Shops in the Northeast and Midwest say they’re enjoying an uptick in work thanks to a rough winter, but some owners are concerned that increasingly price-conscious consumers will be willing to pay for fewer repairs once the ice melts.
George McHenry, owner of Southlake Collision Center in Merrillville, Ind., told the Post-Tribune that his business is up 20 percent from last winter, and he has a steady flow of customers.
“Mother Nature’s been very kind to us,” McHenry said. “We’ve been busy more this year than last due to the fact there was more snow.”
Dan Salan, owner of M&S Collision in Valparaiso and Chesterton, Ind., said winter has kept his shops busy, but he has noticed that customers are more frugal when it comes to repairs, according to the Post.
“The car, as long as it’s driving, is not the priority,” Salan said, noting that customers are opting out of optional body work and using insurance checks to pay other bills.
In Brainerd, Minn., Kari Barnes who co-owns ABC Collision and Repair with husband Jay Barnes said she has noticed a similar trend.
Kari Barnes told the Brainerd Dispatch that ABC’s customers are seeking more dent and rust repairs to take care of older vehicles, and potential customers are increasingly opting to not spend money paid by insurers after collisions.
The same holds true at Mike’s Auto Body in Merrimack, New Hampshire. Shop manager Mark Rousseau told the Union Leader that business has been down about 50 percent compared to last year, and more customers are requesting that the bare minimum be repaired on their vehicles after collisions. Customers who own older cars would rather pay to fight rust than buy a new vehicle.
“We’re not really going out and spending the extra money on advertising, and we’re definitely feeling the pinch, especially with the cost of materials going through the roof,” he said.
Barnes said she’s also concerned about increasing parts costs she believes are the result of design patents held by OEMs. Barnes believes that increased OEM parts prices and the limited availability of alternative parts would result in increased repair costs, which insurers would pass on to customers through increased rates (click HERE to read more about repairers’ concerns about parts prices and availability).
“As you can see, it’s an economic snowball,” she said. “Ultimately, we consumers pay for it.”
But not all shop owners have been affected by the recession.
Darrell Slotrem, owner of Darrell’s Auto Body near Brainerd, Minn., told the Brainerd Dispatch that his business has been steady thanks to crashes involving deer and car owners who are opting to repair their older vehicles. He also credits a good customer base built during his 30-plus years in business.
“I’ve got a good year going here, and last year was a good year for me, too, so I don’t know what recession they’re talking about,” he said. “I’m not worried.”
But in Indiana, M&S Collision’s Salan said he’s concerned about the future. Last year, high gas prices caused consumers to drive less, need fewer repairs and limit their spending. This year, Salan is worried that job losses will have the same effect.
But according to Barnes and Brainerd, Minn., shop owner Shannon Christian, the shops that survive will adapt to the times.
Christian, owner of Shannon’s Auto Body, said the economy has yet to have a serious impact on his business.
“With this economy, it doesn’t affect us as much as a lot of other businesses, like car dealers,” he said. “At least it hasn’t affected us yet.”
However, his customers have been affected. To help those who can’t afford to pay their deductibles, he’s established a payment plan a move that’s sure to reinforce the good will he has with his customer base comprised mostly of repeat visitors and referrals.
Barnes said she looks at the downturn as a way to streamline and improve the way she runs ABC.
“On a good note, for those of us who can survive and stick it out, we’re learning how to run our business in lean times,” she said. “If we can survive the next six to 10 months, we’ll be better off in the future.”