New England Automotive Report September 2019

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PLUS: September Meeting Preview GEICO’s Total Loss Defeat A Deeper Talent Pool

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2 September 2019

New England Automotive Report

NEAR0919.qxp_NEAR1014 8/15/19 2:02 PM Page 3

NOTHING MATCHES TODAY’S COLORS BETTER Ford Ruby Red. Inspired by the vivid hues of the ruby gemstone.

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2019 - 2020 as provided for in this contract.

REV 5/19

NEAR0919.qxp_NEAR1014 8/15/19 2:02 PM Page 5

RAE is North America’s premier supplier of OE certified repair equipment.

Our OE approved systems and products are the “preferred choice” for use in collision repair because the system or products have already been prescreened by the car manufacturer.

PHONE: 732-495-7900 FAX: 732-495-7904 E-MAIL: bill@rae1.com www.raeservice.com VISIT US ON FACEBOOK www.facebook.com/ReliableAutomotiveEquipment

NEAR0919.qxp_NEAR1014 8/15/19 2:02 PM Page 6

NEAR0919.qxp_NEAR1014 8/15/19 2:02 PM Page 7

September 2019 • Volume 17, No. 9

DEPARTMENTS

CONTENTS FEATURES

VICE PRESIDENT’S MESSAGE By Kevin Gallerani 8 | Opting out of “Opt-OE”

EXECUTIVE DIRECTOR’S MESSAGE

By Evangelos “Lucky” Papageorg

12 | Erosion

LOCAL NEWS By Alana Bonillo 22 | Hate the Rate? Don’t Miss AASP/MA’s Educational Labor Rate Event 26 | Lynn Vocational Technical Institute Recognized by SkillsUSA

NATIONAL NEWS 30 | cPrax Internet Marketing Joins CIC Workforce Effort 32 | SCRS Addresses Importance of Vehicle Safety Inspections

ALSO THIS ISSUE 4 | AASP/MA MEMBERSHIP APPLICATION 12 | WHERE’S LUCKY? AASP/MA CHAPTER MEETING SCHEDULE 16 | AASP/MA VENDOR AFFINITY PROGRAM SPOTLIGHT 17 | AASP/MA VENDOR AFFINITY PROGRAM SPONSORS

ADVERTISERS’ INDEX Accudraft Paint Booths ................................OBC American Honda Motor Co. ............................28 Audi Group ....................................................41 Best Chevrolet/Best CDJR ..............................IFC BMW Group ..........................................................18 BMW/Mini of Warwick ..................................33 Boch Chevrolet ........................................25, 35 Boch Genesis ................................................35 Boch Hyundai ................................................25 Colonial Auto Group ........................................9 Empire Auto Parts ..........................................46 Ford Group....................................................37

34 | COVER STORY By Joel Gausten

Muddied Waters: The Industry’s Call for Parts Clarity

38 | LEGAL PERSPECTIVE

By James Castleman

Getting Nickeled and Dimed on Total Loss Settlements

Fred Beans Parts ............................................35 Genesis of Norwood ..................................25/35 Honda Group ................................................45 Hyundai Group ..............................................11 Imperial Ford ................................................37 Ira Subaru ......................................................11 Ira Toyota of Danvers ......................................10 Kelly Automotive Group ................................IBC Kia Group ......................................................11 Linder’s, Inc. ................................................25 Long Automotive Group ..................................14 Mazda Group ................................................36 McGovern Chrysler Jeep Dodge Ram ................42 Mopar Group ................................................15

Nissan Group ................................................44 PPG................................................................3 Quirk Wholesale Parts ....................................31 Reliable Automotive Equipment ........................5 Sarat Ford Lincoln ..........................................26 Sentry Group ................................................43 Sherwin-Williams..........................................29 Subaru Group ................................................20 Tasca Group ..................................................27 Toyota Group ................................................39 Volvo Group ..................................................24 VW Group ....................................................21 Wellesley Toyota/Scion ..................................46 Wheel Collision Center ....................................13 New England Automotive Report September 2019 7

NEAR0919.qxp_NEAR1014 8/15/19 2:03 PM Page 8

VICE PRESIDENT’S MESSAGE

Opting Out of

“Opt-OE”

By Kevin Gallerani

If you’ve been reading New England Automotive Report and keeping up with general industry news in recent months, then you’re aware that various entities – including the Society of Collision Repair Specialists (SCRS) and the Collision Industry Conference (CIC) – are currently working to determine universal definitions for “Opt-OE,” “Alt-OE” or “Surplus OE” parts. Based on this month’s cover story and the previous coverage in this magazine, this issue is far from being solved. However, I haven’t let the delays in the inter-industry’s progress prevent me from taking action at my shop.

Simply put, I never buy any parts that have a word attached to “OE” in the description. In my view, there’s too much risk involved. How am I supposed to know what these parts mean if even the automakers can’t agree on a clear definition? The only time I use the term “Opt-OE” is as an internal specification at my shop when I’m denoting an OEM part that has been price matched by a dealer as an alternative to using aftermarket. I code these parts as “Opt-OE” in my management system as a way to monitor how many times we work with them, but they are always true OEM parts.

N

E

W

E

N

Until the industry figures this out, I won’t mess around with any of the alternative distinctions being placed on “OEM” parts. If the part has any verbiage in addition to “OE” or “OEM” in its name, then it’s not for me.

PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

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

G

L

A

N

D

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

WWW.AASPMA.ORG 8 September 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

NEAR0919.qxp_NEAR1014 8/15/19 2:03 PM Page 9

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COLONIAL HONDA OF DARTMOUTH 225 State Road (Rte. 6) Dartmouth, MA. 02747 Parts Direct: 508-997-2919 FAX Number: 508-730-6578

CITY SIDE SUBARU 790 Pleasant Street Belmont, MA. 02478 Phone Number: 617-826-5013 FAX Number: 617-489-0733

COLONIAL FORD OF PLYMOUTH 11 Pilgrim Hill Road Plymouth, MA. 02360 Phone Number: 800-233-8109 FAX Number: 508-830-1658

NORTH END SUBARU 757 Chase Road (Rte. 13) Lunenburg, MA. 01462 Phone Number: 877-289-0053 FAX Number: 978-582-9843

COLONIAL CHRYSLER JEEP DODGE-RAM 24 Coolidge Street (Rte. 62) Hudson, MA. 01749 Phone Number: 978-568-8000 FAX Number: 978-562-1213

COLONIAL FORD OF MARLBOROUGH 428 Maple Street Marlborough, MA. 01752 Phone Number: 888-460-1125 FAX Number: 508-460-3464

COLONIAL SOUTH CHRYSLER JEEP DODGE-RAM 42 State Road (Rte. 6) Dartmouth, MA. 02747 Phone Number: 508-984-1900 FAX Number: 508-996-5801

COLONIAL CADILLAC 201 Cambridge Road Woburn, MA. 01801 Phone Number: 781-935-7009 FAX Number: 781-933-7728

NORTH END MAZDA 757 Chase Road Lunenburg, MA. 01462 Phone Number: 800-322-1241 FAX Number: 978-582-9841

COLONIAL VOLKSWAGEN COLONIAL SOUTH CHEVROLET 89 Turnpike Road (Rte. 9) 361 State Road (Rte. 6) Westborough, MA. 01581 Dartmouth, MA. 02747 Phone Number: 888-322-6570 Phone Number: 508-996-6266 FAX Number: 508-616-0445 FAX Number: 508-979-1219 COLONIAL VOLKSWAGEN OF MEDFORD 162 Mystic Avenue Medford, MA. 02155 Phone Number: 781-475-5200 FAX Number: 781-391-3506

WELLESLEY VOLKSWAGEN 231 Linden Street Wellesley, MA. 02482 Phone Number: 800-228-8344 FAX Number: 781-237-6024 Contact: Dan Bettencourt / Wholesale Parts Manager

COLONIAL CHEVROLET 171 Great Road Acton, MA. 01720 Phone Number: 800-787-2787 FAX Number: 978-263-8587

COLONIAL WEST CHEVROLET 314 John Fitch Highway Fitchburg, MA. 01420 Phone Number: 978-345-5532 FAX Number: 978-345-1152

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10 September 2019

New England Automotive Report

NEAR0919.qxp_NEAR1014 8/15/19 2:03 PM Page 11

Make Quality Your Goal.

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Bald Hill Kia 1021 Bald Hill Road Warwick, RI 02886 Parts Direct: (800) 822-3015 www.baldhillkia.com

Quirk Auto Dealers 115 E. Howard St. Quincy, MA 02169 Toll Free: (877) 707-8475

HYUNDAI IS PROUD OF ITS REPUTATION FOR QUALITY AND SERVICE. SO ARE THE DEALERS AND BODY SHOPS WHO RELY ON GENUINE HYUNDAI PARTS. TO MAKE CERTAIN THAT YOU GET THE RIGHT HYUNDAI PART, ASK FOR A HYUNDAI WHOLESALE PARTS SPECIALIST.

For Genuine Hyundai parts, contact an Authorized Hyundai Dealer.

HERB CHAMBERS HYUNDAI 735 Southbridge Street Auburn, MA 01501 TOLL FREE: 800-767-1898 FAX: 508-832-6026 EMAIL: pobrien@herbchambers.com www.herbchambershyundaiofauburn.com

BOCH HYUNDAI 391 Boston Providence Hwy Route 1, The Automile Norwood, MA 02062 PARTS LINE: 781-762-9210 TOLL FREE: 800-559-9210 bchwholesale@boch.com

New England Automotive Report September 2019 11

NEAR0919.qxp_NEAR1014 8/15/19 2:03 PM Page 12

EXECUTIVE DIRECTOR’S MESSAGE

Erosion EVANGELOS “LUCKY” PAPAGEORG

The Merriam-Webster Dictionary defines erosion in part as “the gradual destruction of something by forces; the process by which something is eroded or worn away.” (Emphasis added.) I can think of no better way to describe what has been happening

on the grand scale to the collision repair industry – not only here in Massachusetts, but across the country. The ability to draw fresh talent into the collision repair industry – be it technicians or managerial personnel – has been systematically destroyed through

the artificially suppressed Labor Rate. Nowhere is it more obvious than here in the Commonwealth, where collision repairers are reimbursed at the LOWEST Labor Rate in the country at an average of $38.28 per labor hour (based on a 2018 Mitchell study). This is in a

Where’s Lucky?

Visiting Boston/Southeast

AASP/MA Chapter Meeting Schedule

M

Visiting Western Visiting Midstate

In the second week of September, Lucky will be visiting the Western region and hosting a chapter meeting on September 11. (Location TBD.)

M

Visiting Boston/Northeast

M

He will be visiting shops in the Midstate region during the third week of September.

During the fourth week of September, he is visiting shops in the Boston/Northeast region and will host a chapter meeting on September 25. (Location TBD.) AASP/MA will present its fall meeting on Saturday, September 28 at Supercharged Entertainment (Wrentham), featuring Sam and Richard Valenzuela of National AutoBody Research.

Visiting Western

M

In the first week of October, Lucky will be visiting shops in the Western region.

Visiting Boston/Southeast

Lucky will be visiting shops in the Boston/Southeast region during the second week of October and will be hosting a chapter meeting on October 9 at Bristol-Plymouth Regional Technical School (Taunton).

Visiting Boston/Northeast

M

Visiting Midstate Visiting Boston/Southeast

In the third week of October, Lucky will visit shops in the Boston/Northeast region.

During the fourth week of October, he will be visiting shops in the Midstate region and will host a chapter meeting on October 23. (Location TBD.) PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

From October 28 through November 1, he will be visiting shops in the Boston/ Southeast region.

12 September 2019

New England Automotive Report

MASSACHUSETTS

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

NEAR0919.qxp_NEAR1014 8/15/19 2:03 PM Page 13

state where the cost of living (COL) index is third highest in the nation.

I realize that I am stating wellknown statistics that may further the state of “learned helplessness” I have written about before. However, it is my sincere hope that there is still an underlying sense of anger and fight left in the majority of you who endeavor to provide safe and proper repairs for your customers and a livelihood for the very talented technicians you are fortunate enough to employ. I hope you will be angry enough to continue to pursue using the facts and statistics that are being acquired by National AutoBody Research (NABR) and its Variable Rate Survey. The information being gathered will substantiate what we all know in our minds to be the case, and it will be the foundation for showing how insufficient the labor reimbursement rate is in keeping pace with the growth of technological advancements in today’s vehicles and the equipment required to restore them to the same crashworthy condition as when they left the factory.

The EROSION that has been taking place only serves to put the motoring public in danger and jeopardy (not an over-dramatization) while lining the pockets of insurers under the guise of keeping premiums in check. At one time or another, we have all seen the devastation of a mudslide or what happens when a river has been undercutting a bank.

The earth is able to withstand the erosion for a period of time until it is so badly undercut that it collapses and is washed away. It happens slowly at first, but it speeds up over time. This is exactly where we find ourselves. The lack of ability for the majority of shops to keep up with technology, equipment and training is bringing on what will ultimately be a catastrophic end if this is allowed to continue.

For those of you who have kept pace with the labor crisis and the information AASP/MA has been providing, you know that Massachusetts is currently $3.40/hour behind the next lowest state, Georgia, which has a cost of living (COL) index a full 38 points below us (93 versus 131).

Additionally, we are $26.24/hour behind the state with the highest average rate of reimbursement, North Dakota, which has a COL index 34 points below Massachusetts (97 vs. 131). Some will say, “Well, those states are too far away to consider in the discussion.” I give you Connecticut, which has an average Labor Rate of $50.81/hour ($12.53/hour more than Massachusetts) and a COL index of 120, a full 11 points less than what we have here. How does any of this make sense? IT DOES NOT!!!! There is absolutely NO JUSTIFICATION for it.

The documentable facts speak for themselves. As a member of the collision industry here in Massachusetts, I implore you to not give up and abandon all that you have worked so hard to create and acquire. If you have not gone to nationalautobodyresearch.com and completed the survey, please do it now while it is fresh in your mind.

Your voice will be added collectively to hundreds of shops locally (and to thousands across the country) that are helping to document and substantiate what a fair and equitable Labor Rate should be. At the foundation of proper repairs and great customer care is a fair and equitable Labor Rate that allows for proper training, the purchase of new equipment to stay up to date with technological changes and a fair return on that investment. continued on page 46

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MASSACHUSETTS

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FIT AND FINISH IS NO PLACE TO GET CREATIVE. CONTACT US TODAY FOR A COMPETITIVE QUOTE ON YOUR NEXT COLLISION REPAIR ESTIMATE. BALD HILL DODGE CHRYSLER JEEP 1035 Bald Hill Rd Warwick, RI 02886 Order Hotline: (800) 822-3015 17 delivery trucks serving RI, MA and CT daily!

BEST CHRYSLER DODGE JEEP RAM 520 Colony Place Road Plymouth, MA 02360 Order Hotline: (800) 932-7900 Fax: (781) 749-7804 www.bestjeep.com IMPERIAL CHRYSLER DODGE JEEP 6 Uxbridge Road Mendon, MA 01756 Order Hotline: (877) 272-0332 Call us for your wholesale parts needs!

MCGOVERN CHRYSLER JEEP DODGE RAM 777 Washington Street Newton, MA 02460 Order Hotline: (800) 741-7563 www.clarkandwhiteautos.com For the best customer service ask for Mando Bogosian PREMIER CAPE COD 460 Yarmouth Road Hyannis, MA 02601 Order Hotline: (888) 927-8261 Fax: (508) 778-0900 www.premiercapecod.com QUIRK AUTO DEALERS 115 E. Howard Street Quincy, MA 02169 Order Hotline: (877) 707-8475

KELLY JEEP CHRYSLER 353 Broadway Route 1 North Lynnfield, MA 01940 Order Hotline: (800) 278-8558 Fax: (781) 581-2490 Email: kjcparts@kellyauto.com Over $1,000,000 in stock to support your business, and fast free delivery!

Check out MoparRepairConnection.com for resources, promotions and technical information. ©2019 FCA US LLC. All Rights Reserved. Chrysler, Dodge, Jeep, Ram, Mopar and SRT are registered trademarks of FCA US LLC.

New England Automotive Report September 2019 15

NEAR0919.qxp_NEAR1014 8/15/19 2:03 PM Page 16

[VENDOR AFFINITY PROGRAM] SPOTLIGHT By Alana Bonillo

One of the most recognizable names in the global automotive industry, BASF has been a leader in paint products for generations. The European-based company has been in existence for 150 years (long before the automobile was even invented) and continues to be a household name within the collision world.

Originally founded as a chemical company, BASF eventually got into the automotive coating segment, developing quality brands that are still used today. Glasurit reached its 130th anniversary last year, and 2019 marks the 100th anniversary of the R-M paint line.

BASF Refinish customer A-1 Toyota, winner of the 2018 Toyota Collision Center of the Year Award.

“BASF has always hung its hat on color match and strong product quality,” shares Peter Ervay, the company’s regional business manager of automotive refinish solutions. “We continue to strive to put out the highest color-match products and the most productive products that we can into the marketplace.

“This continues to be a core competency as a global paint supplier; however, BASF provides much more than world-class quality paint to our customers,” he adds. “Our total offer is aligned to three key categories under our Vision+ brand: Color innovation, educational expertise and expert analysis. These Vision+ solutions are perfectly blended to enhance collision center operations to improve efficiencies and skillsets and provide insights to make data-driven decisions 16 September 2019

New England Automotive Report

to maximize profits.”

With so many changes occurring in today’s industry, BASF also works to serve as a trusted solutions provider to its customer base.

“We focus on helping collision centers understand what is happening in the industry [and] what is happening in their own businesses and in their own markets,” explains Jeff Wildman, BASF’s manager of OEM and industry relations. “You see a lot of consolidation today; as [these larger entities] enter the market, how do independents become sustainable?

What do they do to support themselves? We work with all the shops to help them understand that and how to improve their business.”

With the complexities of today’s vehicles in mind, BASF helps collision repairers get access to the training needed and better understand the importance of OEM procedures (including pre-and post-repair scanning) and how to go about getting reimbursed for the work they do.

Earlier this year, the company launched its “e-learning platform,” which features a number of training courses. They are also working with others in the industry to create a central hub where shops can go to learn about the industry, how to manage their business and stay on top of what is happening. As BASF further develops this training platform, necessary hands-on components will be worked in as well.

“It’s key because everyone knows it’s tough to get out of the shop to attend training, but education is extremely important,” observes Wildman.

Knowing full well how critical continued learning is to OEMs, BASF’s close relationships with manufacturers around the world allows them to keep collision shops informed on how to marry the best coatings and refinish with the right technologies for these advanced automobiles.

As Wildman says, “We have more OEMs approving our paint for their vehicles than anyone else, and that goes back to our close connections. We work with all OEMs in North America and also globally, so we understand the big picture of what they are trying to

BASF Refinish customer Balise Collision Center was recognized as the winner of the 2018 Toyota Collision Center of the Year Award.

accomplish and what is important for collision shops to understand.”

Locally, BASF is a long-standing member of the New England market and is a proud supporter of AASP/MA as a Gold-level Vendor Affinity Program sponsor.

“In this business, you are only as good as your distribution; we are very fortunate to have strong distribution across New England,” comments Ervay. “[AASP/MA] is a great organization. The association is looking out for the industry on a holistic level.

They are able to bring all of these individual viewpoints, focus them and get a collective effort moving in one direction to solve some of the industry problems. Their Labor Rate study is a perfect example of that. Without them taking the lead on something like this, everybody would still be in the same situation one, two or three years from now. Hopefully, this initiative will really impact everyone in the industry and increase profitability across the chain for repairers, vendors and all folks involved in repairs.”

As the industry continues to evolve and vehicles get more advanced with technology, BASF remains forwardthinking and mindful of the fact that there is much more to its business these days than color matching and painting vehicles. As it works to develop new products, it also plans to roll out an “OEM toolbox” designed to help shops embrace their markets, learn about OEM certification programs and figure out what may or may not work for their particular situation.

As Ervay says, “It’s about seeing the bigger picture.”

PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

NEAR0919.qxp_NEAR1014 8/15/19 2:03 PM Page 17

NEAR0919.qxp_NEAR1014 8/15/19 2:03 PM Page 18

THEY’RE CALLED “ORIGINAL BMW PARTS” FOR GOOD REASON. FOR UNCOMPROMISING PRECISION AND INCOMPARABLE QUALITY, YOUR BMW CENTER IS YOUR ONE-STOP SHOP FOR EVERYTHING BMW. For Original BMW Parts, contact one of these authorized BMW centers: BMW of West Springfield 1712 Riverdale St. West Springfield, MA 01089 PH: 413-746-1722 FAX: 413-304-9009 bmwwestspringfield.com

BMW of Stratham 71 Portsmouth Avenue Stratham, NH 03885 PH: 603-772-0000 FAX: 603-772-9436 bmwofstratham.com

Tulley BMW of Nashua 147 Daniel Webster Hwy Nashua NH 03060 PH: 603-888-5050 FAX: 603-888-8427 tulleybmw.com

New Country BMW 1 Weston Park Ave. Hartford, CT 06120 PH: 860-240-7881 FAX: 860-240-7873 newcountrybmw.com

BMW of Warwick 1515 Bald Hill Rd. Warwick, RI 02886 PH: 401-821-1510 FAX: 401-823-0530 bmwofwarwick.com

BMW of Sudbury Wholesale Parts 68 Old County Road Sudbury, MA 01776 PH: 800-338-3198 FAX: 508-881-7578 bmwofsudbury.com

18 September 2019

New England Automotive Report

NEAR0919.qxp_NEAR1014 8/15/19 2:03 PM Page 19

LET US TURN THEM AROUND! CONTACT

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

FOR SALE Rear Bumper Cover 2017 E300 AMG $2,140 list price

Good condition.

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NEAR0919.qxp_NEAR1014 8/15/19 2:03 PM Page 20

Genuine Replacement Parts For the Road Ahead.

Avoid problems down the road that will cost you time, money and customers. Choose Genuine Subaru Replacement Parts, engineered to fit better today, and perform better tomorrow.

For Genuine Subaru Body Parts, contact the following Authorized Subaru Dealers: Long Subaru 7 Sutton Rd. Webster, MA 01570 800-982-2298 Fax: 508-879-1212 tschube@longauto.com

20 September 2019

New England Automotive Report

Quirk Auto Dealers 115 E. Howard St. Quincy, MA 02169 Toll Free: 877-707-8475

NEAR0919.qxp_NEAR1014 8/15/19 2:03 PM Page 21

Mattie Volkswagen 80 William S. Canning Blvd.

Fall River, MA 02771 800-678-0914 fax: 508-730-1283

Lia Volkswagen 140 Elm Street Enfield, CT 06083 860-698-6890 fax: 860-265-7840 www.liavw.com

Volkswagen of Hartford 133 Leibert Road Hartford, CT 06120 Direct Parts: 860-543-6012 fax: 860-728-4408 email: ebautista@vwofhartford.com

Mastria Volkwagen 1619 New State Highway Raynham, MA 02767 Toll Free: 888-581-1146 Direct Parts: 508-802-9955 fax: 508-802-9966 email: vwparts@mastria.com www.mastriavw.com

Quirk Auto Dealers 115 E. Howard St. Quincy, MA 02169 Toll Free: 877-707-8475

New England Automotive Report September 2019 21

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[LOCAL] NEWS By Alana Bonillo

HATE THE RATE? Don’t Miss AASP/MA’s Educational Labor Rate Event Collision repairers all across Massachusetts should mark their calendars for September 28 to attend the most important educational industry event of the season: AASP/MA’s fall meeting, which will be centered around National AutoBody Research’s (NABR) Variable Rate System (VRS). The event will take place from 8am to 1pm at Supercharged Entertainment in Wrentham.

Since May, the association has been working closely with NABR, a third-party independent research team, to conduct the first-ever Massachusetts Labor Rate Survey.

The effort aims to document the inadequacy of the current $38.28 hourly Labor Rate – the lowest in the nation (based on a 2018 Mitchell study).

During this special meeting, NABR founders Sam and Richard Valenzuela will share the information they have gathered to date through the survey, how shops can utilize real repair data to improve their businesses and their overall bottom lines.

Attendees will be introduced to the components of the VRS by way of a live demonstration that will show them real data and how it’s generated through the Labor Rate Survey and BillableGenie, an online searchable database that is available to all shops for a fee. The database collects actual insurance estimates from repairers all over the country and shows what these companies are actually paying for procedures.

“The VRS is a real innovative and proven system that measures and reports real market-based Labor Rates. We do it better than anyone in the industry – comprehensively and systematically,” shares Sam Valenzuela. “It results in greater pricing transparency, and we think it enables better, more-informed business decisions for body shops on how they price their labor.

[By] having data they did not have previously, they are more informed about what is going on across the whole industry, their region or other similar parts of the country. It really transforms their thinking and how they price their labor.

“This is all data-driven, fact-based and objective

[information],” he adds. “We think shops have been at a disadvantage to data in the past. This is helping to equalize that. Now, they can have real data to make decisions and negotiations with, which is something they never had before.”

The best way for AASP/MA members to prepare for the meeting is to take the Massachusetts Labor Rate Survey (laborratesurvey.com) if they have not already done so. Shops throughout Massachusetts have been extremely responsive to the survey, possibly more so than in any other state NABR has worked with.

“Hats off to Massachusetts [shops], as they have responded well and there’s a lot of momentum they can build on. I think they will be pleasantly surprised with what some of the data looks like.”

At press time, the association was very close to completing its Phase 1 goal with less than 59 surveys needed to reach a total of 315. Once reached, this number will allow for a statistically bulletproof figure for Massachusetts to set a critical foundation for proceeding with Phase 2, which will be focused on raising awareness of the inadequate rate repairers are currently being reimbursed at in Massachusetts.

During this special meeting, NABR founders Sam and Richard Valenzuela will share the information they have gathered to date through the survey, what the next steps are and how shops can utilize real repair data to improve their businesses and their overall bottom lines. “[This inadequate rate] does not allow for an incentive to properly train and equip collision repair facilities in order to keep pace with the changing technology in the collision repair process,” explains AASP/MA Executive Director Evangelos “Lucky” Papageorg. “As in any retail business, the goal is to satisfy one’s customers and provide the best possible service. This ability has been greatly hampered here in Massachusetts by being reimbursed at the lowest rate in the nation.”

This meeting is expected to be a valuable educational experience for all shop owners, as the presentation will also expose them to new ways of thinking. What has been done for the past 10, 20 or 30 years has not helped to solve the problem. Change comes from doing things differently, and the VRS will show the Massachusetts collision repair community how to do just that.

“Take the survey, and then come in with an open mind and be prepared to have some long-held beliefs challenged. [Attendees] will have success if they are open-minded,” says Valenzuela.

See the facing page for information on how to register for this event.

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MASSACHUSETTS

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PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

Have you taken the Labor Rate survey?

Are you wondering about next steps and how to utilize the survey?

Are you looking for a tool that can change your business immediately?

Then register TODAY for this special event!

ANNUAL FALL MEETING Saturday, September 28

MASSACHUSETTS

Supercharged Entertainment 591 Washington Street, Wrentham, MA 02093 8am to 1pm

AASP/MA is proud to present Sam and Richard Valenzuela of National Auto Body Research for: - An update on Massachusetts' first-ever Labor Rate Survey - An in-person deep dive into Phase 2 of the Survey, and next steps - A look at Billable Genie & more!

Breakfast and lunch are included. Go-kart racing is optional after lunch for an additional fee.

More information will be sent to registered attendees as the event gets closer.

MAKE A DAY OF IT! Come for the meeting and go-karting - stay for the shopping, casino and local activities.

THIS EVENT WILL SELL OUT FAST RESERVE YOUR SPOT TODAY!

COST: $100 FOR MEMBERS; $150 FOR NON-MEMBERS

Attendee Name(s):______________________________________________________________ Company Name: _______________________________________________________________ Telephone: ______________________Email:_________________________________________

Credit Card

PAYMENT INFORMATION

Check (Make checks payable to AASP/MA; remit to address below)

CC#:________________________________________________________ EXP: _____ / ____ SECURITY CODE: _____ (3-digit code on back of Visa/MC/Disc; 4-digit code on front of AMEX) BILLING ADDRESS: ______________________________________________________________ NAME ON CARD: ________________________________________________________________ SIGNATURE: ____________________________________________________________________ Please return completed form via email to admin@aaspma.org, via fax to 973-235-1963 mail to AASP/MA, P.O. Box 212, Marlborough, MA 01752 or register online at aaspma.org.

Please call the AASP/MA Administrative Office at 617-574-0741 with any questions

NEAR0919.qxp_NEAR1014 8/15/19 2:03 PM Page 24

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www.volvogroup.com 24 September 2019

New England Automotive Report

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New England Automotive Report September 2019 25

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[LOCAL] NEWS By Alana Bonillo

Lynn Vocational Technical Institute Recognized by SkillsUSA Congratulations to the students of Lynn Vocational Technical Institute, which was named one of the top three winners of the SkillsUSA 2019 Models of Excellence program. The program measures success by how well students apply essential workplace-readiness skills, including personal responsibility, integrity, teamwork, work ethic and organization.

The students were recognized for technical skills grounded in academics while promoting literacy by writing and producing a children’s book entitled Tech Goes to Tiger Town. The trade-career focused story centers on the school mascot, who ventures out of the jungle to a

local vocational school to learn about career options.

“Every year, the SkillsUSA chapter at Lynn Tech does phenomenal work. [The students] always seem to outdo themselves,” says AASP/MA member Rick Starbard (Rick’s Auto Collision; Revere), who is closely affiliated with the school as a former collision repair instructor, current Advisory Board member and treasurer of the alumni association. Additionally, he is also a current member of the Auto Damage Appraiser Licensing Board (ADALB).

Starbard taught at the school for 14 years before he was elected to serve as a City Councilor and remains active with both the school and the Massachusetts’ collision repair community. His collision shop will soon help launch the career of one of the SkillsUSA Model of Excellence program students, Erick Hernandez, who will come on board this fall as part of the school’s co-op program.

In addition to the recognition the students received at the SkillsUSA National Leadership and Skills Conference in Louisville, KY this past June, they were recognized locally during Lynn’s Seventh Annual Literacy Day last month.

“As an alumnus of the school and as a city councilor, I am really proud of the work these students do,” notes Starbard.

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New England Automotive Report

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New England Automotive Report September 2019 27

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[NATIONAL] NEWS

cPrax Internet Marketing Joins CIC Workforce Effort Anyone running a collision repair facility in 2019 is fully aware of the increasing difficulties surrounding employee recruitment and retention. Now, a new industry entity is working to address this critical issue – with help from one of AASP/MA’s most active supporters and sponsors.

Earlier this year, the need for better lines of communication between the industry and potential employees led to the creation of the Collision Industry Conference (CIC) Talent Pool Committee (TPC). Chaired

by David Luehr (Elite Body Shop Solutions), the TPC already boasts 52 volunteer industry members and is in the process of forming various task forces to address specific areas of need. Among the TPC’s ultimate goals will be to develop more collaborative efforts within the industry and incorporate the rise of technology into methods of attracting new employees.

Bill Enross, founder of AASP/MA Vendor Affinity Program participant cPrax Internet Marketing, has signed on to assist the endeavor by creating a special customer relationship management (CRM) system to make communication between TPC members easier. The system, which compiles the email addresses of volunteer TPC members, is currently being utilized to survey these participants on their special areas of expertise. The goal is to use this information to develop the TPC’s internal task forces.

Enross sees his volunteer activities with the TPC as a way to help his shop clients solve the workforce crisis.

“It’s the number-one question I get from my clients who own body shops. They are struggling with finding good help. I can’t tell you how many times I get a phone call or an email asking, ‘Do you have any idea where I can get ahold of some new talent?’ Other [industry issues] with pre-and post-repair scanning, physical inspections and who pays for what are concerning, but I think

As a CIC participant, Enross regularly travels to the group’s quarterly meetings throughout the country and receives tremendous value from connecting with industry members at a national level. [shops] will be able to better deal with those if they knew they had good help in the pipeline.”

As a CIC participant, he regularly travels to the group’s quarterly meetings throughout the country and receives tremendous value from connecting with industry members at a national level.

“My hope is that I can learn more about the industry and know more about the things that are causes for concern and confusion in the digital marketing realm.

It’s important to know what’s on the horizon and what is coming. I find that even though the likelihood of any sort of digital marketing being discussed at CIC is probably pretty low-priority with everything else they have to take care of, my ability to have intelligent conversations with body shop owners when they approach me – coupled with my experience of having been a shop owner myself for over 25 years – gives me credibility that I think would be difficult to come by otherwise.”

CIC is a forum comprised of participants from all industry segments for the expressed purpose of discussing and exploring the issues that occur among them. Through discussion and research during meetings and extensive interim committee work, CIC attempts to form consensus on various issues. All such findings are nonbinding and voluntarily accepted.

More information on the CIC Talent Pool Committee is available at ciclink.com/talent-pool-committee. For more information on cPrax Internet Marketing, Enross can be contacted at bill@cprax.com.

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[NATIONAL] NEWS

SCRS Addresses Importance of Vehicle Safety Inspections At its recent Open Board Meeting in Indianapolis, the Society of Collision Repair Specialists (SCRS) offered a special presentation on manufacturers’ vehicle safety inspections, inspired by what Executive Director Aaron Schulenburg called “the failure of some other parties to recognize how important a safety inspection is and how robust of an operation it really is.”

A repair-related safety inspection is a separate procedure performed in addition to pre- and post-repair scanning and calibration requirements, and will be specified in the OEM repair procedures if necessary.

Using Subaru as an example, SCRS Education Committee members Ron Reichen (owner of the Oregon-based multi-shop business Precision Body & Paint) and Bruce Halcro (Capital Collision Center; Helena, MT) showcased the complex nature of OEM-recommended/required inspections. For frontal collisions, Subaru has developed two different inspection procedures based on whether an airbag deployed or not. Different inspection procedures are also needed for side and rear hits.

SCRS Education Committee member Ron Reichen

“If you’re not accessing and analyzing those repair procedures, you’re not even aware that there’s a safety inspection required,” Reichen said.

In terms of finding the most current OEM repair information on safety inspections, Reichen cautioned that dealers might not always be the best sources due to the traditionally high turnover rate for service advisors and the lack of knowledge of collision repair specific procedures and cohesion that could take place as a result.

“Six months from now, [those advisors] might be with another brand…Take the initiative; don’t wait for anybody. Frequent that dealership and make sure that when you see a new advisor, [you] find out where they came from.”

“A lot of the dealers don’t have body shops,” added Halcro. “They don’t get into the collision repair specs, so they don’t really know…I think the first point of contact would be to get ahold of your dealer and get them educated so that they give the correct answers, because they’re going to get called.”

Not surprisingly, a considerable amount of time must be devoted on the shop floor to perform inspections of this nature. In the case of Subaru, Halcro noted that the process typically ranged from 15 to 20 hours when he sublets this work to a dealer. Reichen added that it is not uncommon for the process to include a checklist of 70plus items that need to be reviewed. This is in addition to the high amount of photography and documentation that needs to take place.

“That reflects a certain amount of labor time, but it’s critical. We need to have that documented,” he said.

SCRS Open Board Meeting attendee and VECO Experts CEO Mark Olson noted that some current vehicle models require the deployment and replacement of an airbag just to perform an adequate safety inspection.

“We’re saying [performing a safety inspection] is the new thing and the new game, but it’s not. It’s actually been around quite a while.”

“The new part of this game is the fact that there’s been some litigation that has resulted from systems potentially not performing the way they would have prior to a repair,” added SCRS Treasurer Tim Ronak (AkzoNobel).

Ultimately, it is the increasing responsibility of the collision repair community to research the manufacturer-recommended/required procedures on every vehicle to determine the proper methods to perform safety inspections for that particular make and model.

As Reichen said, “This isn’t a one-size-fits-all.”

More information on the Society of Collision Repair Specialists is available at scrs.com.

PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

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New England Automotive Report September 2019 33

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[COVER] STORY By Joel Gausten

For several months, New England Automotive Report has followed various inter-industry efforts to come to a consensus on the use and definition of “Opt-OE” collision replacement parts. As these discussions continue nationwide, it is clear that the confusion surrounding these parts is widening.

In last month’s issue, we noted that Toyota – in an official web article entitled “Don’t Opt for Opt-OE Parts” (toyotapartsandservice.com/collision/dont-opt-foropt-oe-parts) – cautioned that “Opt-OE” parts are “not Genuine Toyota Parts that have been designed to be distributed in the North American market.” Recently, we received feedback from readers indicating that parts marked as “Opt-OE” were available at certain Toyota dealerships in Massachusetts. At a recent Collision Industry Conference (CIC) in Indianapolis, we asked CIC panelist Eric Mendoza, manager of Toyota’s North American collision operations department, for clarification on the matter. Although he didn’t wish to directly define “Opt-OE” at CIC out of respect for the ongoing discussions on the matter taking place at the forum, he noted that “the question is coming from that ‘Opt-OE’ category and what’s getting dumped in that bucket more so than how the part was distributed and if it’s [through] authorized distribution.” He also confirmed that the terminology could find its way into legitimate North American wholesale parts operations.

“Our dealers are always encouraged to put parts in the ‘Opt-OE’ category because ‘Opt-OE’ is more appetizing to some of the people who are paying the bills for them. So, that muddies the water of what’s getting put into ‘Opt-OE’ and if it’s genuine.”

While Mendoza acknowledged the ambiguity that exists even in above-ground parts sales channels, he was 34 September 2019

New England Automotive Report

clear in his opposition to any Toyota parts sold outside of the manufacturer’s authorized supply chain. Currently, North American Toyota dealerships are served by only three authorized suppliers: Toyota Motor North America, Gulf States Toyota and Southeast Toyota Distributors.

“The Toyota dealers are your only opportunity to buy an authorized Toyota part from the Toyota Motor Corporation,” he said, adding that anyone utilizing parts sold outside of these sources is asking for trouble.

“If Toyota parts are coming from a different Toyota distributor, it is unauthorized distribution of those parts… It is unauthorized, and we don’t know what it is anymore. It may be a counterfeit part; it may be funding terrorism, frankly.”

He also noted that not all products sold by authorized Toyota dealers to the industry are indeed OEM, particularly when it comes to wheels, wiper blades and other accessories.

“We don’t hold [Toyota dealers] to an agreement that requires them to [not sell] aftermarket parts.”

Of course, cloudiness over part categories and definitions extends far beyond “OE” versus “Opt-OE” and “OEM” versus “aftermarket.” During a presentation by the CIC Parts and Materials Committee, Mendoza joined David Williams, director of the automotive original equipment service parts division at DENSO Products & Services Americas, to discuss some of the other parts classifications that might surface on the shop floor. Known primarily as a manufacturer of mechanical products, DENSO’s work as a Tier 1 parts supplier for the collision industry includes (among other things) manufacturing condensers and radiators for Toyota.

In addition to providing traditional OEM products, the company also produces what it calls OES (original

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equipment supplier) and “OES second-line” parts for the automaker. An OES part is a service part made to a different standard than the original equipment part, while “second line” is that part’s value-line version.

“The second line is usually built to meet some type of price point or fulfillment that’s different from what’s originally there, but it is still backed by the manufacturer with their brand on it,” Williams explained.

Mendoza stressed that these “second-line” Toyota parts are being made available to the auto body industry with the automaker’s authorization and approval.

“Toyota engineers [at Toyota Motor Corporation] always sign off on the quality standard. While it may be different than the original product line, it’s always a Toyota-backed [engineering] standard that is intended to maintain our brand image.”

Like Mendoza, Williams was quick to stress the importance of keeping track of where a part – especially one created by DENSO for Toyota – is purchased. This is especially critical when factoring in any warranties and potential liabilities associated with a given product.

“It’s all based upon the channel of which the part is distributed. If it’s distributed through a Toyota dealer, it’s going to be backed by Toyota. If you buy it from WORLDPAC and it’s a DENSO-branded part, it’s going to be backed by DENSO.”

Interestingly, the CIC presentation also shed some light on the possible differences between strict OEM parts and their competitive aftermarket variants. In addition to its contractual relationship with Toyota, DENSO provides products for the non-OEM side.

Williams explained that although his company develops OEM products based on specific manufacturing requirements for form, fit and function, an aftermarket part it distributes through its retail channels doesn’t meet that same criteria.

“We determine the form, fit and function; we determine the quality requirements of manufacturing output and determine how that manufacturing output’s going to be held over time. There is no secondary approval. If there’s a change that’s made in an aftermarket part, it’s up to us to police ourselves.”

With growing litigation and other factors shining a brighter-than-ever light on the procedures and parts used during the repair process, shops must be diligent in determining the safest and most appropriate products to install in vehicles. AASP/MA members are urged to always confirm that the parts they purchase come from authorized sources, are intended for use in North America and carry warranties by the right parties.

PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

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New England Automotive Report September 2019 35

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36 September 2019

New England Automotive Report

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Get it right from the source.

Ford and Lincoln Mercury dealers are the one-stop source for all of your collision repair needs.

When you need fascias, grilles, headlamps, wheels or any other Ford Motor Company Genuine Part, call your local wholesaling dealership. They’re a great souce for technical and repair information as well. Using Genuine Parts can help your body shop reduce cycle time, improve relationships with insurance companies and satisfy customers. So get everything you need in just one call to your one-stop collision repair resource – your local Ford or Lincoln Mercury Dealership.

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

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© 2019, Ford Motor Company New England Automotive Report September 2019 37

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

GETTING NICKELED AND DIMED ON TOTAL LOSS SETTLEMENTS In the April issue of New England Automotive Report, multiple articles reported on an investigation being conducted by the Massachusetts Division of Insurance into alleged faulty lowball actual cash value reports being issued by CCC Information Services. The reports are used by various insurers to determine auto damage total loss settlements. The insurers almost certainly should know that CCC’s valuations are inaccurate, but they are reaping substantial financial benefits from them. So, at least up until now, they never questioned the valuations. It recently has come to my attention that some insurers also may be engaging in various other questionable tactics in order to nickel and dime their insureds on total loss claims. For each insured, the loss may be relatively small. But each insured’s nickels and dimes may end up in their insurer’s pockets, and all of that loose change adds up to megabucks for the carrier.

For collision repairers, it may not seem to make much of a difference that this is happening. After all, the money is not coming off repair costs. Yet, reducing total loss values may also reduce the number of vehicles available for repair. Many times, the money is coming out of settlements being paid to the repairers’ loyal customers. The sense of unfairness that the repairers feel may be maddening – particularly since they already see how they often have to battle with insurers to get what is needed to properly compensate them for their work.

There were two particular issues that came to my attention. One was from an automotive legal blog that shows up in my email every morning; the other was from a collision repair shop owner I’ve known for many years.

The GEICO Class Action Case Recently, the morning legal blog referenced a class-action lawsuit in federal court in Florida that has been going on for quite some time. When settling total losses for leased vehicles in Florida, it seems that GEICO has not been paying their first-party insured lessees for sales tax and titling fees as part of their settlements. Apparently, GEICO has been claiming that, since the vehicles are leased, the lessee is not entitled to get paid what the sales tax would be on a replacement vehicle or the related retitling fees.

The lead plaintiff in the case argued otherwise. After all, she had the same GEICO private passenger auto insurance policy as everyone else in Florida and paid the same premium that car owners pay. Owners get paid for sales tax and titling fees as part of their total loss settlements. Why shouldn’t she?

The case eventually was submitted to the Judge on cross Motions for Summary Judgment. That means that both sides claimed that there were no material facts in dispute; rather, they both alleged that the Judge should find for them based on their particular interpretation of the law. Since there was no factual dispute, there would be no need for a trial. The Judge (or his law clerk) would just have to do the legal research and apply the law as he saw it to the agreed-upon facts.

The Judge did just that and found that the plaintiff should win and that GEICO owed her the sales tax and titling fees for a replacement vehicle. Further, the Judge agreed that every other member of the class – all GEICO Florida lessees who had a firstparty total settlement with GEICO between 2011 and 2016 should be entitled to be paid those amounts as well.

In particular, the Judge found that the language in GEICO’s insurance policy that defined “actual cash value” as “the replacement cost of the auto” was ambiguous as to what GEICO continued on page 40

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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: Copeland Toyota 970 West Chestnut Street Brockton, MA 02301 Toll Free: 800-856-1172 Fax: 508-559-9264 wholesaleparts@copelandtoyota.com www.copelandtoyota.com/wholesaleparts

IRA Toyota of Manchester 33 Auto Center Road Manchester, NH 03103 Toll Free: 800-828-6076 Direct: 603-657-2410 Fax: 603-657-2419

IRA Toyota Danvers 161 Andover Street Danvers, MA 01923 PH: 800-774-8411 ext.1 Direct: 978-739-8306 FAX: 978-739-8098

Bernardi Toyota 1626 Worcester Road Framingham, MA 01702 Parts Direct: 800-248-3033 FAX: 508-879-7895 www.bernarditoyota.com

www.iramotorgroup.com

Wellesley Toyota 216 Worcester Street Wellesley, MA 02481 PH: 800-734-0006 Direct: 781-237-4042 FAX: 781-237-3481 parts@wellesleytoyota.com www.wellesleytoyota.com

stirrell@iramotorgroup.com www.iramotorgroup.com

ToyotaPartsAndService.com New England Automotive Report September 2019 39

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[LEGAL] PERSPECTIVE continued from page 38 was required to pay on total losses to lessees. Then, applying a well-recognized legal principle that says that ambiguities in contracts are to be construed against the party that drew the contract, the Judge found that GEICO has to pay. GEICO had written the insurance policy, and it should have the ambiguities that it created be interpreted against it and in favor of their insureds.

Under the Court’s Judgment, GEICO must pay the lead plaintiff only the six-percent sales tax on a replacement for her 2015 Audi A3 plus $75.25 in titling fees. But since this is a class action, GEICO also owes total damages in the amount of $6,535,687.47 to all members of the class. The lawyers for the plaintiffs also calculated that GEICO will end up paying an additional amount of more than $11 million over the next five years in future total loss settlements being paid to lessees. In addition, the class-action attorneys are now asking the Judge to order GEICO to pay them an additional amount in excess of $8 million in legal fees and costs; the Judge has not yet ruled on that request.

GEICO’s failure to pay a few hundred dollars on one loss may now be costing them tens of millions of dollars in Florida and maybe hundreds of millions of dollars countrywide.

Further, this is just in Florida! Depending on what GEICO’s insurance policies say in other states and what GEICO settlement practices are in those states, it is possible that other class- action suits may be brought elsewhere. GEICO’s failure to pay a few hundred dollars on one loss may now be costing them tens of millions of dollars in Florida and maybe hundreds of millions of dollars countrywide.

I don’t know what GEICO’s practices are in Massachusetts with regard to total loss settlements with lessees, but the current standard Massachusetts auto insurance policy requires an insurer to pay an insured the actual cash value (ACV) of a vehicle on a total loss. It also specifically requires the insurer to pay “all sales taxes applicable to the loss of an auto.” Like the Florida auto policy, it appears to me that the Massachusetts policy is also ambiguous as to whether an insurer must pay titling fees and other transfer costs (perhaps including dealer document prep fees). In the policy, one of the factors that must be considered in determining ACV is “the actual cost of purchase of an available auto of like kind and quality but for the damage sustained.”

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New England Automotive Report

Would that “cost of purchase” include titling fees and other transfer costs for lessee total losses? I’m not sure.

But if I were an insurer and not paying those costs, then I would be worried.

Understandably, GEICO has been fighting this matter tooth and nail at every step – which is a major reason why the class attorneys’ fee request is so high – and the insurer has now appealed the Judge’s decision. It is possible that the case could be overturned on appeal; at the very least, it still may be several years before the Judgment becomes final and enforceable. It certainly will be interesting to see what happens.

The “Projected Sold Adjustment” A shop owner I have known for many years emailed me a copy of an offer that a customer of his had received from an insurer on a total loss on a low-mileage 2013 Subaru Forester. The offer seemed quite low, and the shop owner noted that it was well below the NADA value for the vehicle.

Along with the offer, the insurer included a written value analysis based on other similar vehicles listed for sale by dealers in the area. In making its analysis, the insurer did add on value for low mileage, but it also decreased value significantly for something it called a “projected sold adjustment,” which it applied to the vehicles that were listed for sale. The shop’s customer had called his insurer to inquire what that was. He was told that the insurer took the adjustment because car purchasers usually negotiated down from a dealer’s asking price and that the ACV should be based on that negotiated final figure – not the asking price. However, it also turned out that the insurer’s adjuster did not have a good answer as to how the company came up with the amounts of its projected sold adjustments – which were all around $700.

The customer had the good sense to ask the shop owner about the offer and received some good advice in return, including that the NADA value for the car was much greater than the offer and that the shop owner did not know of any basis for the projected sold adjustments. In fact, the shop owner noted that many dealers today use “no-haggle” pricing for used cars, from which there is no negotiating. The shop owner also gave his opinion that the insurer may have been engaging in unfair claims settlement practices by making its low-ball offer and suggested that the customer take whatever actions that he thought continued on page 42

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Audi dealers strive to make you an Audi Genuine Parts fan •

Audi Parts professionals are your subject matter experts on collision parts, replacement components and mechanical items.

•

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Installing Audi Genuine Parts contributes toward improved cycle time that helps make both your customer and their insurance company happier.

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Helping you do business is our business. Order Audi Genuine Parts from these select dealers.

Audi Natick 549 Worcester Street Natick, MA 01760 www.bernardiaudi.com 800.247.3033 Fax: 508.651.6841

Hoffman Audi 700 Connecticut Blvd East Hartford, CT 06108 860.282.0191 Fax: 860.290.6355 www.hoffmanauto.com

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

Mattie Audi 80 William S. Canning Blvd.

Fall River, MA 02721 800.678.0914 Fax: 508.730.1283 www.mattieaudi.com

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[LEGAL] PERSPECTIVE continued from page 40 appropriate to try to get more money. After all, under Massachusetts law, insurers can be held responsible for up to three times the actual damages plus attorneys’ fees for engaging in unfair claims settlement practices.

Armed with the new information and still getting little relief from the insurer, the customer called the Division of Insurance and actually got to speak with someone who listened to him and contacted the insurer.

Notably, the Division of Insurance has power to take its own action against an insurer that engages in unfair claims settlement practices. Apparently, the insurance adjuster knew this, since the insurer ended up paying the customer about $2,000 more than their original offer.

So, that’s at least one win for the good guys – and at least one claimant who was able to keep his nickels and dimes in his own pocket.

The claimants in these matters are usually just ordinary people who may be unfamiliar with true motor vehicle values, the law and how to negotiate with insurers. It would usually cost too much money to hire a lawyer to try to help on a total loss claim, and many insureds wouldn’t think to ask their collision repair shop whether an offer is reasonable. But insurers do not always get away with unfairly low-balling total loss settlements, and sometimes it ends up costing them more nickels and dimes than they are trying to save. Be aware of issues regarding total loss settlements – and make sure that you educate your customers about those issues as well.

PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

Conclusion Insurers can save huge amounts of money if they are able to pay just a little bit less on thousands of claims.

Total loss settlements seem to be where insurers may try to get away with taking liberties – and apparently, they do.

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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Call us and get the right MOPAR parts the FIRST TIME! 42 September 2019

New England Automotive Report

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GENUINE NISSAN PARTS

MAKE ALL THE DIFFERENCE.

Only Genuine Nissan Parts deliver the fit, reliability, and performance to meet your shop’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

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

Web: www.mastria.com

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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

New England Automotive Report

Quirk Auto Dealers 115 E. Howard St. Quincy, MA 02169 Toll Free: 877-707-8475

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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 can’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 13 Please DO NOT allow yourself to be forced to the edge of the undercut riverbank waiting for a collapse that will wash you away.

Join AASP/MA as we ALL work together to shore up OUR industry and restore the respect it deserves in the form of a fair Labor Rate! Join AASP/MA as a member to stand strong with your colleagues. SEE PAGE 6 for an application.

PROTECTING CONSUMERS AND THE COLLISION INDUSTRY

MASSACHUSETTS

Want to learn more about National AutoBody Research’s work? See page 23 and join us!

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

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