Foreign cars popular, but repairs priceyImported cars are becoming more popular in Korea with their high-tech performance and savvy design, but an Insurance Development Institute report should make you think twice before plunking down the cash for one: Accident repairs cost three times more than for domestic brands.
According to the report, insurance companies paid an average of 2.61 million won ($2,300) per claim for imported cars in 2011, compared to domestic cars’ 846,000 won.
In 2011, insurers paid 263,294 claims for foreign cars, which accounted for 5 percent of the total number of claims but 12 percent of the amount paid, the report said. Fire and marine insurance companies such as Samsung, Dongbu and Hyundai paid out 642 billion won to fix imported cars.
Not only are repair expenses for foreign automobiles expensive, but parts were higher than Korean-made cars. According to the report, the average annual cost for repairs involving foreign auto parts was about 1.85 million won, which was five times more the 346,000 won for repairs involving domestic parts. The average labor charge per year stood at 284,000 won, more than double what was charged for domestic cars.
The report said that unlike domestic cars, there is no pricing standard for imported cars which allows repair shops to charge whatever they want.
The Fair Trade Commission recently investigated foreign car dealers and the Korea Automobile Importers and Distributors Association, while the General Insurance Association of Korea formed a task force to find a solution for high imported car repair costs.
By Joo Kyung-don [email@example.com]
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