q1 2022, but still 1 quarter (13.3 days) and the first quarter of 2020 (13.2 days),” the report says.
This decline is consistent with repair shop backlogs over the same period, Crash Network Newsletter Editor John Yoswick said in a report.
“On a national basis, the average backlog in January hit a two-year low with less than four weeks left,” Yoswick said. “This is nearly two full weeks down from the high of 5.8 weeks in Q1 2023. However, the average backlog remains the same for January 2020 (2.1 weeks) and January 2021 (1.6 weeks). It remains significantly higher than during the same period.”
Work-in-progress (WIP) is also decreasing, Yoswick said. He said this could be a sign that parts-related issues are easing. WIP is measured by comparing the number of jobs your shop is processing to its normal number of jobs.
He said work-in-progress at an average of 550 stores in March represented 57% of normal monthly sales.
“This was 11 points lower than the previous quarter and 8 points lower than the year-ago period,” Yoswick reported.
According to Greg Horn, chief innovation officer at PartsTrader, the median part delivery time also decreased in the first quarter.
PartsTrader uses median delivery times and two standard deviations to track delivery times and the impact of outliers, Horn said in the report.
“We compared our results for the median part delivery data for Q1 2024 to our Q1 results for the past three years,” Horn said. “Median delivery time for all parts in Q1 2024 decreased by 1.9 days overall compared to Q1 2023.”
He added that median delivery times have not returned to 2021 levels.
“There is no single factor – no single manufacturer, union strike, or port bottleneck. While the industry has struggled to reach pre-pandemic production and delivery levels, we are still We’re not there,” Horn said.
LORs for drivable, inoperable, and total loss claims all decreased in the first quarter, the report said.
The smallest decline in drivable claims was for rental periods in the first quarter at 15.8 days, down 0.3 days from the same period last year.
The LOR for inoperable claims in Q1 2024 was 25 days, down 2.5 days from Q1 2023.
During January, 33% of stores said they could schedule work within two weeks, Yoswick said. This is similar to the rate tracked in the last quarter of 2023, he said. However, this rate is 20 percentage points higher than during the same period in 2023, when 13% of stores were able to schedule new work within two weeks.
“Traditionally, the first quarter is the busiest time of the year, and in our eight-year history of tracking backlogs in terms of ‘who pays for what?’ It’s a busy time. “Our research shows that the backlog never decreased from October to January,” Yoswick said. “That is because the reduction in the backlog This is even more dramatic than the 1.3 day decrease (compared to Q4 2023) reflects. ”
Ryan Mandel, director of claims performance at Mitchell International, said calibration frequency in 2024 increased to 21.35% in January 2024, compared to 15.10% in January 2023. He added that calibration adds time to the repair process.
The LOR for all property and casualty claims in Q1 2023 also decreased by two days to 16.4 days.
Mandel said the number of repairable claims in the first quarter of 2024 decreased by 0.87% overall compared to the first quarter of 2023. It said this was due to mild weather conditions in the first quarter and a “cooling” in the used car market.
The used car market increased the total loss frequency from 20.1% in Q1 2024 to 20.8% in Q1 2023. The overall total loss market value decreased by 1.95% in Q1 2024 compared to Q1 2023.
At the state level, West Virginia had the highest overall LOR at 21.8 days, an increase of 0.6 days from Q1 2023. North Dakota had the lowest LOR at 13.1 days, down 1.5 days. Three states saw increases, including West Virginia (0.6), Maine (0.2), and New Mexico (0.2). The largest decrease was in Washington state, at 2.3 days.
When it comes to drivable claims, Rhode Island had the highest LOR at 19.3 days. Twenty-two states saw an increase in driving likelihood, with West Virginia having the highest increase of 1.6 days to 17.6. North Dakota had the lowest drivable LOR at 10.4 days. California had the largest decrease in driveable miles, with a decrease of 1.2 days.
West Virginia also had the highest non-driveable LOR at 33.2 days. Vermont was the only state to see an increase. It rose by 1.1 days to 27.5 days. The lowest non-driveable LOR was in DC at 20.6 days. South Dakota had the largest decline, dropping 6 days to 24.7.
In terms of total loss LOR, West Virginia had the highest at 20.1 days. Vermont was the only state with an increase of 0.9 days to 18.8 days. North Dakota had the lowest LOR (14.4 days), while Montana had the largest decrease (8.1 days) to 15.8 days.
A high LOR can result in higher out-of-pocket costs for policyholders if the policy limit is exceeded.
Colorado has proposed a bill that would increase rental car prices by up to $3 a day, potentially increasing that spending even further.
Passed by the Colorado Senate SB184 The House Transportation, Housing, and Local Government Committee referred the bill to the House on April 23, and the House referred the bill to the Appropriations Committee on April 25.
According to KKTV, the bill would collect a $50 million or 20 percent down payment for Front Range Passenger Rail. The news station reported that state officials plan to request a grant from the United States to fund the remaining projects.
“The possibility of the federal government paying for up to 80% of the project is incredibly exciting, and it’s one of the most important factors in funding large-scale infrastructure projects like this,” Senate President Steve Fenberg told KKTV. It will bring about change.” “Colorado is just one of two projects that were not only accepted, but rapidly advanced to a more advanced stage of the grant process. We feel we are in a very good position to acquire it.”
According to KKTV, Sen. Kevin Van Winkle posted a video opposing the bill.
“Senate Bill 184 expands government, imposes daily fees on rental cars in the state, and uses these funds to build a multibillion-dollar new rail network in the Front Lines. That’s what we’re aiming for,” Van Winkle said on KKTV. “While the idea of a front-line subway may seem appealing to some, Coloradans cannot afford the cost of such a project, especially amid the ongoing affordability crisis. We can’t afford it…Senate Bill 184 is just one of many bills Coloradans can expect to see that would impose high fees on Coloradans to fund this project. Dew.”
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Photo courtesy of IJzendoorn/iStock
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