NU Online News Service, Aug. 3, 12:21 p.m. EDT

The average cost of vehicle collision repairs in the second quarter declined by 3 percent compared with the same 2008 period, a data and solutions provider reported.

San Diego-based Mitchell International Inc. said the decrease was due to recession-related factors.

The company said its numbers reflect “the aging vehicle fleet and lower actual cash value that the current economic conditions have caused.”

Older cars on the road mean that cheaper used and remanufactured parts could be used for repairs, explained Greg Horn, Mitchell’s vice president of industry relations.

He said that typically, policy language for newer cars require that within certain time limitations–generally 12 months–only new and dealership parts may be used for repairs.

According to Mitchell, its systems data show the average initial appraisal for a repair in the second quarter was $2,391–down by $81 from $2,472 in 2008′s second quarter.

Mr. Horn said after an initial appraisal, the follow-up damage appraisal for cars generally runs about three percent higher. Using this “development factor,” Mitchell said the average damage appraisal on a slightly older vehicle is now $2,452.

The final repair cost, not including deductibles (average gross collision appraisal value) in the second quarter was $2,729, or three percent less than last year, but Mitchell said with the development factor it comes up with a gross collision appraisal value of $2,802–identical to the same quarter in 2008

Mitchell’s report said that at $11,995, the average actual cash value of vehicles appraised for collision losses during second-quarter 2009 reflects the aging vehicle fleet and lower ACV that the current economic conditions have caused.

For comprehensive losses, such as storm damage or theft of a radio or airbag, the average gross appraisal was $2,320–a $118 decrease compared to $2,438 in second-quarter 2008. Applying the development factor for this data set produces an adjusted value of $2,374–a decrease of $64 from the same quarter in 2008, Mitchell said.

The decrease is likely due to the fact that hail storms causing damage were of modest severity, driving down the overall average for the second quarter of 2009, the firm speculated.

Mitchell said the initial industry average gross third-party property damage appraisal for damage caused by an insured driver was $2,156–compared to $2,222 in 2008–a $66 decrease.

Adding the “development factor” for this coverage type results in an adjusted appraisal value of $2,194–an overall $28 decrease or 1 percent from the same period in 2008.

In 2009, the second quarter average property damage appraised vehicle actual cash value was $10,741–”one of the lowest ACVs we’ve seen on third-party vehicles in years–again showing the aging of the average vehicle on the road in the U.S. today,” the report said

Mitchell said that while average part costs have gone up by 1 percent and paint material is up by 5 percent, repair labor costs have gone down by 2 percent.

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