The DRP Decision... - BodyShop Business

The DRP Decision…

Are DRPs marriages made in heaven or pacts with the devil? It depends on whom you ask

Direct-repair programs (DRPs) have been hailed by some in the industry as marriages made in heaven – a win/win/win situation for shops, insurers and vehicle owners – while, at the same time, denounced by others – who liken DRPs more to pacts with the devil (insurers being the devil, of course).

Who’s right? Questions like this seem to be the problem. Everyone wants a black and white answer. And most will give you one. Ask 10 repairers what they think of DRPs, and nine likely will answer you with, “I love ’em,” or “I hate ’em.”

“DRPs are bad,” said one shop owner/ respondent in BodyShop Business’ 2000 Industry Profile. “We were the first choice for three major insurers, but declined. They wanted to run my business. They were more concerned about money than quality repairs.” On the other hand … “I think DRPs are good,” said another respondent. “They streamline the claims process. Jobs can be repaired in a quality manner and returned faster.”

How can two shop owners – two people running the same type of business – view DRPs so differently? Shop owner opinions regarding DRPs are fairly easy to predict. If the owner is on DRPs, he’ll likely tell you he’s in favor of them. If he’s not on DRPs, he’ll likely tell you he’s not in favor of them. Very rare is the shop owner who doesn’t fit one of these molds.

But occasionally you find one. The following shop owner is involved with a DRP for one insurer and admits that quality often suffers at DRP shops. But it’s his contention that it’s volume – not DRPs – that dictates quality.

“I think repair quality is more a reflection of shop size and volume than DRP or non-DRP. Most large shops are on DRPs – and large shops are also the hardest to manage quality in. It’s no secret that as volume increases, quality suffers to a point. Percentage wise, DRP shops probably don’t do more poor repairs than non-DRP shops – it’s just that their volume puts more repairs, including poor repairs, on the street than non-DRPs. Volume is the key problem – not the fact the shop is on a DRP. They just usually go hand in hand.”

Regardless of your personal opinion regarding DRPs, the fact is that nearly half the industry is involved with them – 44.8 percent, according to BSB’s 2000 Industry Profile. Of that 44.8 percent, 91.3 percent say they’re better off due to their DRP arrangements.

Though most non-DRPers say there’s no money to be made – and too much liability to accept – on DRPs, the majority of those on DRPs say their profit margins have increased and they’re still able to repair a vehicle to pre-accident condition.

So who’s telling the truth? They all are. They’re telling the truth from their perspective … as they see it.

That’s why BSB is running the following two articles – one written by a shop owner who’s not on DRPs and one written by a shop owner who is. Though their ideas for running a shop are quite different, they’re both successful and their decisions have been right for them.

What’s right for you? That’s something only you can determine. But hopefully after reading both sides of the argument, you’ll feel better informed to make the right decision.

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