EXECUTIVE DIRECTOR’S MESSAGE
Lessons to Be Learned EVANGELOS “LUCKY” PAPAGEORG
A business can no longer survive today using yesterday’s practices. Among these practices are methods of repair, tools and technology, along with practices in billing for services. In addition, there is the need to make consumers aware of what you are facing as a collision repairer. By this, I do not mean complain about how rough you have it (nobody likes a complainer) but rather use examples and comparisons which your collision repair customer can relate to. If you expect to do more than merely survive in the future, you must make the conscious decision as to how you will go about your business today to face the demands being forced upon you tomorrow. Many in the collision repair industry have been developing business plans to not only keep pace with changes but to get ahead and be prepared for what is coming down the road. To do this, many have looked within the collision repair industry to find colleagues and collaborators through educational seminars and programs offered by suppliers and manufacturers. Some have become involved with industry “20 groups” for the purpose of exchanging ideas and techniques which have proven to be successful. Another way we can learn to be successful is to look to other industries and businesses which have set standards for how services are provided and paid for. The most comparable of those industries to collision repair is the mechanical repair industry. Just like the collision repair industry, they are essential to the economic well-being and safety of motorists. Without the expertise of welltrained mechanics, many vehicles would come to a screeching halt – if they could even start in the first place. Every day, consumers pay independent garages or dealerships anywhere between $95 and (in some cases) more than $150 per hour for the repair and maintenance of their vehicles. It begs the question: Why is the work performed by a collision repair shop worth anything less? This is perplexing, especially because, in many instances, the work performed by a collision repairer is much more technical and requires far more expertise. The main reason mechanics are paid properly is because the consumer has been educated and expects to be charged those rates. Not only do consumers expect to be charged those rates per hour, but they also have been taught to expect to pay for additional charges such as hazardous waste removal, recycling fees, etc. And it was a learning experience. The key is those mechanical repair shops did NOT give up! Initially, the consumer did not like it, and yet they continue to take their vehicles in for repairs and maintenance. Over time, most consumers have stopped noticing
8 February 2022
New England Automotive Report
the charges, or if they do notice, they understand and expect that it is part of owning a vehicle. The sad fact is that we, as collision repairers, have failed miserably at educating the consumer for the most part. We have allowed insurers, whose sole purpose is to collect premiums and keep as much money as possible in their coffers, to be the consumer’s sole educator while also playing the part of their “protector.” We have also failed ourselves because, back when we were all supposedly “fat, dumb and happy” (you do remember when that was, right?), we were saving people their deductibles, performing services for “free” and going along to get along. We did a great job then of educating the consumer that there was so much “extra” in an estimate that we could afford to save or even give them back money for the privilege of repairing their vehicle. We did such a great job educating them that, to this day, consumers still ask, “What can you do to save MY deductible, I think it’s $1,000?” If that were not bad enough, there are far too many in the collision industry who still allow insurance appraisers to cost shift to get close to their needed bottom line. Again, we have not learned our lesson. Every time cost shifting is allowed, you think you have won, but all you have successfully accomplished is set yourself up to lose even more in the future. When you trade away a documentable necessary procedure for a little more time over here or even the “ghost” time in a wheel well area, YOU have given the insurance industry WRITTEN PROOF to substantiate their insistence of “We do not pay for that (needed procedure)!” The same goes for the Labor Rate: If you are not writing your estimates and supplements at your posted Labor Rate, your posted Labor Rate is nothing but a number on the wall, and you are failing yourself. You may believe that if an appraiser meets your Labor Rate via a concession line entry or “giving” you a few more hours here or there, you have won, yet actually you are once again failing because you are giving them WRITTEN PROOF. Why do you think it is put on the estimate as a lineitem concession? The reason is because when it comes time for Labor Rate hearings and discussions with legislators, the insurance representatives will be pointing to the “matrix” at the bottom of the estimate that shows an average of approximately $40 dollars (here in Massachusetts) multiplied by the labor hours. That’s the dollar amount they’ll show as paid. They will NOT be pointing up to where you negotiated, for example, $25 more per hour in line-item concessions. continued on pg. 44
