AASP-MN News October 2020

OCTOBER 2020

To Stay or Go? Part One

PLUS: AASP-MN’s Fall Educational Programming Body Shop Session Highlights

L DIGITA ENT CONT S U N O B EN BETWE 10 & 11 PAGES

Your Champion. Your Ally. www.aaspmn.org

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2 | October 2020

AASP-MN News

AASP-MN News is the official publication of the Alliance of Automotive Service Providers, Minnesota, Inc. 1970 Oakcrest Ave., Suite 102 Roseville, MN 55113 Phone: 612-623-1110 Fax: 612-623-1122 email: aasp@aaspmn.org website: aaspmn.org. To keep its readers better informed, AASP-MN News allows its columnists to fully express their opinions. All views expressed are not necessarily those of the publication. AASP-MN News is published by Thomas Greco Publishing, Inc. 2020 All rights reserved. Cover image www.istockphoto.com.

AASP of Minnesota is an association of independently-owned automotive service businesses and industry suppliers dedicated to improving the state’s automotive service industry and the success of its members.

AASP-MN BOARD MEMBERS 2020 - 2021

CONTENTS Vol. 29 No. 10

MECHANICAL DIVISION DIRECTOR’S MESSAGE........................4 Support Those Around You by Tony Newman LEGISLATIVE UPDATE................................................................6 Required Shop Practices – Replaced Parts, Records Retention, Required Notice by Kevin Walli, AASP-MN Lobbyist

PRESIDENT Matthew Feehan

UPCOMING GM CLINICS ............................................................7

IMMEDIATE PAST PRESIDENT Carl Thomas

LOCAL NEWS ............................................................................8

SECRETARY-TREASURER Tom Archambault

COVER STORY ..........................................................................12 DRPs: To Stay or Go? - Part One by Joel Gausten

COLLISION DIVISION DIRECTOR Jesse Jacobson MECHANICAL DIVISION DIRECTOR Tony Newman

CASH IN ON YOUR MEMBER BENEFITS! ....................................18 Did you know that by being a member of AASP-MN you have access to many other AASP National benefits? Check them out!

ASSOCIATE DIVISION DIRECTOR Loren Feldkamp COLLISION SEATS Randy Miller Lee Schlosser MECHANICAL SEAT Jeremy Nordgren

DIGITAL BONUS CONTENT (@ WWW.GRECOPUBLISHING.COM) Insurance I.Q. Partners In Prevention DEG Estimating Tips

STAFF EXECUTIVE DIRECTOR Judell Anderson, CAE OFFICE ADMINISTRATOR Jodi Pillsbury MEMBERSHIP COORDINATOR Tom Kluver

UPCOMING EVENTS

Various dates September – December - See page 7 for details Restraint Systems: Repair Them Safely After a Collision Webinar

Diagnosing Multiplexed Data Bus Networks Webinar

PUBLISHED BY: Thomas Greco Publishing, Inc. PUBLISHER Thomas Greco | thomas@grecopublishing.com SALES DIRECTOR Alicia Figurelli | alicia@grecopublishing.com GRAPHIC DESIGNER Lisa M. Cuthbert | lisa@grecopublishing.com EDITORIAL DIRECTOR Joel Gausten | joel@grecopublishing.com EDITORIAL & CREATIVE COORDINATOR Alana Bonillo | alana@grecopublishing.com OFFICE MANAGER Donna Greco | donna@grecopublishing.com

www.grecopublishing.com

ADVERTISERS’ INDEX AmeriPride ............................................................9 Buerkle Hyundai..................................................9 CBIZ ........................................................................15 Dentsmart ............................................................8 FinishMaster ........................................................16 Inver Grove Honda/Inver Grove Toyota ....6 Jack McClard........................................................16 Keystone ..............................................................13 Maplewood Toyota............................................14 Mopar Group ......................................................17

AASP-MN News

Morrie’s ................................................................4 MPA ........................................................................11 Network 1 ..............................................................13 Proven Force........................................................OBC Reliable Automotive Equipment....................IBC Rosedale Chevrolet............................................14 Sherwin Williams ................................................IFC Spanesi ..................................................................5 Straight & Square................................................17 Toyota Group ......................................................10

October 2020 | 3

MECHANICAL DIVISION DIRECTOR’S MESSAGE

Support Those Around You Here we are, in a COVID world, doing COVID things and wondering how this will all turn out. I feel very fortunate that I have only lived Tony Newman through a few difficult, worldAASP-MN changing events in my lifetime. The Mechanical Division ones that stand out in my mind are Desert Storm, the 9/11 attacks, the Iraq War and the current challenge of the coronavirus.

The thing that I have noticed after we have challenging, historical events is that everyone seems to band together. People notice their neighbors and take a step back and see the bigger picture. The coronavirus did the same thing.

We saw people ordering takeout from restaurants because we could not go sit down and place an order. We saw a big push to shop local and support the smaller shops.

The coronavirus is causing us to wear face masks and remain six feet apart. We all have had to make changes, some more than others. Until this gets fig-

4 | October 2020

ured out, if wearing face masks and distancing are the worst of it, then I say, “So be it.” Even if you’re not a believer, you can’t argue that COVID hasn’t changed the world.

The more I talk to owners of all different kinds of businesses, things seem to be getting better overall as we continue to adapt and get comfortable with the changes. Both of my parents ran small businesses, so I have always leaned toward patronizing family businesses. Not that big businesses are bad, but I find I have a hard time connecting with their principles and, often, their associates when I need some help.

As we move forward, let’s not go back to our old habits. Let’s continue to use the family businesses around us as much as possible. Let’s try to keep our money closer to our communities and our businesses.

Remember to stay positive, do good deeds, help those in need - including your neighbors - and support the businesses around you.

AASP-MN News

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October 2020 | 5

LEGISLATIVE UPDATE

Required Shop Practices – Replaced Parts, Records Retention, Required Notice Forty years ago, the state legislature passed Minn. Stat. §325F.62, which esKevin Walli tablished several repair shop practices AASP-MN Lobbyist relating to customer rights in the repair process. Many of you may be fully aware of these practices, with compliance measures well-embedded in your company practices. For those of you who may be unfamiliar with these requirements, this review will bring you up to speed.

• Subd. 1 of the statute gives your customers the right to receive replaced parts if they make their request before repairs are commenced.

Customers also have the right to examine warranty or exchanged parts for a period of five days after repairs are completed. Shops need not return parts you may be required to return to a manufacturer, distributor or as directed under terms of a warranty.

• Subd. 2 pertains to retention of records. For one year after repairs are performed, a shop must retain the customer’s name and address, any written estimate and the repair invoice.

The records must be available for reasonable inspection and copying. Such access is subject

6 | October 2020

to prior notice and may be limited to normal business hours. The cost of photocopying requested by the customer is the responsibility of the customer.

• Subd. 3 deals with notice of these rights. Shops are obliged to conspicuously post a sign that reads: “Upon a customer’s request, this shop is required to provide a written estimate for repairs costing $100 to $7,500 if the shop agrees to perform the repairs. The shop’s final price cannot ex ceed its written invoice by more than 10 percent without the prior authorization of the customer. You must request that the estimate be in writing. An oral estimate is not subject to the above repair cost limitations. If the shop charges a fee for the storage or care of repaired motor vehicles or appliances, the shop shall conspicuously display a sign that states the amount assessed for storage or care, when the charge begins to accrue, and the interval between assessments.”

There is not a particular triggering event that resulted in our focus on this particular statute. In fact, there has been no legislative change to this statute since 1996.

AASP-MN News

Continued on page 16

M UPCO

ING

A WEBIN

Sponsored by

RS

Grab your lunch and a co-worker or two and attend one of these 2-part webinars, presented by Jerry Tempel, Principal Tech Training Specialist, Raytheon Professional Services Cost: $50 per Member shop Only two shops per session are allowed. First come, first served, so reserve your spot today!

Restraint Systems: Repair Them Safely After A Collision

Diagnosing Multiplexed Data Bus Networks

This two-part session will cover the safety procedures to be followed while making repairs for safe operation of a vehicle post-accident. Topics covered include: O Supplemental

Restraint Systems (SRS) Components

O SIR

Disabling O Repairs & Inspection O Scan Tool Diagnosis

O CAN O LIN

O GMLAN O MOST®

SRS component replacement and restoring the system to pre-accident readiness will also be discussed.

Pre-registration and payment are required for this session. A link to join the webinar will be sent to you the day before the session.

Please check Session preferred date #

This two-part session will focus on diagnostic strategy to hone problem-solving skills for serial data failure modes in multiplex networks. Network protocols included are:

Repair methods will also be covered.

Pre-registration and payment are required for this session. A link to join the webinar will be sent to you the day before the session.

Please check Session preferred date #

Date / Time

Date / Time

1 2

Tues & Wed, 9/29 & 30 – 11:00 a.m.

Tues & Wed, 10/6 & 7 – 11:00 a.m.

1 2

Tues & Wed, 9/29 & 30 – 12:30 p.m.

Tues & Wed, 10/6 & 7 – 12:30 p.m.

3 4

Tues & Wed, 10/13 & 14 – 11:00 a.m.

Tues & Wed, 10/27 & 28 – 11:00 a.m.

5 6 7

Tues & Wed, 11/3 & 4 – 11:00 a.m.

Tues & Wed, 11/10 & 11 – 11:00 a.m.

Tues & Wed, 11/17 & 18 – 11:00 a.m.

3 4 5

Tues & Wed, 10/13 & 14 – 12:30 p.m.

Tues & Wed, 10/27 & 28 – 12:30 p.m.

Tues & Wed, 11/3 & 4 – 12:30 p.m.

6 7

Tues & Wed, 11/10 & 11 – 12:30 p.m.

Tues & Wed, 11/17 & 18 – 12:30 p.m.

8 9

Tues & Wed, 11/24 & 25 – 11:00 a.m.

Tues & Wed, 12/1 & 2 – 11:00 a.m.

10 11

Tues & Wed, 12/8 & 9 – 11:00 a.m.

Tues & Wed, 12/15 & 16 – 11:00 a.m.

8 9 10

Tues & Wed, 11/24 & 25 – 12:30 p.m.

Tues & Wed, 12/1 & 2 – 12:30 p.m.

Tues & Wed, 12/8 & 9 – 12:30 p.m.

11

Tues & Wed, 12/15 & 16 – 12:30 p.m.

Payment of $50 due prior to session: _____Check enclosed. Payable to AASP-MN _____Credit Card. CC #:____________________________________________ Expires:_____________CVV:__________ Billing Address:_______________________________________________________________________________ Return with payment to: AASP-MN, 1970 Oakcrest Ave., Suite 102, Roseville, MN 55113 Phone: (612) 623-1110 / Email: aasp@aaspmn.org.

Cancellation Policy: Refunds require 48 hours’ notice of cancellation.

AASP-MN News

October 2020 | 7

LOCAL NEWS

Body Shop Session Highlights On Thursday, September 24, AASP-MN hosted a Body Shop Session via Zoom. The program covered current disruptions affecting the collision repair industry and the potential impact. The session was presented by Frank Terlep, CEO of Auto Techcelerators and Jake Rodenroth, director of OEM and industry technical relations for asTech. Items discussed included: • • • •

How COVID-19 “fast-tracked” insure-tech Disruption via vehicle electrification Connected cars and big data AI (Artificial Intelligence) ... How it will change virtually every aspect of the industry • How VR (Virtual Reality) and AR (Augmented Reality) will dramatically change industry training and repair procedures • How vehicle tech will disrupt and create new opportunities and repair requirements Thank you to Twin Cities Auto Glass for sponsoring this program!

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I-CAR SkillsUSA Golf Outing Highlights The Minnesota Volunteer I-CAR Committee, along with SkillsUSA, had a successful, socially distanced golf tournament at the beautiful Oak Glen Golf Club in Stillwater on Wednesday, September 23. The proceeds from the outing support technical schools and students with scholarships and grants to continue the successful growth of the collision repair industry.

Thank You to Our Sponsors The following companies have made sponsorship commitments for AASP-MN’s educational programming and other activities in 2020: Platinum Fix Auto LKQ-Minnesota Lube-Tech & Partners Gold AASP National Auto Value Parts Stores Axalta Coating Systems CBIZ AiA FinishMaster Podium PPG Automotive Finishes United Fire Group

AASP-MN News

Silver aaa Auto Parts AmeriPride Services Colonial Life Enterprise Rent-A-Car O’Reilly Auto Parts PAM’s Auto, Inc. Sherwin Williams Single Source/NCS Suburban Chevrolet Bronze C.H.E.S.S. Twin Cities Auto Glass

Congratulations to team Latuff Brothers Auto Body (Robert Latuff, Nick Carson, Ben Leach and Christopher McKinney) who won first place this year with an 11 under par! There were many other winners with all of the donations and prizes presented at the dinner and awards ceremony following golf.

“We couldn’t do it without our sponsors! In particular, we would like to thank Keystone/LKQ (Event Sponsor) and aaa Auto Parts (Hole-in-One Sponsor),” said tournament coordinator, Jamison Randall. “We are so grateful we were able to raise about $5,000 for scholarships and grants to help future auto body employees provide safe and quality repairs for consumers.”

For more information, go to icargolf.com.

AASP-MN News

October 2020 | 9

WHY GENUINE PARTS? It’s the Right Thing to Do

You lose money when aftermarket parts don’t fit. Toyota Dealers are your best source for Genuine Toyota Parts. All it takes is one call.

For Toyota Genuine Parts please call one of these authorized local Toyota Dealers: Inver Grove Toyota 1037 Highway 110 Inver Grove Heights, MN PH: 651-306-4630 FAX: 654-457-8705 www.invergrovetoyota.com

Burnsville Toyota 14730 Buck Hill Road Burnsville, MN 55306 800-448-5912 PH: 952-435-8401 FAX: 952-435-8515

parts@invergrovetoyota.com

Maplewood Toyota 2873 Highway 61 Maplewood, MN 55109 PH: 651-490-2648 FAX: 651-490-2652 TOLL FREE: 877-574-0667 parts@maplewoodtoyota.com

ToyotaPartsAndService.com 10 | October 2020

AASP-MN News

Used Oil Burning Occasionally the Small Business Environmental Assistance Program talks with an auto shop that wants to burn used oil onsite for heat or give used oil to another business to burn for heat. Both scenarios are possible. However, it is important to make sure you understand environmental requirements before burning. Used oil can become contaminated with solvents or chlorinated ingredients or pick up heavy metals and contain polychlorinated biphenyls (PCBs).

The Minnesota Pollution Control Agency (MPCA) and the U.S. Environmental Protection Agency regulates used oil burning to make sure the oil is safe to burn and done so in an appropriate furnace.

Sources of used oil: First, make sure what you want to burn is considered used oil. Used oil includes petroleumbased or synthetic-based oils that may have been used as engine oil, transmission fluid, gear oil, brake fluid, transformer fluid and hydraulic oil. Antifreeze, fuels and solvents are not considered used oil.

If your site is a very small quantity generator, which generates less than 220 pounds of hazardous waste per month or less, you may mix eligible hazardous waste solvents into your used oil and still burn that mixture. The final mixture can contain a maximum of 10 percent solvent waste. That is just five-and-a-half gallons of solvent in a 55-gallon drum of used oil. Ineligible solvents include gasoline or a gasoline/solvent mix, chlorinated solvents such as perchloroethylene, trichloroethylene or methylene chloride and paint-related waste that contains hazardous levels of metal pigments. Keep records each time you mix in used solvent and note the date, type of solvent and amount.

Any business burning used oil onsite should keep records of the amount of oil burned.

Keep a copy of the test results proving that the used oil is on-spec for at least three years.

Either the giving or receiving business may test the used oil. Whoever is the first to declare the used oil as on-spec is considered a used oil marketer. Used oil marketers must submit a one-time notification of their activity using the MPCA’s Notification of Regulated Waste Activity form.

You may accept used oil and related wastes from another business so long as you provide the business with a receipt.

When you may burn untested or off-specification used oil for heat: You may burn untested or off-specification used oil in a space heater only if you generated it yourself or received it from households and farmers. Do not burn used oil you receive from another business without testing it.

Use a furnace that is designed to burn used oil and that is compliant with the Minnesota State Fire Code. Check the manufacturer’s specifications; many fuel oil space heaters sold today are designed to burn used oil. The furnace must be rated at less than 500,000 British Thermal Units (BTUs) per hour and vent outdoors. Operate the furnace in compliance with all state and local fire code requirements. Contact your local fire marshal to determine specific requirements.

Factsheets with more information on storing used oil, testing and registering as a used oil marketer are available at the MPCA’s website at pca.state.mn.us/.

Search for Used Oil and Related Waste or Used Oil Burning. You can also contact the Small Business Environmental Assistance program for confidential assistance on regulatory matters. Call (651) 282-6143 or e-mail smallbizhelp.pca@state.mn.us.

When you need to test used oil: If you wish to give used oil to another business for burning or want to burn used oil you received from another business, it must first be tested to determine whether it is on-specification or off-specification.

On-spec oil meets requirements for flash point, arsenic, cadmium, chromium, lead, PCBs and halogens.

Used oil is considered off-specification until it is tested and shown to meet requirements. If it’s tested and fails in any category, it’s called off-specification and must meet further requirements for burning. You only must test once unless the source of the used oil changes.

AASP-MN News October 2020 DIGITAL BONUS CONTENT

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PARTNERS IN PREVENTION

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Preventing Loss with Fire-Suppression Sprinkler Systems Retrofitting your property with fire-suppression sprinkler systems – or demanding their addition into your newly built property – might add expenses today but may help your shop achieve significant cost-savings in the long term. Having an up-to-date, effective and well-maintained sprinkler system will help you achieve significantly lower property insurance premiums, reduce losses in the event of a fire and get your business up and running quicker post-loss.

Consider adding sprinkler systems to protect your property – and your bottom line.

The Basics Fire-suppression sprinkler systems are used to control or extinguish fires in the early stages.

They help to mitigate the hazards for both building occupants and firefighters by spraying water directly on a fire source as soon as the sensor indicates a certain temperature has been reached. These systems could greatly decrease your losses in the case of a fire.

While many types of sprinkler systems exist, wet pipe and dry pipe are the most common. Wet-pipe sprinkler systems are constantly filled with water and are triggered when the ambient air temperature reaches a certain degree threshold. Most sprinkler systems in use today are wet-pipe systems.

If your facility has special considerations, it might be important to explore a dry-pipe system.

Dry-pipe sprinkler systems are filled with air until activated, at which point the surrounding pressure changes, allowing water to flow through the pipes.

Dry-pipe sprinkler systems are used in areas that are susceptible to freezing temperatures or contain expensive equipment that should not be near water.

Even less common systems include deluge, pre-action, foam water and water spray. Do some research to find out which type will best serve your business.

for certain income tax reductions that it would not otherwise qualify for. For example, some of the income tax reductions your building could qualify for are depreciation allowance, interest on a loan and Qualified Rehabilitation Tax Credit. The latter is applicable to noncommercial buildings built prior to 1936 or designated as historical structures. While the installation of sprinkler systems alone doesn’t qualify for a Qualified Rehabilitation Tax Credit, the expenses qualify for the credit as part of a renovation.

Liability is another reason for installing sprinkler systems in your building. Research has shown that the public considers sprinkler systems a “reasonable level of care,” resulting in building owners having to pay out over $1 million per life lost in the event of a fire where a sprinkler system was not present.

Not only do sprinkler systems save you money in the event of a fire – they are also an easy way to ensure that related building codes and laws are being adhered to. To be in compliance with the Life Safety Code, all high-rise apartments and office buildings must have either a full, operational sprinkler system or an engineered life safety system. One big difference between the two is that the engineered life safety system does not pay for itself in the long run. Certain federal legislation applies to this subject as well, such as the Hotel and Motel Fire Safety Act of 1990 and the Americans with Disabilities Act. Keeping yourself in compliance with codes and laws surrounding sprinkler systems will save you potential headaches later.

An equally important consideration in installing a sprinkler system is tied to business interruption; most companies that have fires never reopen their doors.

With sprinkler systems installed, the chance of a fire interrupting business is minimized – sprinkler systems can contain fires in small areas, decreasing the amount of damage and making it possible to reopen buildings and operations more quickly.

Because fires are a relatively common occurrence, it is important to protect yourself and your investments from damage. In addition to the benefits noted above, installing a sprinkler system will also give you peace of mind that your property is safe and well-protected.

“More and more insurance carriers are looking to reduce property exposures and the severity of claims.

When writing new business, they are requiring spray paint booths to have extinguishing systems. Some

Benefits of Sprinklers In considering the installation of sprinkler systems, you are likely concerned about the cost. However, the cost to you would be much greater if a fire occurs and there are no sprinkler systems present. Sprinkler systems can save you money in many ways, meaning that in the long run they pay for themselves.

The installation of a sprinkler system in your building is a smart financial decision. It lowers the risk associated with the building, resulting in lower insurance premiums. It can also qualify a building D2 | AASP-MN News October 2020 DIGITAL BONUS CONTENT

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INSURANCE I.Q.

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Mitchell: OEM Information within Mitchell Ultramate Mitchell has made it easier to access helpful OEM information within the estimating system. This is not a substitute for researching OEM information directly, but rather to use as a good starting point to perform safe and proper repairs, all starting with the VIN decode process. We will show you examples of how to access this information in this video: https://youtu.be/auDd8C7LbMA Audatex: Flex Additive Materials NOT INCLUDED Some repairers may experience a bill payer stating that “flex additive materials are included in Audatex.” Audatex users should reference the Audatex DBRM guide (http://mysupportgarage.com/ documents/10597/69591/Database+Reference+Manua l+for+Cars+%26+Light+Trucks) to clarify the following information on flex additive materials: On Page 43, Section 4-2, Labor exclusions: “Refinish Materials are NOT INCLUDED in Audatex Refinish Labor Values.”

On Page 160: “Add flex additive** (when required, labor only)” is considered an included operation.

All Three Systems: Rivnut, Rivstud, Nutsert and Misc.

Attachment Hardware Some replacement panels may require additional mounting hardware for attached components.

The labor and hardware cost to install these misc. fasteners to the replaced panel are NOT INCLUDED unless specified in the footnotes in the database.

Some fasteners may require a specific tool outlined in the OEM service manual. This would be an on-the-spot evaluation unless a labor time/footnote already exists in the estimating system.

CCC: Lowering Headliners for Access Recent DEG Inquiry 16791 (https://deg-heroku-18. herokuapp.com/inquiries/16791) addresses when a headliner “lowering” operation is included with another component labor operation time.

“If the repair facility decided to remove the headliner rather than raise/re-lower, that would require an on-the-spot evaluation and manual line entry. MOTOR cannot predict how many times the shop would need to raise/lower the headliner during a given repair scenario. If the repair scenario requires that to be performed more times than called for in the OEM repair procedure, that would require an on-thespot evaluation and manual line entry.”

Audatex: Section 5-2 FAQ In 2020, the Audatex DBRM was updated with new FAQs (frequently asked questions) regarding refinishing of the back side of replacement panels.

Question: Does Audatex refinish times allow for refinishing the backside of the panels like fenders and quarter panels?

Answer: The replacement refinish allowance for fenders and quarter panels does not account for refinishing the backside of these panels. They are not typically refinished in the repair process.

Repairers may have instances where the actual backside may not need “REFINISH” but rather additional “Corrosion Protection” product application of labor and materials to replicate the factory appearance and corrosion protection properties. It is always important to reference the OEM’s repair procedures and follow proper corrosion protection steps.

Note: The estimating databases are all intended to be used as a GUIDE ONLY - it is important to remember that the auto body professional performing the repair is in a position to thoroughly inspect, diagnose and identify the methodology and their unique cost of the vehicle damage repair. You can view these tips and others on the DEG website, DEGWEB.ORG.

INSURANCE I.Q. continued from D2

shop owners will argue that they are using waterbased color coats, which is great, but the primers are still solvent based, which is the primary concern over the volatility of the fumes. Although, insurance carriers have not yet issued any directive to current insured customers to retrofit their non-sprinklered booths, it’s my opinion that it’s on the horizon. If an owner doesn’t retrofit, they could eventually be faced

with non-renewal and a very limited marketplace to secure coverage,” said Brad Schmid of CBIZ AiA. For more information, contact Brad at (763) 549-2247 or bschmid@cbizaia.com.

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ESTIMATING TIPS

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CUSTOMER SATISFACTION IS OUR TOP PRIORITY. PARTNERS OFFER DEDICATED WHOLESALE CALL CENTERS. OVER 50 DELIVERY VEHICLES WITHIN PARTNER NETWORK. ALL PARTNERS OFFER TECHNICAL SUPPORT FOR ASSOCIATE VEHICLES.

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COVER STORY By Joel Gausten

DRPs: To Stay or Go? - Part One For more than three decades, Direct Repair Programs have been the source of both steady work and ongoing frustration for shops throughout the country. Some shops readily embrace them, while others have either stopped participating with insurers in this way or never agreed to be a part of the system in the first place. This month, we present the first in a multi-part series examining various views on one of the industry’s most controversial issues.

Letting Go In August 2019, Mike Schoonover’s patience finally ran out.

A third-generation facility owner, he took a good look at the DRPs he had with some of the industry’s largest insurance companies and decided it was time for his Shoreview-based shop, Schoonover Bodyworks, to go it alone.

His decision to become strictly independent didn’t happen overnight; it was the result of what he saw as a lack of evolution in a system that has remained largely stagnant for decades. For example, he couldn’t reconcile the need for pre-and post-repair scanning and calibrations with the insurance industry’s ongoing failure to embrace them as necessary items worthy of compensation.

“We were getting severe pushback from big insurance companies for doing that work, or they were limiting us to what we could charge for it. We made the investment in training and equipment to handle the scanning and calibration of the vehicles with ADAS. We were living within a Direct Repair Program that was created years ago, and yet vehicles are now more complex in design, technology and construction [than ever before].”

After facing one too many roadblocks on ADAS and other critical procedures, he decided to remove every DRP arrangement he made for his 80-year-old business. In his mind, the 15 percent of overall business he was getting from the participating carriers was no longer worth the stress.

Prior to COVID-19, his first quarter sales for 2020 were up five percent from the first quarter of 2019, while his gross profit was up 20 percent. He credits word of mouth and a 4.9-star average rating on Google for driving this increase.

More than a year after dropping all DRPs, he remains confident that he did the right thing.

“We used to feel really good about our ‘partnership’ with an insurance company where we were working together to serve our customer. Right now, the only people who insurance companies serve are themselves. They don’t care about the customer, the shop or the relationship.”

Staying On For 50-year industry veteran Bob Pearson of Pearson Auto Body, maintaining DRP relationships makes sense despite the concessions common of such arrangements. In his mind, his 10 current insurer partnerships help bring in the volume necessary to keep his sizable Shakopee-based operation moving forward.

“I’ve always been in big buildings. My last building was 27,000 square feet. So is this one. I’m in a town of 45,000.

You almost have to be an insurance-friendly business or a willing DRP partner. There’s nothing wrong in my world with

12 | October 2020

getting referrals. We have a lot of latitude to write our own estimates. I don’t have a lot of negatives to say about it.”

Pearson believes the “latitude” he is afforded by insurers stems from his facility’s expertise and history of fair dealings.

“It comes down to trust. They trust who they’re working with, and they trust our certifications, qualifications, reputation and our business philosophy that we can do this together for the benefit of the consumer.”

Although he has made this philosophy work for him, he acknowledges that there are plenty of factors that any shop should keep in mind before taking on a DRP. For example, sublet markups are commonly negotiable outside of the DRP environment but are handled on a case-by-case basis at his facility when he’s dealing with a partner. On the flipside, carriers typically cover Pearson’s pre-and post-repair scans when the need to do them is clearly documented by the automaker. Pearson Auto Body’s status as a certified facility for 10 OEMs adds to his ease of negotiating in this regard.

“When it is required, they don’t hesitate to pay it.”

Ultimately, Pearson’s success with DRPs has largely come from knowing when to draw the line and when to let things go.

“Realistically, there’s hardly anything we don’t get from an insurer if it’s deserved on the vehicle and it’s within the definition of the policy. If worst came to worst, we would just buy [the work] ourselves. It’s like giving someone a depreciation on a battery and charging them eight dollars.

Why would you want to lose the customer over that amount of money?”

Of course, that doesn’t mean that disagreements haven’t entered into the picture now and then. When things get rocky over increased administrative demands or other issues, Pearson feels it’s his responsibility as the shop partner to sound the alarm – but that doesn’t necessarily mean going to war.

“Our white-collar load is getting heavier and heavier, but if you can sit down and talk to them, they’ll listen. However, the person to talk to is probably not the guy who’s coming through your door. It’s all about the right people talking for the right reasons. It’s just a matter of being nice, thoughtful and intelligent and not having your boxing gloves on every time they come through the door.”

Regardless of where one stands on the DRP issue, what’s most important is that shops base their position on genuine research and education. Even in an industry where every job counts, the allure of work through insurance referrals may not be enough for some facilities to sign a contract. The bottom line is knowing how much you’re making on each job that comes through your door and weighing that against the potential for loss through DRP concessions.

Only then will you know if it is reasonable to continue making up for these losses with volume or to walk away.

Look for Part 2 of this feature in next month’s AASP-MN News. Schoonover invites body shops to contact him at (651) 483-6756 or mschoonover@sbwinc.com if they would like to discuss his experiences as a DRP.

AASP-MN News

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October 2020 | 15

LEGISLATIVE UPDATE

Continued from page 6

We simply present this information to inform members who may not have been aware and as a reminder to others.

This article is focused rather narrowly on the requirements of our current statute governing records retention in the context of a customer’s right to know, or even see, replaced parts. There are many other circumstances where an auto repair business, or any business for that matter, should have procedures in place for the retention of business records. We will further explore these circumstances and procedures in next month’s article here in AASP-MN News.

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AASP-MN News

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October 2020 | 17

CASH IN ON YOUR MEMBER BENEFITS!

Did you know that by being a member of AASP-MN you have access to many other AASP National benefits? Check them out!

Website and Internet Marketing Solutions Autoshop Solutions, the leader in internet marketing for the automotive aftermarket, has developed and launched the most cutting-edge marketing platform for auto shops.

RPM is an all-in-one program that bundles your website, pay-per-click, search engine optimization, social media and much more! By using every marketing tool in the toolbox, you’re guaranteed to have a stronger online presence that brings more cars to your bays. With five levels of “Really Powerful Marketing” to match your budget, goals and competition – RPM is built to drive your shop forward.

For more information, contact Tony Mercury at (919) 267-1731 or (888) 991-3449 or email tony@autoshopsolutions.com.

Information Providers IDENTIFIX offers AASP members discounted prices on the industry’s number one technical repair information subscription, Direct Hit. For more information, contact customer service at (800) 288-6210.

Mitchell International offers AASP members a 15 percent discount on any Mitchell RepairCenter™ TechAdvisor package. Visit repaircenter.mitchell.com/Catalog/OEMRepair.aspx or call customer service at (800) 238-9111 for more information.

Mitchell1 offers AASP members significant discounts on the ProDemand, Manager SE and Teamworks products. For more information, contact customer service at (888) 7246742, ext. 6986.

Business Coaching 180BIZ offers members a 20 percent discount on oneon-one sales and management coaching programs (covering financial planning and analysis, strategic marketing, leadership and personnel development) without long-term commitments. Members also receive a 25 percent discount on monthly sales and management webinars, as well as a 20 percent discount on all 180BIZ advisor training programs.

For more information, call (540) 833-2014 or visit 180biz.com.

Online Education Portal AASP members have access to free webinars designed to enhance management skills and help their business thrive. Visit elearning.autoserviceproviders.com to check it out.

For more information about any of the AASP National programs above, contact the AASP-MN office at (612) 6231110 or aasp@aaspmn.org.

AASP-MN MEMBER BENEFIT PROGRAMS PROPERTY/LIABILITY AND WORKERS’ COMP INSURANCE CBIZ AIA Contact: Brad Schmid 763-549-2247 / bschmid@cbizaia.com CBIZ AIA and United Fire Group (UFG) have created a program for members that includes a special premium discount, exclusive coverage and potential safety group dividend. CBIZ AIA can present quotes from multiple carriers and, as an added bonus, offer members an exclusive 10% discount on their property/liability insurance premiums.

LEGAL CONSULTATION Fryberger, Buchanan, Smith & Frederick 800-496-6789 Members receive free, over-the-phone legal assessment and consultation (some restrictions apply) with an attorney who specializes in the area of law that is the subject of the call.

WEBSITE AND INTERNET MARKETING SOLUTIONS Autoshop Solutions Contact: Tony Mercury 919-267-1731 / tony@autoshopsolutions.com Autoshop Solutions has developed the most cutting-edge EMPLOYEE BENEFITS marketing platform for AASP members. Really Powerful Marketing (RPM) is an all-in-one program that bundles your Business Planning Professionals website, pay-per-click, search engine optimization, social media, Contact: Dennis Begley and much more! With five levels of RPM to match your budget, 612-308-6577 / dennis@begley-group.com Business Planning Professionals will provide AASP-MN members goals, and competition, it’s built to drive your shop forward! with quotes from multiple carriers for life insurance, health insurance, long-term care and disability insurance.

Net Driven Contact: Rich Mullen 877-860-2005, ext. 224 / rmullen@netdriven.com EMPLOYEE VOLUNTARY BENEFITS Net Driven is a market leader in website and internet Colonial Life marketing solutions designed exclusively for the automotive Contact: Deb Ferrao industry. AASP-MN members who choose Net Driven are 612-600-4135 / deb.ferrao@coloniallifesales.com eligible for a $500 discount off their 1st year setup fees. or Tracy Bailey 612-801-0139 / tracy.bailey@coloniallifesales.com Dedicated representatives can help members transform INFORMATION PROVIDERS their benefit package with competitive rates, value added Mitchell1 services at no cost and complimentary legal document Contact: Mitchell1 Representative preparation service. Colonial Life has the tools and flexibility 888-724-6742 x 6986 to create a plan to fit everyone’s needs.

Mitchell1 offers AASP members special savings on Mitchell 1’s ProDemand, Manager SE & Teamworks products. For UNIFORM & LINEN SUPPLIES more information, contact Customer Service at 888-7246742, ext. 6986.

AmeriPride Services Contact: John Majchrzak 612-670-4034/ majchrzak-john@aramark.com Mitchell International Discounted pricing to members on rental of uniforms, Contact: Mitchell International Representative entrance mats, shop rags, etc. Purchases are also 800-238-9111 discounted. Members receive annual rebate equal to 10% of AASP members receive a 15% discount on any Mitchell their business with AmeriPride each year.

RepairCenter TechAdvisor package. Visit ww.w.mitchell.com/ products-services/collision-repair-shop-solutions/cloudCREDIT CARD PROCESSING estimating for more information.

Association BankCard Services TECHNICAL INFORMATION HOTLINE Contact: Mac Hardin 952-933-2026 / mach@retailfinancialservices.biz IDENTIFIX Competitive rates for AASP-MN members. Terminals and 800-288-6220 printers sold at cost. Monthly rental of equipment is also Members enjoy discounted prices on the industry’s #1 available. technical information hotline, Direct-Hit.

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AASP-MN News

AUTO EMPLOYEE ASSESSMENT Assessment Associates International Contact: Nate Page 952-854-6551 / nate@aai-assessment.com Designed to help facilitate and enhance hiring decisions. AASP-MN members receive 50% off retail price, starting as low as $15 per assessment.

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CHECK GUARANTEE SERVICES Certegy Check Services 877-520-2987 Discount rate of .75% to AASP-MN members. Use existing credit card terminal. Fast claim payments.

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