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How Does Your State Rate: Aftermarket and Remanufactured parts

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I’ve always enjoyed soaking up the wealth of knowledge in each new issue of BodyShop Business, yet this month I was somewhat disappointed when reading the research article you wrote [Jan. 2003, pg. 20; potential gross sales per shop in vermont is $79,124, the lowest in the country]. I’m a third-generation collision shop owner with the fourth generation working his way up quickly. All generations have been in Vermont! All generations have and are continuing to make a very good living in the collision repair industry here in Vermont. I would have to question the credibility of the source of your information for Vermont. It certainly doesn’t measure up to what we see here in our small Northeastern Vermont town. We have a small shop compared to what the larger cities in Vermont have, and I have a hard time believing the numbers you documented.

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At the end of your article, you made all kinds of reasons why the information may not be correct and that if there’s an error in your article, it’s because of your “credible sources.” This said, I’d like to know what sources were used for Vermont so I may do some research of my own.

I do appreciate all you do for the collision repair industry and will continue to dive into each new issue. I have a great love for Vermont and believe that the collision market is alive and well.

Thanks for hearing me out.
Sincerely,
Suzanne Mudge, owner
Five Star Autobody
St. Johnsbury, Vt.


Response to Suzanne from Bob Roberts, manager of Marketing Research:

Thank you for feeling strongly enough about what we presented that you took the time to write to us. I appreciate the feeling you must have had seeing Vermont’s ranking of collision potential by state. I felt from the beginning that states that appeared either at the top or the bottom of the list of collision potential had some special issues that we couldn’t figure out.

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When we developed the figures for the collision repair study that appeared in the January issue of BodyShop Business, we had to rely on several different sources of information and then make assumptions based on what we’d discovered. I was surprised to find that only 17 states report their collision data to the federal government.

Our numbers rely on several key pieces of information. First, we look at the number of vehicles registered in the state, and in Vermont, there are about 529,000 vehicles. Next, we attempt to get the actual collision total from the state government; for about 20 additional states, we were able to do that. For the rest, we had to apply a national average accident rate to attempt to calculate that state’s potential for collision repair.

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For Vermont, we were given a figure of 3,566 crashes. This works out to that very low total of about 14,384 repaired crashes (see the article for the logic here). In retrospect, either your neighbors in Vermont are really good drivers, or the reported total we were given was too low. The collision rate for your state would appear to be only one-third as high as the next lowest state (Pennsylvania). I think we would have been closer to the real number if we’d used that national average of .0330 (3.3%) and computed Vermont’s numbers using that factor. If we use that factor, the potential collision repair volume for each shop in Vermont goes up dramatically, to about $316,000 annually, placing it closer to the No. 10 position.

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There are other figures that could have been inaccurate and led to an inaccurate average, but I think the figure for total collisions is at the root of the problem. We’ll try to be more accurate in our computations next year. Thank you for your interest!

Regards,
Bob Roberts
Manager of Marketing Research
BodyShop Business
Babcox Publications
Akron, Ohio

A/M Parts Supplier Refuses to Sell to Shop It Calls “Too Fussy”
The Certified Aftermarket Parts Association (CAPA) was started by the insurance industry to certify aftermarket parts that come into the United States. When a repair shop receives a CAPA-certified part, it also receives a check-off list of possible problems relating to the part.

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If there’s a problem, the shop is to complete this form, call the supplier and repackage the part for return. The shop isn’t reimbursed for any of this time. The shop now has to call the owner and let him know of the parts problem and call the insurance company to let them know the aftermarket (A/M) part or parts don’t meet the fit, form and function standards.

Most of the time, the insurance adjuster will then authorize an OEM part being ordered. The repair shop, which works somewhat like an assembly line, has now been shut down. The car with the parts problem is going to be late, and it’s also slowed down the work on vehicles behind it. All the owner wants is his car back.

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The choice the repairer makes in this situation is deciding to be fussy and repair the vehicle to pre-accident condition, which results in him losing time and money or lowering his repair standards and using an inferior part. If a shop decides to use the part, it not only keeps the repair line moving, but makes it appear to the insurance company and the supplier like the part did meet the required standards.

The vehicle owner is greatly affected through this process. He may not notice the repair problem when the car is delivered, but when it comes time to trade in the vehicle, he loses money due to diminished value.

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I’m concerned about any problems the vehicle owner may have with a repair. It is Dingman’s or any other repairer’s responsibility to protect the vehicle owner’s investment through every repair. Is Dingman’s really too fussy?

Parts – be it new OEM, used, aftermarket or remanufactured – affect our business when they’re not up to our standards. So why do we try and use some of these problem parts?

Most insurance companies ask the repairer to use these parts. We start with the insurance company’s repair estimate. If a problem arises with a part, we call the supplier and let them know what’s going on. We bill the supplier if we have to repair a part or have already painted the part and it doesn’t fit.

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But the bill to the supplier doesn’t begin to cover the true cost of time that the shop loses because of the work delay. Understandably, the supplier doesn’t like to have their parts cost them money, but they’re ultimately responsible for the parts they sell.

Is it being too fussy when we expect an A/M or remanufactured part to fit in form and function like a new OEM part?

Keystone thinks so. [The Omaha district manager of Keystone] said we were too fussy and he’d rather not sell to us. This would affect our business adversely because it would create problems working with insurance companies that use A/M parts in their repairs.

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Dingman’s believes parts competition is good as long as it doesn’t lower the safety or standard of repairs. The vehicle owner deserves to have quality repairs done and not experience any loss of value on his vehicle. In most cases, the vehicle is the owner’s second largest investment.

How will these aftermarket and remanufactured parts ever get better if they’re not held to a higher standard?

Boyd Dingman, owner
Dingman’s Collision Center
Omaha, Neb.

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