Overview of UK paint market for Bodyshop repairs – key drivers, opportunities and risks for insurance companies

Written by Matthew Parker, Managing Director at Procurato 

As paint costs continue to rise, both insurance companies and bodyshops are feeling the strain. What was once a routine part of car repairs has become an expensive challenge. For insurers, the increase in paint costs means higher claims payouts, which can quickly add up, especially with more extensive damage.  

According to our research, the cost of paint has been increasing over the last 4 years with a 30% increase, which, in turn, has impacted the costs of repair for insurance companies with paint costs typically representing 25% of motor repair costs. 

Analysing and understanding the paint cost for repairs for UK insurance companies remains complex due to the distribution and commercials structures in place. Procurato’s analysis of insurance companies paint costs suggest that paint contributed to a circa 8% of overall motor repair cost increase from 2020 to 2024. 

This article analyses the underlying paint costs and, using Procurato’s insights, explores and evaluates the commercial structure of how paint is supplied and distributed for UK insurance companies, highlighting the key drives as well as opportunities and risks for insurance companies with clear recommendations on how to reduce paint costs.  

Understanding these trends and cost drivers is crucial to adjust to a constantly changing market and respond to the changes efficiently, evaluating all the options. 

Underlying Cost of Paint  

The cost of paint is influenced by several key factors, including raw material costs, manufacturing and processing, labour costs, regulatory compliance, packaging and distribution, and R&D and innovation expenses. Among these, raw materials are the most significant cost driver, accounting for approximately 50-65% of the total cost of paint. 

Given their substantial impact, we will begin by examining raw materials in detail. The four primary components that make up the cost of paint are pigments, resins and binders, solvents, and additives. Table 1 below provides a breakdown of the percentage cost allocation for each of these components, highlighting the critical role raw materials play in determining the overall price of paint. 

Cost Breakdown of Automotive Paint Materials 

Component	Percentage of Total Cost
Resins & Binders	40% – 50%
Pigments	20% – 30%
Solvents	15% – 25%
Additives	5% – 10%

Table 1: Cost Breakdown of Automotive Paint Materials Source, Procurato, 2025 (Based on industry estimates and formulations used in the UK market). 

1. Resins & Binders (40%–50%)

The most cost-intensive component, resins determine paint adhesion, durability, and gloss. Polyurethane and acrylic resins are widely used, with pricing influenced by oil markets and chemical manufacturing trends.

• Trend: Stable to slight increase

• Analysis: Polyurethane (PU) resins dominate the automotive paint market, holding a 44% share. Their superior durability and adaptability have maintained their demand. While raw material prices have fluctuated, advancements in resin technologies have helped stabilize costs.

2. Pigments (20%–30%)

These colouring agents define the paint’s visual appeal. Titanium dioxide, a key white pigment, has become increasingly expensive due to EU tariffs on Chinese imports. Metallic and pearlescent pigments have also seen price hikes.

• Trend: Moderate increase

• Analysis: The demand for high-quality pigments, especially those offering vibrant colours and special effects, has risen. This increased demand, coupled with environmental regulations limiting certain pigment chemicals, has led to a moderate uptick in pigment costs.

3. Solvents (15%–25%)

Solvents dissolve paint components and control viscosity. Water-based paints use fewer solvents than traditional solvent-based options, reducing this cost segment over time.

• Trend: Decreasing

• Analysis: The shift towards waterborne paints, which now control 67% of the automotive paint market revenue, has reduced the reliance on traditional solvents. Waterborne paints use water as the primary solvent, significantly lowering volatile organic compound (VOC) emissions and costs associated with solvent procurement.

4. Additives (5%–10%)

These include UV stabilizers, anti-sag agents, and hardeners. Though a small cost component, their impact on paint performance is significant.

• Trend: Increasing

Over the past four years, approximately 90% of paint costs have remained stable, with only additives experiencing significant price increases. However, comprehensive data on the exact percentage increase in additive costs during this period is limited. Notably, in 2021, certain additives like silica matting agents saw price surges of up to 58%. This suggests that while the majority of paint components have maintained stable pricing, specific additives have contributed to overall cost escalations.

We can draw a conclusion that the raw material costs have not been the key contributing factor to increases in paint costs.

Other than raw materials that account for between 55-65% of the total cost, other key components being manufacturing and processing, labour costs, regulatory and compliance, packaging and distribution and R&D (see the breakdown below), which we are going to explore further.

Cost Breakdown of Automotive Paint Manufacturing (Percentage of Total Cost) 

Cost Component	Percentage of Total Cost	Notes
Raw Materials	55% – 65%	Pigments, resins, binders, solvents, additives
Manufacturing & Processing	15% – 25%	Production, mixing, blending, quality control
Labour Costs	5% – 10%	Skilled workers for formulation, packaging
Packaging & Distribution	5% – 10%	Containers, shipping, warehousing
Regulatory & Compliance	1% - 5%	Environmental laws, safety standards, VOC compliance
R&D & Innovation	1% - 5%	Development of eco-friendly & high-performance paints

Table 2: Cost Breakdown of Automotive Paint Manufacturing, Procurato, 2025 (Based on industry estimates and formulations used in the UK market). 

1. Manufacturing & Processing (15% – 25%)

• Utility costs for production facilities.

• Amortisation of Capex manufacturing equipment

• Floor space costs for manufacturing lines

• Equipment and production consumables

• Quality control & testing

Trend: Stable costs with technological advancements

The integration of automation and advanced technologies has optimized production processes, maintaining stable costs despite increasing demand.

2. Labour Costs (5% – 10%)

• Direct headcount working within the production line.

• Fringe headcount supporting production, e.g. quality, maintenance, planning, logistics, and management teams.

Trend: Gradual increase

Rising wages and the need for specialised skills in handling advanced technologies have led to a slight increase in labour costs.

3. Packaging & Distribution (5% – 10%)

• Industrial-grade cans, containers, and labelling.

• Shipping costs, affected by fuel price fluctuations.

Trend: Variable costs influenced by external factors

Fluctuations in fuel prices and supply chain disruptions have caused variability in packaging and distribution costs.

4. Regulatory & Compliance (1% – 5%)

• Environmental regulations on VOC emissions (waterborne paints help reduce costs).

• EU & UK safety standards for hazardous chemicals.

  
  

Important note: Regulatory and compliance costs are amortised into a broader “company overhead” or, more specifically, within “Sales, General, and Administration (SG&A).”

Trend: Increasing costs

Stricter environmental regulations have necessitated investments in eco-friendly formulations and compliance measures, contributing to higher costs.

5. R&D & Innovation (1% – 5%)

• Development of low-VOC, waterborne, and eco-friendly paints.

• Advancements in self-healing coatings and nanotechnology-based paints.

Important note: Research and development is typically carried out at the OEM or Paint Manufacturer level. While these costs are factored into pricing, their visibility as a portion of the final price is minimal for anyone outside the company conducting the R&D.

Trend: Increasing investment

The focus on developing sustainable and high-performance paints has led to increased R&D expenditures.

While raw material costs have fluctuated, and packaging and distribution costs have been affected by external factors, the shift toward eco-friendly and advanced technologies has impacted other cost components.

These factors, however, make up a smaller proportion of overall costs. In Procurato’s view, these elements do not fully explain the increases in paint costs seen by insurance companies, but we are going to uncover the actual cost driver further in this article by focusing on how the paint pricing is formed by estimating platforms and how the pricing is calculated, taking into account the complexity of the market supply chain.

Pricing Calculations in the UK Bodyshop market and Estimating platforms 

What is driving paint pricing? To answer this, we first need to understand how estimating platforms work and the role insurers play in shaping pricing. These platforms act as the central mechanism for setting retail paint prices, incorporating manufacturer adjustments and applying standardised inflation rates. Meanwhile, insurers and bodyshops navigate a complex supply chain where discounts, margins, and incentives all influence the true cost of paint. 

Estimating platforms 

Paint pricing in the UK bodyshop market is complex. A leading estimating platform uses an average retail price for paint, calculated from paint suppliers’ retail prices and adjusted for market share. When a paint manufacturer changes its price, this update is fed into the estimating platform and applies to all future estimates for all customers. The estimating platform is the main driver of retail pricing, and it uses a single rate of inflation, which means an increase from one manufacturer can raise prices for all, regardless of the manufacturer. 

Procurato’s insight 

There is typically no pushback on price increases from paint manufacturers, meaning the estimating platform is not questioning manufacturers’ price increases. While the estimating platform’s use of a single inflation rate might be seen as a downside, it is generally beneficial for insurers when it comes to subrogation.  

How paint pricing is calculated in the supply chain 

The calculation of paint pricing in the insurance motor repair supply chain follows a clear path.  

In the insurance motor repair supply chain, different parties buy paint at a discount from the manufacturer’s retail price, with each part of the chain adding a margin until the final retail price is reached in the estimating platforms. Below is an example: 

• The distributor buys paint at 25% off the Manufacturer Retail Rate. 

• The bodyshop buys paint from the distributor at 40% off the Manufacturer Retail Rate. 

• The insurer agrees to pay around 80% of the retail price to the bodyshop. 

• The estimating platform is then set at 100% of the manufacturer’s retail rate. 

Table 3: Paint Pricing Calculations in Motor Supply Chain, Procurato, 2025.  

Despite rising costs, repairers/bodyshops and insurance companies often receive rebates and incentives from paint suppliers, which can help offset some of the financial burdens.  

These incentives are typically based on purchase volume and loyalty, rewarding bodyshops and insurance companies that maintain consistent relationships with suppliers. However, these programs make it difficult to fully understand the true cost of paint to an insurance company. 

Are Insurance Companies Driving Costs of Paint Up? 

Insurance companies play a crucial role in shaping the cost dynamics of bodyshop repairs, as their policies and reimbursement rates directly impact how bodyshops manage paint costs. 

When paint contracts are renegotiated with bodyshops, it often leads to an increase in labour rates, as the margin from paint is used to cover bodyshop overheads. As a result, optimising paint usage tends to be more beneficial than renegotiating rates. Similarly, a lower labour rate can be offset by higher paint margins, which reduces the incentive for bodyshops to minimise paint usage. 

If an insurance company mandates a specific paint supplier and receives rebates, the bodyshop may not benefit from lower rebates and may have to manage multiple paint suppliers or distributors. 

In Procurato’s view, insurance companies do, in fact, influence paint costs. However, if they do impact the costs, are there any opportunities which insurance companies can benefit from and risks which they can address effectively, using the situation to their advantage? We are going to explore this in the next section of the article to give you the best practical advice on how you can approach cost control, cost reduction and optimisation all in one go. 

Opportunities and Risks for Insurance Companies 

There are several opportunities insurance companies can explore. However, these opportunities come with their own set of risks that need to be carefully considered and integrated into the company’s overall market strategy, ensuring that any changes made align with the broader objectives. 

Opportunities 

1. Reduce Paint Waste

• Improve Mixing Accuracy – Collaborate with bodyshops to use digital scales and automated mixing systems to ensure precise formulations, reducing overuse. 

• Use Efficient Spray Techniques – Encourage the use of HVLP (High Volume Low Pressure) spray guns which reduces overspray by up to 30%. 

• Train Painters Properly – Encourage bodyshops to invest in training skilled workers to ensure proper paint application, minimising waste and reducing rework. 

Potential Savings: 10-20% reduction in paint waste. 

2. Use Paint Recycling & Recovery Systems  

• Solvent recyclers – Work with bodyshop’s to use solvent recyclers. Reusing cleaning solvents can reduce solvent costs by up to 80%. 

• Work with bodyshops to implement paint reclaim systems – Capturing and reusing excess paint can significantly cut costs. 

Potential Savings: 5-10% reduction in material costs. 

3. Invest in energy efficient spray booths and use of infrared curing lamps  

• Look for modern bodyshops that have invested in modern paint booths which are more energy efficient than older spray booths and can save significant expenditure, considering current high energy costs.

• Infrared curing lamps may also be an option to dry paint faster, reducing booth cycle times with lower energy costs compared to traditional heated spray booths. 

Potential Savings: 15-30% reduction in energy costs. 

4. Optimise commercial agreements with paint manufactures and distributors 

As mentioned earlier in the article, this approach could potentially increase paint costs. However, if you decide to move forward, consider maximising the benefits by leveraging your scale, tendering the process, and linking rebate agreements to offset any increases in the retail costs of paint. 

Risks 

1. Investment by bodyshops 

   
   

Ways to save money often require upfront investment by bodyshops. However, without the certainty of long-term contracts and consistent work that ensures an adequate return, bodyshops may be hesitant to invest in new equipment. 

2. Subrogation 

   
   

Reducing paint costs can impact subrogation income depending on your model. This should be factored into your modelling for any initiatives. 

3. Current Commercials 

   
   

A bodyshop may be making more margin on paint to offset a labour rate or parts discount. Make sure you are analysing total commercial models when working with or negotiating with bodyshops. 

4. Rebate Agreements 

   
   

Rebate agreements between insurance companies and bodyshops may contribute to increases in the retail cost of paint. Additionally, if an insurance company is receiving such an agreement, it leaves the bodyshop with less margin when using the insurer's preferred supplier, putting pressure on other areas of the repair costs. 

Conclusion 

The UK paint market for bodyshop repairs is in a state of flux, influenced by various economic, environmental, commercial and technological factors. While raw material costs have remained stable, these other elements contribute to rising paint prices, but they don't fully explain the increases insurers are seeing. 

We recommend that insurance companies undertake a total cost analysis when analysing paint costs considering things such as rebates, labour rates, market movements in material costs, subrogation, technology advances paint processes and estimating approaches. Key opportunities to reduce paint costs include optimizing paint usage, implementing recycling systems, investing in energy-efficient equipment, and leveraging scale in rebate agreements.  

Taking a holistic approach will ensure you get maximum results. This analysis should consider how insurance companies work and contract with bodyshops if there is long term investment needed to secure some of the opportunities identified in this paper. 

If you would like to better understand you paint costs of a full analysis of your repair costs Procurato can offer a full opportunity assessment to fast track your Claims Performance Improvement

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Author’s Bio 

Matthew Parker 

Matthew is a leading insurance professional with over 20 years in the industry. He has held leadership roles at renowned companies such as RSA and WTW and has overseen +20 insurance clients’ projects in the past two years at Procurato. Specialising in end-to-end claims performance improvement strategies for both personal and commercial lines, Matthew has delivered multimillion-pound savings, optimized supply chains, and brough operational efficiencies to claims processes.