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PLUS: Inside the Labor Rate Survey The “Waiver” Method Putnam BBQ Highlights

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New England Automotive Report

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NEAR0719.qxp_NEAR1014 6/18/19 11:30 AM Page 7

July 2019 • Volume 17, No. 7

DEPARTMENTS VICE PRESIDENT’S MESSAGE By Kevin Gallerani 8 | The Best Few Minutes You’ll Ever Spend

CONTENTS FEATURES 34

EXECUTIVE DIRECTOR’S MESSAGE By Evangelos “Lucky” Papageorg

10 | And So Much More

LOCAL NEWS 11 | ADALB Delays Shop/Vendor Advisory Ruling Vote 17 | Seventh Annual Putnam Academy BBQ Delivers Food and Fun 22 | AASP/MA Chapter Meetings Explore New Labor Rate Survey By Joel Gausten

23 | AASP/MA Shop Steps up Labor Rate Campaign

30 | FEATURE By Joel Gausten

A Repair Nightmare: NEAR’s Editor Tells All

34 | COVER STORY By Joel Gausten

NATIONAL NEWS By Joel Gausten 27 | AASP/MA Represented at National AASP Board Meeting

Drowning in Alphabet Soup: Inside Parts Category Confusion

ALSO THIS ISSUE

38 | LEGAL PERSPECTIVE

10 | WHERE’S LUCKY? 14 | AASP/MA VENDOR AFFINITY PROGRAM SPONSORS 15 | AASP/MA VENDOR AFFINITY PROGRAM SPONSOR BENEFITS 43 | AASP/MA MEMBERSHIP APPLICATION

Using the “Waiver” Method to Get Your Customer’s Authorization for Repairs

ADVERTISERS’ INDEX Accudraft Paint Booths ................................OBC American Honda Motor Co. ............................29 Axalta ............................................................6 Audi Group ....................................................16 Best Chevrolet/Best CDJR ..............................IFC BMW Group ..........................................................18 BMW/Mini of Warwick ..................................32 Colonial Auto Group ........................................4 Empire Auto Parts ..........................................46 First Chrysler-Dodge-Jeep-Ram......................42 First Ford ......................................................42 First Hyundai ................................................42

By James Castleman

Ford Group....................................................37 Fred Beans Parts ............................................35 Honda Group ................................................45 Hyundai Group ..............................................13 Imperial Ford ................................................37 Ira Subaru......................................................13 Ira Toyota of Danvers ......................................12 Kelly Automotive Group ................................IBC Kia Group ......................................................13 Linder’s, Inc. ................................................42 Long Automotive Group ..................................9 Mazda Group ................................................36 McGovern Chrysler Jeep Dodge Ram ................26 Mopar Group ................................................25

Nissan Group ................................................41 PPG................................................................3 Reliable Automotive Equipment ........................5 Sarat Ford Lincoln ..........................................26 Sentry Group ................................................40 Sherwin-Williams..........................................44 Subaru Group ................................................20 Tasca Group ..................................................28 Toyota Group ................................................33 Volvo Group ..................................................24 VW Group ....................................................21 Wellesley Toyota/Scion ..................................46 Wheel Collision Center ....................................11

New England Automotive Report July 2019 7

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VICE PRESIDENT’S MESSAGE

The Best Few Minutes You’ll Ever Spend By Kevin Gallerani

If you read this magazine and attend our regular chapter

amount of time to bettering the industry. The results would be

meetings, you should deﬁnitely know about the new Variable

astounding.

Rate System (VRS) Standardized Labor Rate Survey in Massa-

As of this writing, over 146 shops have already taken the

chusetts by now. If you somehow missed this important

survey; we would need roughly 190 more to make the results

news, please check out the June 2019 issue of New England

statistically valid. It’s very possible that we’ll be at that point

Automotive Report and read our AASP/MA chapter meeting

(or even beyond) by the time this issue is in your hands. Either

coverage in this month’s issue.

way, it’s critical that you take the survey today. Let’s show

In my opinion, the VRS Standardized Labor Rate Survey is

the powers that be that we are serious about addressing the

an opportunity that none of us can aﬀord to pass up. It pro-

Labor Rate and ready to do all we can to secure our ﬁnancial

vides every collision repair shop in our state an independent,

futures while providing safe, quality repairs.

third-party process for better identifying our posted, non-

If you would like more information on the VRS Standard-

concessionary rates. Best of all, it is free for all Massachusetts

ized Labor Rate Survey, please contact AASP/MA Executive

facilities to use. It can be taken easily and conﬁdentially at

Director Lucky Papageorg at lucky@aaspma.org or (617) 574-

LaborRateSurvey.com.

0741, ext. 2. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

As a shop owner, I understand how little free time we

MASSACHUSETTS

have during the day. I also know that more than a few eyes might be glazing over at the thought of taking a time-consuming survey. That is not a concern with the VRS Standard-

AASP/MA VICE PRESIDENT KEVIN GALLERANI is vice president of Cape Auto Collision Center in Plymouth, MA. He can be reached at (508) 747-0316 or kevin@capeautobody.com

ized Labor Rate Survey. It took me about 10 minutes to ﬁll out. Just imagine if every shop in the state devoted such a short

AU M TIVE AUT T TI TIV STAFF

AASP/MA EXECUTIVE COMMITTEE

PUBLISHER

CREATIVE DIRECTOR

Thomas Greco - thomas@grecopublishing.com

Lea Velocci - lea@grecopublishing.com

SALES DIRECTOR

EDITORIAL/CREATIVE COORDINATOR

Alicia Figurelli - alicia@grecopublishing.com

Alana Bonillo - alana@grecopublishing.com

EDITORIAL DIRECTOR

PRODUCTION

Joel Gausten - joel@grecopublishing.com

Donna Greco - donna@grecopublishing.com Christopher Rizzi - chris@grecopublishing.com

PUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963 www.grecopublishing.com

CELEBRATING 30 YEARS New England Automotive Report is published monthly by TGP, Inc., 244 Chestnut Street, Suite 202 Nutley, NJ 07110. Distributed free to qualified recipients; $48 to all others. Additional copies of New England Automotive Report are available at $5 per copy. Reproduction of any portions of this publication is specifically prohibited without written permission of the publisher. The opinions and ideas appearing in this magazine are not necessarily representations of TGP Inc. or of AASP/MA. Copyright © 2019 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com

PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

WWW.AASPMA.ORG MASSACHUSETTS

8 July 2019

New England Automotive Report

TREASURER Matthew Ciaschini LEGISLATIVE CHAIR Peter Langone IMMEDIATE PAST PRESIDENT Paul Hendricks

PRESIDENT Molly Brodeur VICE PRESIDENT Kevin Gallerani SECRETARY Gary Cloutier

AASP/MA STATEWIDE DIRECTORS COLLISION DIRECTOR Rob DelGallo

AT-LARGE DIRECTOR Adam Ioakim

AASP/MA DIRECTORS Ray Belsito Alex Falzone Rick Fleming

Joshua Fuller Kevin Kyes Frank Patterson

Mike Penacho Dana Snowdale Bill Spellane

AASP/MA ADMINISTRATIVE OFFICE Evangelos “Lucky” Papageorg: AASP/MA Executive Director

Alana Bonillo: AASP/MA Administrative Assistant P.O. Box 212 Marlborough, MA 01752 617-574-0741

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Email: tschube@longauto.com New England Automotive Report July 2019 9

NEAR0719.qxp_NEAR1014 6/18/19 11:30 AM Page 10

EXECUTIVE DIRECTOR’S MESSAGE

And So Much More EVANGELOS “LUCKY” PAPAGEORG

As we begin our second year of operation as the “new” AASP/MA, I thought it would be a good point to recap what has transpired over the past 12 months. For those of you who have been following our activities here in New England Automotive Report and in our members-only Damage Report newsletter, you know that we have been working diligently to bring valueadded beneﬁts to our membership. There are numerous ways in which we have done so, and we will continue our eﬀorts on your - and your customers’ behalf. Informative and timely articles in this magazine about industry issues and trends are a great foundation for shop owners to make informed decisions as to the direction they wish to take their

businesses. We continue to provide information about issues here in Massachusetts and across the country. They involve changes in technology and certiﬁcation programs and – most importantly – how to continue to stay competitive in our very challenging and changing ﬁeld/marketplace. AASP/MA has received great responses to the information we provide to our members via emails on a weekly basis. The emails inform and provide helpful repair tips and OEM recommendations and requirements. This has been assisting shops with substantiating the need to perform certain repairs and be reimbursed properly and fairly for their work in restoring vehicles back to a crashworthy condition.

With the documentation we’ve provided in your hands, it will be extremely diﬃcult for an insurer to tell you that they will not pay for proper repairs. It will be even more challenging for them when you have passed along the information to your customer to substantiate your position. Your best ally in the repair process is an informed customer. AASP/MA’s Board of Directors has been active and growing with newly elected members since last fall. The Board and its diﬀerent committees have been working on many fronts to improve the situation here in Massachusetts for you and your customers. We have been addressing the use of aftermarket parts. Based on a request from an AASP/MA member, the

AASP/MA Executive Director Lucky Papageorg is on the move! Read below for his stops this month.

In the third week of July, Lucky will be visiting the Western region.

During the fourth week of July, he will be in the Boston/Northeast region.

He will be spending the first week of August visiting shops in the Southeast region.

July 14 - August 11

During the second week of August, he is visiting shops in the Midstate region.

2019

Lucky can be reached at (617) 574-0741 or lucky@aaspma.org.

Keep an eye out for future meeting dates and locations! PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

10 July 2019

New England Automotive Report

There are no chapter meetings in July/August. Lucky will be visiting with shops during these months to discuss membership and the Variable Rate System (VRS) Standardized Labor Rate Survey.

Lucky can be reached at (617) 574-0741 or lucky@aaspma.org.

NEAR0719.qxp_NEAR1014 6/18/19 11:30 AM Page 11

ADALB is considering Advisory Ruling language that will address the issue of vendors “blackballing” repair shops. The shops are “blackballed” because of their return rate, which is created when the shop orders an aftermarket part specified by the insurer from a specific vendor and then demonstrates to (and gets an agreement from) the insurer that the part is unfit for use. The Advisory Ruling has become necessary due to the insurers that take a hard line. They do not understand that if a shop cannot get a specified part from a specified vendor (for whatever reason), the part is unavailable and the situation should be remedied via a supplement request. The Advisory Ruling should clarify this point. AASP/MA has reestablished local chapter meetings, which have played a strong part in the association’s success in the past by attracting new members and creating an atmosphere of comradery among shop owners and managers. These meetings allow for the face-to-face discussion of the issues we face and help eliminate the feeling of being “the only one.” Since the beginning of the year, there has been a chapter meeting in each of the four chapter areas of the state every month. Attendance has increased with each meeting and via word of mouth about the valuable information being discussed. We will be taking July and August off the meeting schedule; the meetings will resume in September. Most recently, AASP/MA has rolled out the first-of-its-kind Labor Rate Survey designed specifically for Massachusetts. The response to date has been resounding. The National AutoBody Research group has reported that our state has had the most surveys completed in the shortest period of time that they have ever experienced. We look forward to sharing the results with our members in the upcoming months. The results and documentation provided by the Variable Rate Survey will be important tools as we strive to be properly compensated for the challenging work we do in restoring vehicles to their crashworthy condition continued on page 46

[LOCAL] NEWS

ADALB Delays Shop/Vendor Advisory Ruling Vote

New ADALB member Peter Smith (MAPFRE Insurance)

The latest meeting of the Auto Damage Appraiser Licensing Board (ADALB) was held June 11 at the Division of Insurance in Boston. The Board continued its focus on an Advisory Ruling draft written by Board member William Johnson and former member Lyle Pare in regard to remedies for shops that order an aftermarket part as specific by the insurer but are then shut off by the specified vendor from purchasing that product. As a result of recent changes to the Board’s structure (including the arrival of new Chairman Michael Donovan and members Samantha Tracy [Arbella Insurance] and Peter Smith [MAPFRE Insurance]), Johnson motioned to table a vote on the draft until he and Tracy had an opportunity to go over the document. Board member Rick Starbard initiated a discussion on language featured on some insurance appraisals noting that the estimate “is subject to carrier review and may be revised.” Lastly, the Board shared a response from the Office of the Attorney General in regard to a complaint it had received against the ADALB filed by Massachusetts shop owner Gary Cloutier. Complete video of the June 11 meeting is available in the Members Only section of aaspma.org. The next ADALB meeting is scheduled for August 20 at the Division of Insurance. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

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12 July 2019

New England Automotive Report

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Support through membership in the Vendor Af nity Program!

For more information or to become a sponsor please call (617) 574-0741 or email admin@aaspma.org

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• Link to website • Quarterly copy of paid member list • AASP/MA logo for your collateral -Bi-Monthly digital advertising in Damage Report Newsletter -Up to 9 Brands, 6x/year -Your copy due to AASP of ce on the 1st of Feb, April, June, Aug, Oct, Dec -NEAR Article -1 per year -Company logo on AASP-MA website and published monthly in NEAR -Promotional yer email blast to membership -3x/year -Copy due to AASP of ce on 1st of Feb, Aug, and Dec -25% discount on advertising in NEAR

-Bi-Monthly digital advertising in Damage Report Newsletter -Up to 3 Brands, 6x/year -Your copy due to AASP of ce on the 1st of Feb, April, June, Aug, Oct, Dec -NEAR Article -1 per year -Company logo on AASP-MA website and published monthly in NEAR -Promotional yer email blast to membership -3x/year -Copy due to AASP of ce on 1st of Feb, Aug, and Dec -20% discount on advertising in NEAR

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-Bi-Monthly digital advertising in Damage Report Newsletter -Up to 1 Brand, 6x/year -Your copy due to AASP of ce on the 1st of Feb, April, June, Aug, Oct, Dec -Your company logo on AASP-MA website and published in monthly edition of NEAR -10% discount on advertising in NEAR

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New England Automotive Report July 2019 15

NEAR0719.qxp_NEAR1014 6/18/19 11:30 AM Page 16

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16 July 2019

New England Automotive Report

Audi Peabody 252 Andover Street Peabody, MA 01960 800.774.8411 Parts Direct: 978.605.2182 email: pwalke@iramotorgroup.com www.audipeabody.com

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NEAR0719.qxp_NEAR1014 6/18/19 11:30 AM Page 17

[LOCAL] NEWS

Seventh Annual Putnam Academy

Delivers Food and Fun For seven years running, the annual school-year-end Collision Repair Advisory Appreciation BBQ, hosted by the Automotive Collision Repair Technology Department at the Roger L. Putnam Vocational-Technical Academy in Springfield, has attracted hundreds of students, politicians, police representatives, collision repair industry vendors, shop owners, car enthusiasts and community leaders. To make this year’s May 30 event truly memorable, Collision Repair Instructors John Kennedy and Ray Lapite welcomed instructors from a variety of other school departments to make the evening festivities an even greater celebration of their students and vocational opportunities. Springfield City Councilor Kateri Walsh once again attended the party and presented the school with a special citation in recognition of its efforts in the community. “This is the kind of thing, as an elected official, that makes you so proud to be part of the City of Springfield,” she said. The evening included the drawing of various raffle prizes donated by West Springfield Auto Parts, Rick’s Auto Body (Springfield), LKQ/Keystone, the Putnam Electrical Shop, the Iron Workers Union, the Putnam Business Info Management Department, Putnam Auto Body Collision Center and the Putnam Sheet Metal Shop. The Putnam Collision Repair Department wished to thank Arnold’s Meats for supplying the chicken, ribs, hamburgers and hot dogs enjoyed at the BBQ and AASP/MA Board member Gary Cloutier (Cloots Auto Body; Westfield) for once again manning the smoker. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

1 Clockwise from top right: 1. AASP/MA’s Gary Cloutier was in charge of the smoker. 2. Ken Downes and his camera made another appearance at this year’s event. 3. Putnam’s Ray Lapite (second from right) kept the hot dogs and burgers coming. 4. Left to right: Putnam Collision Repair Instructor John Kennedy, Springfield School Committee member Christopher Collins, Springfield City Councilor Kateri Walsh and Springfield Public Schools Superintendent Daniel J. Warwick 5. Springfield City Councilor Kateri Walsh honored Putnam vocational instructors at this year’s BBQ.

New England Automotive Report July 2019 17

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18 July 2019

New England Automotive Report

NEAR0719.qxp_NEAR1014 6/18/19 11:30 AM Page 19

LET US TURN THEM AROUND! CONTACT

New England Automotive Report Sales Director Alicia Figurelli (973) 667-6922 alicia@grecopublishing.com

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New England Automotive Report

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New England Automotive Report July 2019 21

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[LOCAL] NEWS

AASP/MA Chapter Meetings Explore New Labor Rate Survey According to a 2018 Mitchell Industry Trends Report, Massachusetts has the lowest average Labor Rate in the country at $38.28. As the voice of automotive repairers and consumers in the Commonwealth, AASP/MA is committed to providing solutions to the many issues created by this dilemma. Recently, the group (with sponsorship support from FinishMaster) joined forces with an independent third party, National AutoBody Research (NABR), in launching the Variable Rate System (VRS) Standardized Labor Rate Survey in Massachusetts. The association used its four chapter meetings in May to educate repairers on how to utilize the survey and assist the industry in developing a clear, real-world picture of what a true market Labor Rate in the state is. Held at the Benjamin Franklin Institute of Technology in Boston, the May 29 chapter meeting also welcomed students and instructors to the discussion. 22 July 2019

New England Automotive Report

AASP/MA member Jack Lamborghini urged his fellow repairers to take the VRS Survey.

AASP/MA member Brian Bernard gave an overview of how to properly ﬁll out the survey.

AASP/MA Executive Director Evangelos “Lucky” Papageorg kicked oﬀ the meeting by doing away with the insurance industry’s myth that it pays shops based on a true “prevailing rate.” “We are a retail business, just like the mechanical industry. The mechanical industry gets paid based on their competitive rates among themselves. The [real] ‘prevailing

rate’ is what a customer is willing to pay before they’re going to walk out your door and try to go somewhere else. [Our average rate of] $38.28 is an abomination; it’s not a ‘prevailing rate’ by any stretch.” The May 29 meeting featured guest presentations by AASP/MA members Jack Lamborghini and Brian Bernard, both of Total Care Accident Repair in Raynham.

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Inspired by the opportunities presented by the VRS survey, the pair joined Papageorg at all four monthly chapter meetings to speak shop-to-shop with fellow members and encourage them to participate. Lamborghini used numbers to illustrate the dire need for rate reform in the state. “In 1989, the Labor Rate was $30 an hour. Fastforward to 2019, and the average rate is $38.28. If you do the math on this, that’s about a 24 percent increase over a 30-year period.” The shop owner noted that with the Consumer Price Index rising a whopping 119 percent since 1989, the average Massachusetts Labor Rate would need to be nearly double its present amount to simply keep pace with the amount of inflation. “That’s not even taking into account all the technology changes, equipment upgrades and everything else.” Directly addressing the students in attendance, Lamborghini stressed that Labor Rate reform would have a considerable effect on their future standing in the industry. “If I can collect a fair Labor Rate, then I can pay you a fair wage. I can also pay for education so you can continue to learn and get better. I can pay benefits for you – all of these things are critical. This is a fight that you’re a part of as well.” In addition to giving attendees a walkthrough of the online survey, Bernard made it clear that shops should enter their posted rate information – not the concessionary amounts they may operate under as part of an insurer program/referral agreement. “When you sign a piece of paper, that’s a contracted rate; that’s not a market rate. If I agree to something in a contract, typically I’m going to give something and get something in return. Those are not free market rates.” Nearly 150 collision repair facilities in the state had completed the survey by the end of May. AASP/MA and NABR are aiming for a minimum of 315 completed surveys in order to make the compiled data statistically valid and reliable. There are approximately 1,700 body shops currently in operation in the Commonwealth. As AASP/MA moves forward with the survey, Papageorg urged attendees to remain vigilant and active – and to spread the word. “All that is necessary for the triumph of evil is [for] good men to do nothing. The fact that you’re here at the meeting shows that you’re good men trying to do the right thing. Anyone who comes to these meetings is trying to do something to educate themselves and pull more people into the association. We need to have a much larger body of members, which then increases our voice. When you come to these meetings, bring a guest.” PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

AASP/MA SHOP STEPS UP LABOR RATE CAMPAIGN For longtime AASP/MA member and recent chapter meeting presenter Jack Lamborghini (Total Care Accident Repair; Raynham), taking an active role in the association’s push for the VRS Standardized Labor Rate Survey is an absolute necessity. A regular association member since the mid-1980s, Lamborghini has seen Labor Rate conditions worsen for the last three-plus decades. For years, he attempted to combat the frozen rate by streamlining his in-shop processes as much as possible to remain profitable – until he realized he had gone as far as he could. “There’s obviously waste in every business. The question becomes, ‘How much waste can you take out of the system and your processes to allow you to fit more vehicles in quicker and be more profitable?’ I’ve been on that bandwagon for the last 19 years; the problem is that it’s now to the point where you can only take so much waste out. The price eventually has to go up.” In his mind, elevating the Labor Rate isn’t just a matter of increasing shop profits; it’s about keeping consumers safe in the automobiles leaving bays throughout the Commonwealth. “Technology has increased dramatically, and liability issues have become greater and greater for repairers from a safety standpoint. As the manufacturers continue to document how the repairs should be performed based on how the vehicles are made, they add a tremendous amount of cost to repairing those automobiles. Consumers expect to get back a vehicle that looks like it was never damaged and that they’re comfortable putting their family members in.” These realities hit home for Lamborghini’s Total Care Accident Repair business partner, Brian Bernard, who also took time out of his schedule to give presentations on the survey at the May chapter meetings and support everything AASP/MA hopes to achieve with the endeavor. “I instantly knew how impactful it would be to have access to that kind of information. What a great world it’ll be here in Massachusetts when other people start signing in [to the survey] and understanding some of this stuff instead of having a ‘learned helplessness’ attitude that’s way too predominant in our industry at this point.” As the VRS Standardized Labor Rate Survey moves forward, Lamborghini has a clear message for any Massachusetts shop owner still on the fence about getting involved. “Stop doing nothing; take the survey! If you are a registered repair shop in Massachusetts and ever want to see the Labor Rate get to somewhere close to being fair and equitable, this is the opportunity to get our voice out there that $38.28 is not even close to what it takes to run a collision repair business.” PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

New England Automotive Report July 2019 23

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New England Automotive Report

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[NATIONAL] NEWS By Joel Gausten

AASP/MA Represented at National AASP Board Meeting AASP/MA President Molly Brodeur and Executive Director Evangelos “Lucky” Papageorg recently represented the association at the Alliance of Automotive Service Providers (AASP) National Board meeting at Autoshop Solutions in Apex, NC. The semi-annual gathering allowed various AASP state affiliates to share updates and ideas on their various activities and initiatives on behalf of the industry. On the legislative front, Brodeur noted that AASP/MA has refiled two bills from the previous session. In addition to the latest incarnation of its long-running Labor Rate Bill, the association is promoting legislation that aims to move the Auto Damage Appraiser Licensing Board (ADALB) from the Division of Insurance to the Department of Public Licensure, which oversees all other licensing in the state. AASP/MA believes this move will enable the ADALB to function as a more independent entity. This bill would also expand the size of the Board to include a representative from the Attorney General’s Office and a consumer

representative chosen by the Attorney General. Additionally, the ADALB chairperson would be selected by the Department of Public Licensure. Currently, the Board is comprised of a chairman (chosen by the Commissioner of Insurance) and two representatives each from the collision repair and insurance industries. “The reason why we decided to go forward with [this bill] a couple of years ago was that the Governor wanted to see all the licenses in the state underneath that [Public Licensure] umbrella, so we felt like we had a good chance to get it in front of him to sign. That is our priority focus.” Papageorg updated the other aﬃliate state attendees on AASP/MA’s eﬀorts to rebuild its chapter structure throughout Massachusetts. Currently, monthly chapter meetings are held in the western, midstate, southeastern and northeastern regions of the state. These events are typically held at vocational schools as a way to connect instructors and students with area shops and vendors. Not surprisingly, the association’s new Variable Rate System (VRS) Standardized Labor Rate Survey through National AutoBody Research (NABR) has been a major agenda item at the most recent chapter gatherings. In addition to educating members on how to properly complete the Labor Rate Survey, AASP/MA is actively promoting NABR’s BillableGenie online service,

AASP/MA’s Molly Brodeur and Lucky Papageorg (below) represented the association in Apex, NC.

which (according to the company) provides “an independent, centralized source of actual data on insurer-paid not-included procedures and operations, Labor Rates, Labor Rate concessions and other manually entered estimate line items.” “[Users] upload examples, and they can see what an insurer paid for something in any other states compared to Massachusetts,” explained Papageorg. “So, when insurers come to us and say, ‘We don’t pay for that procedure,’ we have the documentation to be able to substantiate that they did pay for that.” In closing, he oﬀered some personal perspectives on the need for a Labor Rate increase in the state despite the pushback typically given by the insurance industry. “We’re a retail business…let the rates go where they should be. I don’t want to pay higher rates on my insurance no more than I want anybody else to. But if that’s what the situation demands, so be it.” Information on AASP National is available at autoserviceproviders.com. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

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[FEATURE] BY Joel Gausten

A Repair Nightmare:

AUT M TIVE

Editor Tells All

Welcome to my collision repair fiasco. A few months ago, I was inside my parked car outside a Radio Shack (which actually still exists in New Hampshire) when a driver attempting to park in the adjacent space grossly misjudged the distance and plowed into me. Although I was physically unharmed in this minor collision, my car suffered a dented-up driver’s side fender and front bumper. In all my years of covering the industry, I had never once heard of the company listed on the at-fault driver’s insurance card. That raised a red flag in my mind, so I immediately decided to bite the bullet and file a claim with my insurer, GEICO, instead of trying to deal with a company I knew absolutely nothing about. Right off the bat, I knew I wanted my vehicle repaired at a GEICO Auto Repair Xpress shop. While I’m sure there are reputable independent shops in my current state of New Hampshire, the looks of those closest to me – complete with filthy, unwelcoming exteriors – don’t fill me with a lot of confidence. (I even have acquaintances up here who’ve had their damaged cars towed down to Massachusetts for repairs instead of going to one of these “facilities.”) I figured that going with the closest GEICO shop – even when it was a good 35 minutes away from my home – would at least provide some level of checks and balances during my repair. To GEICO’s credit, the claims representative I got on the phone stressed that I did not have to use one of the company’s program shops. This message was immediately repeated to me the moment I met up with the GEICO appraiser at the Auto Repair Xpress location. Let’s talk about the shop. It is a very large repair facility that services a prominent dealership in the area. As soon as I entered the reception area, I spotted a display with brochures touting the benefits of I-CAR Gold Class and a sign extolling the virtues of vehicle scanning. The place was also quite clean, and the staff members I encountered were polite and professional. As a vehicle owner, I like to drive my cars – which are always economy models – until I can’t get another

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New England Automotive Report

second of life out of them. That’s why I currently drive a 2008 Toyota Yaris with 180,000-plus miles. To be fair, I didn’t expect my insurer to supply me with fresh and shiny OEM parts for a car of that age, and I went into the repair process happy to receive highquality used parts for the damaged fender and bumper. Aftermarket parts were not an option in my mind. Of course, aftermarket is exactly what the GEICO estimator wanted to put on my car. He explained that since I had filed the claim through them, they would only pay for repair work up to the limits of my policy and pursue the most cost-effective way to do so. First of all, I was not the at-fault driver; shouldn’t this (at least in principle) be a blank check since GEICO would later handle this through subrogation anyway? Second, shouldn’t the word “safest” replace “costeffective” when an insurer lays out its plans for a repair? Why would an estimator actually tell a policyholder that they’re going for the cheapest option? In any event, I told the GEICO estimator that I would not accept any aftermarket parts on my vehicle unless he could provide me with the crash test data for those products. He responded by saying that the parts were certified. I still refused to accept them and told him I would gladly pay the difference for high-quality used parts. Ultimately, he wrote to repair the bumper and replace the fender with a used part (but only if that part was “insurer quality.”) The estimate came to $990.05 for a three-day repair. Naturally, it wasn’t a three-day job. In addition to the usual supplement, the shop was unable to source a decent used fender in the area and eventually went with the new OEM option (which my insurer paid for, thus earning them a check in my plus column). I finally got the call to pick up the car on the ninth business day. After running errands all day, I got to the shop as the sun was beginning to set. I walked in the office, signed the necessary paperwork, paid the bill (via the money I had already received from GEICO – another positive checkmark)…and was then told to go find my car in the parking lot.

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Even with the limited outside light, I could see there were issues with my car as I approached it. For one thing, the edge guard above the front driver’s side tire was crooked, while the rubber fender trim wasn’t fully attached to the car and sticking out more than it should. Exhausted and cranky after a very busy afternoon (and with the shop minutes away from closing), I decided to let it slide for the time being and just get home for the evening. Turning my key in the driver’s side door lock, I felt much stronger mechanical resistance than usual. I got in the car, started it, backed up about six inches and thought, “No! I’m going to get them to address these things now.” I drove the car back into the parking space, got out and locked the driver’s side door out of habit. Hmm…the resistance from the lock was still pretty strong. I then went to unlock it and…the door wouldn’t open. At all. Something was definitely wrong. After going back to the reception area and waiting several minutes, the technician who washed the car – thinking that the lock might have frozen after it was brought outside (remember, this story occurs in late 2018) – walked me out to my car to have a look at the door. The door still didn’t budge. “I’m not sure what’s going on,” the tech said, shaking his head. “I’ve only been here a week.” After later explaining the situation to the shop’s estimator (who presumably had a little more than five days’ experience at the shop), it was determined that the door had been put on incorrectly after being removed during the repair. The car was brought back in the bay (after a tech crawled in through the passenger side), and the issue was fixed just as the shop closed for the weekend. Unfortunately, I was informed that I would have to come back the following week to address the other issues. I returned to the shop the following Wednesday; within an hour, the edge guard and fender trim looked better than before. As I got in my car, I joked to the shop’s estimator, “Don’t take this the wrong way, but I hope I never have to see you again.” We both chuckled as I drove away. That evening, the power in my neighborhood went out for several hours. As I drove down the road to run a quick errand, I couldn’t help but notice that my headlights seemed dimmer than usual. I chalked it up to my pitch-black surroundings and forgot about it. Two nights later, I was back on the road at night – this time driving a long distance for something I couldn’t cancel. Again, the lights looked strange. I pulled into the nearest rest area…and stared in disbelief at a completely dead driver’s side headlight – which of course had been removed and reinstalled by the shop

during the repair. “Furious” is the G-rated description of how I felt. Once I arrived at the shop for yet another rerepair, I was greeted by a new GEICO rep who had no clue why I was there. Wonderful. After filling him in, the shop’s estimator came out. “This is the third time I’ve gone back and forth with you on this car,” I said. “Take six months to get this right if you need to; I don’t care. I don’t want to be bothered until this car is perfect. If I have to come back here a fourth time, it will be in connection with a consumer fraud case.” After I received the requisite showering of “yes, sir,” I drove off in another rental car. Two days later, I picked up my car after an out-of-state work trip. What began as a $990.05/three-day repair turned into $1,596.14, 11 days and three re-repairs. Unbelievable. AASP/MA is committed to representing the interests of Massachusetts automotive consumers. Well, here are some questions this consumer a few miles north has after going through this ordeal: Why do insurers think it’s reasonable to go for the cheapest repair option when some customers – like yours truly - select a policy based on coverage and not just price? The cute little character in GEICO’s commercials that talks about how much I can “save” on insurance didn’t encourage my purchasing decision – the quality of coverage I thought I was paying for did. I deserved more than the “most cost-effective” repair method possible from my insurer. Shame on them. Where is I-CAR in all of this? This was a Gold Class shop. Embarrassing. Talk about a stain on the I-CAR brand. Why is this shop allowed to stay on GEICO’s program and continue to perform dealership work?

I wish I could say this was an isolated situation, but we all KNOW the truth that this happens every day in this industry. I just happen to be an educated consumer with a voice. Not everyone out there is so fortunate. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

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New England Automotive Report

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[COVER] STORY BY Joel Gausten

The collision industry deals with a staggering array of letters and abbreviations. While it is understandably diﬃcult for even the most conscientious repair professional to keep track of it all, everyone knows what an “OEM” part is.

Or do they? While AASP/MA and other state associations focus on issues close to home, the national automotive scene is growing increasingly concerned over a host of terms that many feel are muddying the waters over the true definition of an original equipment manufacturer product. “Opt-OE,” “Alt-OE” or “Surplus OE” are terms commonly used to identify original automaker parts that have been sourced outside of traditional OEM dealers/suppliers. While the presence of “OE” would suggest that recipients of these parts are utilizing proper, OEM-approved products, there is considerable confusion and ambiguity in regard to whether such parts truly fulfill a shop’s obligation to perform a complete repair as specified by the manufacturer. This issue is at the heart of a late 2017 lawsuit filed by Hyundai Motor America, Inc. against Direct Technologies International (DTI, Inc.), an independent parts vendor with an extensive online presence. Hyundai’s suit alleges a host of offenses, including trademark infringement, false designation of origin, trademark dilution, unfair competition and violation of the North Carolina Unfair and Deceptive Trade Practices Act. In its filing, the auto manufacturer contended that the “Hyundai-branded parts” sold by DTI through its website and elsewhere were not meant for sale in the United States and were not the same as Hyundaibranded products available in this country. Additionally, Hyundai claimed that DTI “does not offer a warranty on the Hyundai-branded parts it sells that is equivalent to the applicable HMA warranties...By selling the nongenuine Hyundai parts in the United States, without Hyundai’s consent, DTI has deprived Hyundai of its ability to control the quality of its product and misrepresented to the dealers and/or consumers the origin and quality of the DTI parts.” Although DTI admitted to “importing, promoting, offering for sale, advertising on the internet through its website […] and through other media, and/or selling Hyundai-branded parts,” the company denied having “knowledge or information sufficient to form a belief about the truth of an allegation that the parts sold by DTI were intended for sale abroad.” DTI responded to

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the allegations by countersuing Hyundai. One of the allegations made in the DTI suit was that the automaker has engaged in “predatory and/or anticompetitive conduct” by tying its sales of replacement parts for Hyundai automobiles to its vehicle warranty and extended vehicle warranty programs. Hyundai and DTI each filed a motion to have the other party’s suit dismissed. After both motions were denied, a federal trial was set for next year to hear both cases. Responding to the escalating issues surrounding parts definitions, the Collision Industry Conference (CIC) Parts and Materials Committee – currently comprised of nearly 230 inter-industry members nationwide who have participated in numerous one-hour committee conference calls since late January – held a special panel discussion on the topic in Nashville earlier this spring. Parts and Materials Committee Co-Chair Ken Weiss (SSF Imported Parts) admitted that the group was essentially “deadlocked” on where to go next in developing a coherent and universal classification for “Opt-OE” and “Alt-OE.” “We’ve got seven – maybe eight or nine – industry platforms that all take this and call it something different. If we can put an industry consensus label on this part, then we can put pressure on all the platforms to adopt it. If you get a CCC estimate that says ‘x’ and a Mitchell estimate that may say ‘y,’ that’s what we’re trying to get consensus on.” Not surprisingly, this situation has spawned strong responses from the regional and national collision repair communities. “In my opinion, an OEM part is a part that is manufactured by the OE and delivered through the appropriate channels with the appropriate markings, packaging and warranties,” offers AASP/MA President Molly Brodeur. “As many shops are traveling towards or have already reached certifications, I think ‘Alt-OE’ and ‘Opt-OE’ leave too much room for interpretation and can’t be declared an OEM part. I think it has to be eliminated from your potential part choices.” The Society of Collision Repair Specialists (SCRS) is one national group following this matter very closely. “SCRS tends to be very much aligned with the auto manufacturers on how we define parts,” commented Executive Director Aaron Schulenburg during a recent SCRS Open Board of Directors Meeting. “An OEM part is one that is made for and by a manufacturer, it comes in manufacturer packaging and comes from an authorized supply channel, such as a dealer. It would also come with

an OEM warranty. If a part doesn’t meet those four categories, I think many of us believe it’s disingenuous to identify that as an OEM part.” Mark Allen, collision program manager for Audi of America, agrees with this assessment. “Realistically, an OE part is a part that’s sold by a franchised Audi of America dealer and brought to market through the established logistical channels established by Audi of America, period. There is no such thing as ‘Alt OE.’ As far as we’re concerned, we have no ‘Alt OE,’ and there is only one source for OE part. That’s it. A part coming in from other markets or sources is not an OE part. It does not carry an OE warranty, and I think it’s awfully brash for someone to expect an OE to cover something that hasn’t gone through their approved franchised sales channel.” With a high-proﬁle lawsuit in the news and growing pushback from various segments of the industry, it appears that this topic will provide a bumpy ride for concerned parties in the months to come. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

New England Automotive Report July 2019 35

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36 July 2019

New England Automotive Report

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Contact these Ford or Lincoln Mercury dealers for all your parts needs: Imperial Ford 6 Uxbridge Road Mendon, MA 01756 Toll Free Parts: 877-272-0332 Toll Free Fax: 877-800-6316 Call us for your wholesale parts needs

Sarat Ford Lincoln Mercury 245 Springfield Street Agawam, MA 01001 413-786-0430 Fax: 413-789-3715 www.saratford.com

Sentry Ford Lincoln 4100 Mystic Valley Parkway Medford, MA 02155 Parts: 617-506-6309 Fax: 781-874-9934 E-mail: pnewell@sentryautogroup.com

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[LEGAL] PERSPECTIVE by James A. Castleman, Esq.

Using the “Waiver” Method to Get Your Customer’s

AUTHORIZATION

FOR REPAIRS

Previously, I have written at length about the importance of collision repair shops getting their customers’ authorization for all the repairs they make. In fact, it is a direct violation of the Massachusetts Attorney General’s regulations to charge your customers for repairs they have not authorized. It doesn’t matter what your customer’s insurer may have written for an appraisal, and it doesn’t matter what you may have negotiated with that insurer. If your customer has not authorized the repairs that you made, then they have the right to remove their repaired vehicle from your shop and pay you nothing for that work. If you try to collect, or if you try to keep the car to enforce your garage keeper’s lien, then you may be liable for up to three times whatever costs your customer incurs (plus their legal fees). On top of that, your Motor Vehicle Repair Shop registration could be at risk for unlawfully preventing the owner of the vehicle from recovering it.

Acceptable Ways to Obtain Customer Authorization Under the applicable Attorney General’s regulation, with a few limited exceptions, there are only four acceptable ways to obtain your customer’s authorization for repairs: (1) The first is to get “written authorization signed by the customer, listing the specific repairs to be performed and the total price to be paid for such repairs, including parts and labor.” This is the preferred way to obtain customer authorization, but there are problems with this for most collision repairs. How do you get authorization up front before you tear the car down and inspect all damage? How do you know what you are going to do or how much you are going to charge before you have negotiated the job with your customer’s insurer? What do you do when you discover hidden damage? There are ways to handle these issues (e.g., see option 3 later in this article), but they can be time-consuming, may significantly delay the time for performing repairs and may not always work. (2) The second way is to get a written authorization signed for the specific repairs to be performed when “the charges for such repairs, including parts and labor, are displayed in a clear and conspicuous manner on the premises of the repair shop.” This is more applicable to mechanical repairs for something like an oil change or tire rotation. It really doesn’t work for collision repairs, where each job is different. (3) The third way applies whenever the nature and/or cost of repairs is not initially known – such as when you need to tear down a vehicle to analyze damage or negotiate the cost of repairs with your customer’s insurer. In this situation, you still must obtain your customer’s specific authorization before beginning repairs, but you can get that authorization either orally or in writing. If you get written authorization, then it still must be detailed. If you get oral authorization, then the regulation requires that you make a written record of certain particular information regarding the person you spoke to, the nature of the authorization, the specific repairs that were authorized, the employee who spoke to the customer and what phone number was used in order to speak with that customer. (4) The fourth way is to use the so-called “waiver” method, which is spelled out in the Attorney General’s regulations. If you use this method, then you still must get your customer’s written authorization, but it need not be for the specific repairs that you make or the specific cost of those repairs. In order to use this method, you must follow some stringent rules. Rules for Using the Waiver Method In order to use the “waiver” method of obtaining your customer’s authorization for repairs, you must do the following:

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Use the speciﬁc language set out in the applicable regulations. The Attorney General has set out the precise language that you must use to get your customer’s authorization using this method. The language is: Waiver I understand that I have the right to know before authorizing any repairs what the repairs to my car will be and what their cost will be. You need not obtain approval from me for repairs or inform me prior to performing repairs what the repairs are or their cost, if the total amount for repairs does not exceed $ .

Signature You cannot vary this language! Make sure that your customer knows what they are signing. The customer’s signature on the waiver must be made in “a knowing, voluntary and intelligent manner.” This is critical. Do not in any way try to hide what you are going to do from your customer. Make sure they know if you are going to make repairs that are different than what was written by their insurer. Make sure they know if you charge a different Labor Rate than what is written by their insurer. Make sure they know if you are going to use different parts than may be specified by their insurer. Make sure they know if you are going to charge them more than their insurer may authorize – or if you are going to charge them less than their insurer may authorize. Do not leave your customer with the impression that you are going to make repairs as written by their insurer if that is not the case. Make sure that you get a separate signature from your customer on the waiver form. You can either use the waiver language on a completely separate document, or you can incorporate it into your repair order. In either case, you are required to get a signature on the waiver form separate from the signature that you get for the repair order. Make sure the language of the waiver is printed in “clear and conspicuous” type. This is what the regulation specifically requires. After all, your customer cannot knowingly sign a waiver they cannot read. Make sure that you fill in an actual cost for repairs before getting your customer’s signature, and make sure the dollar number is realistic. I have seen some shops try to insert “ACV” on the dollar line, and I have seen other shops fill in numbers that are ridiculously high or ridiculously low. I am not sure if the “ACV” language would work if challenged in court, and I would not want to try to find out. Make sure that when repairs are completed, you give your customer an itemized final repair bill for the repairs you actually made. The regulations require that you always do this, no matter how you obtain customer authorization. It is particularly important, however, when you use the waiver method. Among other things, the final bill must itemize: the exact repairs that were made; the exact parts that were utilized, including name and number of the part, and the price for each part; the number of hours of labor that you have charged for, whether such hours were actual or “flat rate” hours (almost always the case for collision repairs) and the charge for each hour of labor; if a part was not new, then whether it was used, reconditioned or rebuilt; and the total amount charged for parts and labor.

Some Final Thoughts If used correctly, utilizing the waiver method for obtaining your customer’s authorization for repairs can work well for many shops in many situations. But you must know what the rules are, and you must follow them. If you belong to AASP/MA, the association has a template Repair Authorization Form that you can adapt for your own use. The AASP/MA form allows you to check a box for the type of repair authorization being used for any particular job. One of the options is the

waiver method of authorization, including the exact language prescribed by the governing regulation. If you are an AASP/MA member, review that form and consider using it. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

Attorney James Castleman is a managing member of Paster, Rice & Castleman, LLC in Quincy, MA. He can be reached at (617) 472-3424 or at jcastleman@prclawoffice.com.

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GENUINE NISSAN PARTS

MAKE ALL THE DIFFERENCE.

Only Genuine Nissan Parts deliver the fit, reliability, and performance to meet your shopâ&#x20AC;&#x2122;s collision repair needs. So keep it original, and keep it real with Genuine Nissan Parts. Contact these Nissan dealers for all your parts needs: Mastria Nissan 1305 New State Highway Raynham, MA 02767 Direct Toll Free: 800-248-2458 Direct Fax: 508-802-6118 E-mail: parts@mastrianissan.com Web: www.mastria.com

Kelly Nissan of Lynnfield 275 Broadway (Route 1) Lynnfield, MA 01940 Toll Free: 1-800-698-9280 Fax: 781-598-8026 E-mail: BSherman@Kellyauto.com

Kelly Nissan of Woburn 95 Cedar Street Woburn, MA 01801 Phone: 781-835-3510 Fax: 781-835-3580 E-mail: mbosma@kellyauto.com www.kellyauto.com

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Find us on Parts Line:

Prompt &â&#x20AC;&#x2C6; Dependable Delivery

508.699.4700

Fax Line: 508.699.4761 Parts Hours: Mon-Sat: 7:30-5:00 270 East Washington St. North Attleboro, MA 02760

www.firsthyundai.com

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Experienced and Professional Parts Team

774.888.6666

Parts Line:

Fax Line: 508.673.6338 Parts Hours: Mon-Sat: 7:30-5:00 292 William S. Canning Blvd. Fall River, MA 02721

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Ask about our Competitive Prices Find us on Parts Line:

508.316.8410

Fax Line: 508.316.8397 Parts Hours: Mon-Sat: 7:30-5:00 280 East Washington St. North Attleboro, MA 02760

www.firstchryslerma.com

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2019 - 2020 as provided for in this contract.

REV 5/19 New England Automotive Report July 2019 43

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SIMPLY BRILLIANT

OUR BEST BASECOAT EVER #SWrefinishsolutions sherwin-automotive.com/ultra9k

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It Takes Genuine Honda Collision Repair Parts To Achieve a Genuine Honda Fit. Honda collision repair parts are engineered and manufactured to Honda standards. In the collision-repair business, time is money, and you canâ&#x20AC;&#x2122;t waste time on parts that almost fit properly. Use Genuine Honda replacement parts. Your reputation depends on it. For Genuine Honda parts, contact these Authorized Honda dealers.

Bernardi Honda 960 Worcester Road Natick, MA 01760 Parts Direct: 800-247-3033 FAX: 508-651-1220 www.bernardihonda.com

Lia Honda of Northampton 293 King Street Northampton, MA 01060 Toll Free: 800-369-7889 Direct: 1-413-586-6043 FAX: 1-413-585-0502 www.liahondanorthampton.com

Honda North 382 Newbury Street Danvers, MA 01923 Toll Free: 800-882-9797 FAX: 978-774-9483 e-mail: eadams@iclautos.com www.hondanorth.com

Kelly Honda 540 Lynnway Rt. 1A Lynn, MA 01905 Parts Direct: 800-779-7466 FAX: 781-595-2898 e-mail: mpsomosjr@kellyauto.com

Honda of Enfield 20 Palomba Drive Enfield, CT 06082 Toll Free: 800-222-6632 FAX: 860-253-5419 www.liahondaofenfield.com

Schaller Honda 1 Veterans Drive New Britain, CT 06051 Toll Free: 800-382-4525 Direct: 860-826-2080 FAX: 860-826-2083 e-mail: jkiniry@schallerauto.com www.schallerauto.com

Lundgren Honda of Auburn 525 Washington Street Auburn, MA 01501 Toll Free: 800-777-2044 FAX: 508-721-0872 e-mail:pmccarthy@lhonda.com www.lhonda.com

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EXECUTIVE DIRECTOR’S MESSAGE continued from page 11 and protecting the consumers in Massachusetts. We have been working very hard to better our industry by providing you with tools that will help you succeed. The next step is yours! If you are reading this and you are not an AASP/MA member, you need to join and strengthen our voice and ability to make changes. If you are a member, it is incumbent upon you to reach out to non-members to tell them why you are a member and about the beneﬁts you derive. We have accomplished much in the last year. But there is still so much more to come!! PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

AASP/MA EXECUTIVE DIRECTOR EVANGELOS “LUCKY” PAPAGEORG can be reached at (617) 574-0741 or lucky@aaspma.org

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