Body Shop Repairs: Customers Pay Their Portion

Body Shop Repairs: Getting Customers to Pay for Their Portion

We have two completed jobs in our shop that have been done for a month now, but the customers aren't paying for their portions of the repairs. Can we charge late fees? What other options do we have?

How can we get customers to pay for their portion of the repairs? We have two completed jobs in our shop right now that have been done for a month now. The customers aren’t paying for their portion of the repairs, so we’re stuck with two vehicles taking up real estate in our shop. Can we charge late fees on the unpaid balances? What other options do we have? 

Your question is one that’s being asked more frequently these days as many insurers are taking aggressive steps to limit their payouts to improve their bottom line profitability. This is forcing more repairers to seek recovery from their customers directly…or not.

I believe the answer you seek lies in you determining just who it is you view as your true customer: the insurer or the vehicle owner. Also, what steps you’re willing to take to protect your own business’s future.

If you’re working on behalf of insurers and rely solely upon DRP agreements, your choices will be limited to what the insurer allows you under the terms of your agreement. In that situation, I can’t offer a recommendation and would encourage you to seek legal counsel.

If you’re an independent repairer who may have insurer agreements yet relies primarily on your local community members for your business and are seeking relief from the pressures applied by insurers, then the answer to your question begins with a well-crafted repair authorization/contract and developing and implementing appropriate business practices. By “appropriate business practices,” I’m referring to company philosophies and doctrines that will ensure the long-term success and prosperity of your company and its team members – just like those developed by other successful enterprises and corporations well known for their business successes (such as insurance companies).

An effective repair authorization/contract will meet your state’s guidelines and provide methods of assessing fees and costs for storage and administrative fees as well as lien notifications in the event of contract default or non-payment issues. This will discourage unnecessary delays and poor behavior and encourage payment of billings in a timely manner.

As an example, the repair authorizations/contracts we at Auto Damage Experts (ADE) construct for our coaching/consulting repairer clients are custom crafted for each shop and based on their state’s governing regulations. They’re the centerpiece of a series of other documents and notices the repairer can employ in various situations including encouraging payment for performed repairs, lien notifications, stall tie-up, storage charges, administrative fees, estimate fees and other charges deemed appropriate to garner the desired results.

While many states may have mandated guidelines for automotive repair authorizations, few, if any, limit a repairer from including additional mandates, caveats and agreements between the repairer and their customers.

At ADE, we believe the most important and fundamental document for any repairer is their repair authorization/contract, and I would encourage you and others to take the opportunity to study yours and make it work for you and not against you.

You May Also Like

Lies and Deception: Defending Your Customers

Just because an insurer states something does not mean it’s true.

In this article, we’ll address the real-life issue of outright lies and deceit committed by individuals involved in the collision repair industry…and in this article, it does not pertain to collision repairers.

"Do Unto Others..."

In my role as a consultant to quality-oriented collision repairers, I’m often kept abreast of issues as they arise and how they affect my repairer clients and their customers. Also, I’m kept informed about interactions with insurers relative to repair and total loss settlements.

Answering the Phone: Don’t Give Your Customers the Runaround

Do you give your front-office staff all the information they need so they don’t have to put a customer on hold or transfer them to someone else?

Diminished Value: The Secret to Glowing Online Reviews

Advising your clients to get diminished value compensation for their vehicles is one of the best ways to get positive online reviews and word-of-mouth business.

Customers: Empathy and Support Go a Long Way

Unexpected events happen every day, so be sure to give your customers patience, attention and support.

Insurers: How Low Will They Go?

If a shop doesn’t bend to an insurer’s mandates, they will often take the position of: if you’re not with us, then you’re against us.

Other Posts
Auto Insurance Claims: Who Owes Whom?

Insurers don’t owe the repairer anything; insurers owe the vehicle owner, and the vehicle owner owes the repairer for the services rendered and received.

When Will OEM Referrals Replace DRP Referrals?

When will insurer DRPs end and car manufacturers dictate where the car gets repaired?

Auto Insurers and Total Losses

Is it legal for an insurance company to abandon the salvage of a vehicle they deemed a total loss?

Auto Insurance Fraud Works Both Ways

Unfortunately, for some insurers, fraud is becoming part of normal business practices.