More than a fifth of bodyshops could close in the next five years as their profits are squeezed by declining repair volumes and cost pressures, according to Trend Tracker.

The UK car population has increased 18% in the last decade, but the number of repairs rose just 1% in the same time.

By comparison, total losses have increased 86% since 1998, and without theft, glass or personal injury these now account for 24% of claims.

SMART repairs have created further downward pressure on work volumes, costing them half a million repairs each year, the report adds.

As a result, the number of bodyshops has declined 36% to an estimated 4,010 and Trend Tracker predicts a shortfall in the capacity from 2010 onwards.

Robert Macnab, of Trend Tracker, said: “The cost will be partly carried by bodyshops themselves, whose insurance company customers insist on them providing courtesy cars, and partly by the at-fault drivers whose insurers face courtesy car bills from credit hire firms, in the form of increased premiums.”