Loaner cars that were never used cost ICBC millions: documents

ICBC employees fired after kickback allegations A CTV News investigation suggests some of the financial mess that's pushing ICBC premiums higher comes from problems inside the corporation. Jon Woodward reports.

An internal analysis found B.C.’s public auto insurer has been shelling out millions for loaner cars that were never used.

And a plan by ICBC to rein in the spending was proposed as part of the attempts to douse what the province's attorney general has called the agency’s financial "dumpster fire," but was never enacted, CTV News Vancouver has learned.

The plan would have saved about $9 million per year across the province – a small fraction of the $1 billion a year that are expected to be saved from other big-ticket changes at ICBC this year, said Attorney General David Eby.

“We said, ‘Let’s plug the biggest holes in the ship first and we can start working on the smaller holes,’” Eby said.

The agency is still considering changing the loaner car program as part of a larger plan to revamp the services, he said.

In 1997, ICBC introduced the Alternative Transportation Service program, which paid body shops $8.68 for every hour they spent working on a car.

The body shops were then to use that money to pay to maintain a fleet of courtesy cars. The program is unique in North America, according to an analysis by E&Y.

The program’s costs are rising, from $23.8 million in 2014 to $29.2 million in 2018, according to ICBC figures.

A briefing note obtained by CTV News Vancouver says “approximately 40 per cent of the Alternative Transportation Fees that were paid were not linked with the utilization of a courtesy vehicle.”

That’s a problem, said David Black, the president of MoveUp, the union that represents workers at ICBC.

“The driving force should be what is in the interests of the motoring public,” he said. “Are they getting the best value for money? If the answer is no, they should stop doing it.”

That’s what ICBC proposed in a suite of changes in 2017. The agency planned to reduce the cost from $8.68 per hour to $8.05 per hour, and only pay the fees if a courtesy vehicle is used.

Those changes would have saved about $9 million a year.

But the briefing note pointed out there would be stiff opposition from industry groups that would see a key portion of revenue evaporate.

“The most significant risk associated with this initiative is pushback from industry and industry associations,” the briefing note says.

It’s not fair to say that just because a vehicle wasn’t used, a service wasn’t provided, said Adrian Skovell of the Automotive Retailers Association.

“There’s more to the program than that. Sometimes they need to drive people back and forth. They put them in a taxi. There’s more to it than the use of a vehicle,” Skovell said.

Craftsman Collision maintains a fleet of 600 vehicles across its operations, paid for by the program, said President Rick Hatswell.

“We use brand new Toyota Corollas, Hyundai Elantras,” he told CTV News. “We have these vehicles available for our customers at any time.”

He said sometimes customers don’t get a vehicle – but that’s often balanced by customers who have a vehicle for more time than their repair would justify.

“The only time we would get money on the ATS program is if the customer doesn’t take a rental and we give them a ride home. That could be a taxi or a bus ride,” he said.

He said cutting the program would be a big financial hit.

“That would be a big problem for us. If the rate was reduced, we’d have to reduce our fleet to compensate for that,” Hatswell said.