Auto Body Repair and the Economy

Let’s face it, fuel prices are high, food costs are high, your neighbor is loosing their home. Times are not the best. What could be worse? Maybe an auto accident?

Your car has sustained $1500.00 in damage; your insurance company pays you less a deductible. You schedule your vehicle to be repaired at your neighborhood auto body shop. Two days before you take in your vehicle, you get a nasty credit card bill. You start to ponder, what if I took the money from my auto claim and paid off my credit card? I could live with a distorted fender and hood, there does not seem to be any sort of safety issues. When I get back ahead financially, I will get my car repaired. The problem is, most people from this point will never repair that vehicle.

The auto owner has certain obligations to their secured interest with a settlement check. An auto owner is obliged to repair their vehicle if that vehicle is leased, if they neglect to repair, they will be charged when the vehicle is turned in. If the auto has a loan, the vehicle repairs can be neglected, but if the vehicle was repossessed, the auto owner would be charged for the damages. That is the secured interest would try to collect, if the vehicle is repossessed seems like it is a lost cause. If the auto is 100% owned, than it does not matter what the owner does with the insurance payout.

There is a significant industry impact due to customers declining repairs. The local auto body shop now looses that work. That repair employs numerous people in the shop, numerous parts and supplies vendors, and keeps the industry on its toes with new technology and innovations. The only way for a shop to keep absorbing blows like this from cash strapped consumers, is to take drastic cuts in what is owed to them, cut their estimate, or even eat the customer’s deductible, which is not even legal in some states. Why would a shop need to work to just keep the lights on, might be better to just close the doors. The insurance company pays the retail estimate, they by no means encourage the customer to cut deals with the shop, there objective is to put the customer back in there prior position. The repair decision ultimately lies on the finicky auto owner.

Auto body repair at your service. Auto body shops need to reinvent their desire. Some auto owners still think of a shop as a dusty, backyard garage. When in fact, a lot of these shops are million dollar state of the art facilities, utilizing highly trained technicians. I have seen numerous shops with very nice front offices and waiting rooms. These are not dealerships, but independent shops. I think the best way to handle this every changing economy effect on the auto body repair industry is to bond with the customer. The customer is always right, I know sometimes this is hard to stomach, but unfortunately one happy customer might tell one our two potential or current customers, and an unhappy customer will tell twenty people.  

A shop might want to utilize some reasonable concessions. Back to our example, the auto owner’s vehicle is inspected by the insurance company and is paid less the deductible. The auto owner takes vehicle to shop and schedules repairs. The shop at that time could work out some concessions with the owner, such as usage of alternative parts, does this 2 year old vehicle really need a $400.00 oem (original equipment manufacturer) headlamp assembly, or would I be ok, with a $180.00 used (like kind quality) assembly. (Disclaimer: all states have slightly different insurance laws, pertaining to insured’s and claimants, this is just an example) Would I be ok with the usage of a remanufactured bumper cover, used bumper cover, or aftermarket? It would save some money and my vehicle would be repaired and accepted by my leasee. These are all acceptable practices. You as a shop owner or technician, need to make the auto owner understand how important it is to get there car repaired. There could also be numerous safety concerns. The shop needs to explain to the auto owner about hidden damage, and the decline in value of their vehicle.

In this every changing industry, it seems that there are hurdles that constantly need to be jumped. A vehicle is the average American’s second highest valued asset; it always amazes me that people do not want to keep their vehicle in top condition. I think that a few tweaks with customer service and salesmanship, you should be able to get repairs lined up in this tough time.

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