SCRS Says Insurer-Mandated Parts Programs Still Failing to Show Benefits to Collision Repairers - BodyShop Business

SCRS Says Insurer-Mandated Parts Programs Still Failing to Show Benefits to Collision Repairers

Association wonders if platforms will have enough benefits to one day grow organically without insurer influence over end user.

The Society of Collision Repair Specialists (SCRS) is stating that neither State Farm nor PartsTrader has provided a "well-constructed explanation" of how their parts procurement program provides benefits to collision repairers more than one year after mandating the use of the program in certain U.S. cities.

"While PartsTrader has made various software updates to address the plentiful concerns expressed by their end users, correcting and enhancing software issues is a necessary function of being in a technology business, and the industry still expects that technology companies should be able to provide a better value proposition for why we should be using their product than, ‘Because we got the insurance company to tell you to’," said SCRS Chairman Ron Reichen. "Perhaps the best question to ask PartsTrader and other companies similarly positioning their products through insurer-mandated programs is, ‘If your platforms can benefit the market enough, could or would they grow organically without insurer influence over the end user?’"
Other similarly mandated programs have begun to receive more attention as well, as insurers involved continue to require the use of programs despite what SCRS states is a recognition that there is "growing frustration from shops that are obligated to change their internal business practices to accommodate the changing rules of the DRP relationships."

SCRS cites one email from an American Family field adjuster to a group of repair businesses on the program that said, "I’ve received lots of feedback from almost everyone about APU [Solutions]. There is some good with it, and then there is some very frustrating/difficult stuff to deal with. One of the major concerns I’m hearing about right now is APU recommending all these little outlying suppliers that are requiring credit cards before you can order a part. Shops are not set up to be dealing with credit cards all over the country, and truly local suppliers such as Keystone don’t require them. Another concern is freight and, more specifically, how returns are handled. None of these are making things easier for you, and that’s frustrating for everyone."

According to SCRS, another concern mentioned was APU recommending parts located in multiple different states, or from multiple vendors. SCRS states that if there are 15 parts on an estimate, a repair facility could potentially be expected to purchase parts from 15 different vendors in 15 different states based solely on APU’s recommendations.
Added SCRS Immediate Past Chairman Aaron Clark, "Despite the obvious recognition of the hardships these mandates are potentially creating, and despite the rapidly evolving marketplace where it appears more and more online parts procurement solutions are entering into the marketplace, it is baffling why carriers continue to dictate process, rather than seeking a results-driven relationship with repairers. It certainly leaves the impression that there is more to gain for the insurance industry than the desire for increasingly informed selection of parts choices from reasonable vendors and more efficient processing."

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