German insurer Allianz to allow use of used parts in auto repair

The Allianz insurance company will allow cars in Germany to be repaired with used spare parts, the Munich-based insurance giant said on Friday.

Vehicles between three and eight years old are eligible under the scheme, which should make repairs both more environmentally friendly and cheaper, the insurer said.

The DAX-listed company and largest German insurer referred to England, the Netherlands and France, where there have already been regulations promoting the use of reusable parts in car repair shops for several years.

"All experts agree: repairing is more sustainable than using new parts," said Frank Sommerfeld, head of Allianz Versicherungs-AG, which operates the property insurance business in Germany.

The source of the spare parts will be cars that have been totalled and are often sold abroad to be cannibalized. Allianz wants to reuse parts such as doors, bonnets and boot-lids, as well as mirrors, headlights and rear lights.

"Safety-relevant parts such as steering systems, axle parts or wheels will not be used," said Sommerfeld.

As an example, Sommerfeld cited replacing the windscreen of a VW ID.3 would cost €1,200 ($1,290) less with a used part than a new one.

According to the Allianz Centre for Technology, CO2 emissions would be almost 100% lower in this example.

This is due to the fact that greenhouse gases are produced during the production of car parts, which naturally do not occur again when installing a used replacement part.

German motor insurers have been suffering from rising costs for years, which are largely caused by the high prices of new spare parts.

The German Insurance Association expects the industry to post another billion-euro deficit this year, as its income does not cover what it spends.