Already faced with difficult issues, many shop owners are wondering what more will be asked of them by insurers and how they’ll continue to please increasingly critical customers. They question how other shop owners are running their businesses and dealing with day-to-day issues.

This year’s Operations Profile answers a lot of those questions, including "Are shop owners turning work away?", "Are they compromising their labor rates?" and "Is Elvis really dead?" (I just threw that one in to see if you’re paying attention.)

What effect do alternative crash parts have on the following procedures relative to OE parts?
	CAPA-certified	A/M Salvage
Increase administrative time	88.3%	88.4%
Decrease administrative time	11.7%	11.6%
Increase installation time	88%	76.8%
Decrease installation time	12%	23.2%
Increase paint refinishing time	91.5%	84.5%
Decrease paint refinishing time	8.5%	15.5%
Increase total cycle time	89.5%	82.3%
Decrease total cycle time	10.5%	17.6%

Which insurers refuse to pay? Respondents listed Allstate, State Farm, Progressive, Geico, Farmers, Natiowide, USAA and Liberty Mutual most often. Many respondents were less specific and simply said "all."

• 100 percent of respondents say vehicle owners have an unequivocal right to know when A/M crash parts are used to repair their vehicles.

• 78.3 percent of shop owners say it’s the body shop’s responsiblity to inform the owner when A/M or salvage parts are used.

• 95.1 percent say they educate customers regarding their rights.

• The average shop writes 24.8 estimates per week.

• 67 percent of written estimates are converted to jobs, which translates into about 16 jobs per week.

• 41 percent of respondents say insurers reduce times on estimates less than 25 percent of the time.

Things are looking good! Compared to last year, 52.2 percent of respondents say the average number of jobs performed per week has increased.

Though 55.2 percent of all shops polled are concerned about DV, only 47 percent of DRPs are concerned while 60.3 percent of non-DRPs are concerned.

Those who are concerned cited the following reasons:
• "I don’t like some non-DRP shop criticizing my body work for monetary gain."

• "Any time you have a rush job, it cuts quality."

• "This is another area where the insurance companies are using shop owners as scapegoats and not taking responsiblity."

• "Pre-accident condition doesn’t call for A/M parts."

Those who aren’t concerned cited these reasons:

• "I can’t say I know what the term means."

• "That’s between the vehicle owner and insurance company."

• "If a vehicle is repaired properly, there’s no loss of value."

Of those shops using …
• OE crash parts, 88.3 percent of their repair orders include them.

• A/M crash parts, 67.4 percent of the repair orders include them.

• non-CAPA-certified crash parts, 30.2 percent of their repair orders include them.

It’s not surprising then that shop owners say OE crash parts fit the best: 95.2 percent provide an acceptable fit. On the other hand, respondents reported that only 55.5 percent of CAPA-certified A/M crash parts provide an acceptable fit and 45.7 percent of non-CAPA-certified A/M crash parts provide an acceptable fit.

When CAPA-certified parts don’t fit well, 70 percent of respondents say insurance companies never pay for re-fitting the parts, while 10.3 percent say they pay half the time and 2.8 percent say they always pay.

Of those shop owners who responded yes, an average 2.5 jobs per week were turned away. Why are 62.5 percent of shop owners turning away work? Some of the reasons listed include:
• "Too busy."

• "Don’t have enough technicians to do the work."

• "Customers ask to save their deductibles."

• "Insurance payments are too low to perform the necessary repairs."

• "Jobs aren’t profitable."

• "Vehicle owners want less than an excellent repair."

• "Some repairs involve too much work."

• "Anticipate collection problems."

Of those shops polled, the average posted labor rate is $36.52. Those same shops report the average "prevailing" insurance rate in their area is $35.62.

Why are 47.1 percent of shops compromising that labor rate? Some respondents noted:
• "That’s all the insurance companies will pay for and changing that requires ‘going to war.’ "

• "Because of contract, DRP work."

• "To get the job we had to accept the insurance rate, which was $2 less."

• "A customer had no insurance coverage and we felt sorry for him."

• "We lowered the rate to compete with other shops’ estimates."

• "Business was slow."

• "The car was a near total, so we reduced the rate to save the job."

• "We needed the work; my employees have to feed their families."

Will diminished value (DV) have a positive or negative effect on the industry? This year, 48.1 percent of respondents say DV will have a negative effect, which is almost identical to last year’s figure (48.6 percent). However, 18 percent of this year’s respondents say it will have a positive effect and 33.8 percent say it will have no effect. Last year, more than 27 percent said it would have a positive effect and 24.3 percent said it would have no effect. Why do shop owners feel the way they do? Positive: • "It will force shops to perform correct repairs or leave the business." • "Insurers will have to pay to return cars to pre-loss condition." Negative: • "Insurers will push the problem on body shops." • "If DV is considered, it could total out cars that could be repaired." • "You can’t return a car to pre-loss condition." No effect: •"If you repair a car properly, DV isn’t an issue." • "Most insurers will factor that into their costs." You May Also Like CIF Announces CCC Intelligent Solutions as Repeat Annual Donor Deadline for Busch Memorial Scholarships Approaching Body Bangin’: Stand Out in a Consolidator’s Market with John Shoemaker Body Bangin’: Can Loaner Vehicles Be Another Revenue Stream? Uncategorized Protect Your Shop from Cyber Crimes with Mark Riddell Micki Woods interviews Mark Riddell of m3 Networks Limited on what auto body shops can do to protect themselves from a cyber attack. By BodyShop Business Staff Writers Published: January 17, 2024 Micki Woods, master marketer for collision repair shops and owner of Micki Woods Marketing, has released the latest episode of "Body Bangin'," the video podcast that is taking the industry by storm! In this episode, Woods interviews Mark Riddell, managing director of m3 Networks Limited, about how auto body shops are looked at as small businesses and easy prey for cyber attackers and what they can do to protect themselves and their customers' data. Read Full Article More Uncategorized Posts Body Bangin’: The Disengagement Epidemic with Kevin Wolfe Micki Woods interviews Leaders Way Owner Kevin Wolfe on why 73% of work professionals are disengaged today and what we can do about it. By BodyShop Business Staff Writers January 3, 2024 Body Bangin’: I Thought We Were Doing It Right with Josh Piccione Micki Woods interviews Josh Piccione on repairing vehicles correctly — according to manufacturer guidelines. By BodyShop Business Staff Writers December 12, 2023 Body Bangin’: Be a Star Not a Hamster with Robert Snook Micki Woods interviews popular keynote speaker Robert Snook on how to differentiate and grow your business. By BodyShop Business Staff Writers November 28, 2023 Body Bangin’: Know Me, Know My Car with Mike Anderson Micki Woods interviews Mike Anderson on the importance of building an emotional connection with your customers. By BodyShop Business Staff Writers November 15, 2023 Other Posts Body Bangin’: Fighting for Consumer Safety with Burl Richards Micki Woods interviews Burl Richards on his personal mission to fight for consumers’ rights and safety. By BodyShop Business Staff Writers October 17, 2023 Body Bangin’: The Employer-Student Disconnect Micki Woods interviews Raven Hartkopf, lead collision instructor at Collin College in Texas, on what students want from a shop employer. By BodyShop Business Staff Writers October 3, 2023 Body Bangin’: Why Follow OEM Repair Procedures? Micki Woods interviews Logan Payne of Payne & Sons Paint & Body Shop on the importance of following OEM repair procedures. By BodyShop Business Staff Writers September 19, 2023 Body Bangin’: Getting Paid for Calibrations Micki Woods interviews Andy Hipwell and James Rodis of OEM Calibration on how to get started doing ADAS calibrations. By BodyShop Business Staff Writers September 6, 2023 Accessibility Privacy Policy Terms of Use Copyright Babcox Media Inc. All rights reserved