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Buying Into the DRP Scam

3/1/2008


I continue to read with amazement article after article and letter after letter illustrating how DRP agreements are bringing the collision repair business to its knees, yet shops continue to mindlessly buy into this scam – not only agreeing to ramp up the volume but to do it at reduced prices! Since it’s commonly known that many of us won’t be around in a few years, it makes absolutely no sense for us to blindly follow the Pied Piper off the cliff.

“Work smarter” is what we’re routinely told, which actually means process more and more vehicles at less and less profit while we invest heavily in the equipment and training to do so. Getting paid fairly for what you do is working smarter, too, but that’s a concept that seems to be lost on many of us. Our industry is like a lifeboat that’s sinking. Some of us are bailing water and some of us are drilling holes as fast as we can. The hole drillers will eventually sink our boat, and the few remaining survivors will be on their own at the mercy of the sharks.

DRPs are presented to us as “partnerships,” but just imagine the following: A gentleman comes into your office one day and has a proposition for you. He has many clients that pay him a monthly retainer to handle things should they ever be involved in an automobile accident. He wants to be your “partner” and these are his terms:

1. He will supply all the customers for your business.
2. You will absorb most of the administrative costs to process his claims, including personnel, software and training.
3. You will never be paid all that you have coming. Your new partner makes his money not only on the monthly fee he charges his customers but on all that you save him as well.
4. You will do what you’re told when you’re told.
5. Should there be any problems that arise, you will be completely responsible.
6. Should you anger your “partner” by not working fast enough or cheaply enough, or should the quality of your work decline because of his conditions, all your business will be directed to someone more agreeable. You won’t be on his “list” any longer.

You would throw this guy out of your office immediately!

The feeding frenzy has gotten so bad that customers are telling me that their insurance companies are telling them that even though they don’t want to take their vehicles to the DRP shop, the insurers will pay no more than what they would have in a DRP arrangement. “Usual and customary” and “prevailing rates” were bad enough, but now there is an attempt being made to force concessions even in the absence of any agreement. Therefore, those of us who are attempting to manage our businesses as businesses are facing a preemptive disadvantage. Where will it all end?

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