Market survey and prevailing rate

These two terms are mutually inclusive - like "free love" and "babies" - in that one leads to the other. Though mysteriously formulated so-called "market surveys" mystically produce so-called "prevailing rates" that all shops in a given area are to believe they can not exceed, the idea that products and services should cost the same from one shop to another could only assume that all such products and services are identical, that all shops have identical tools in number and brand, that all employees are equally motivated, equally paid, and otherwise compensated equally, and the like.

The reality of business, though, is that your business is your own and your profits are based on your costs, not the assumed costs of shops that haven't a clue about how to figure their own costs of doing business profitability, or those supposedly calculated by a third party entity with a vested interest in keeping you barefoot and pregnant, and subservient to their whims.

So why under any circumstances would you ever even consider allowing an outside entity, that is totally disinterested in anything but maintaining their own profitability through randomly reducing yours, to determine the so-called "prevailing rate" that they expect you to comply with, especially when this rate is determined by the rate at which they were able to bully other shops in your area into compliance?

Says one within the collision industry, "They conduct a so-called 'survey' to find the lowest rate, which then becomes the prevailing rate. It's among the most sickening scams that bilk the collision industry. I did a 'market survey' of all the grocery stores in my area and found milk for as little as $1.99 a gallon. I went to all the other stores and told them the 'prevailing rate' for milk is $1.99 a gallon so that's all I'll pay for milk. Of course, I didn't bother to mention to them that the expiration date on the $1.99 milk is today's date. I just provided enough information to get a discount on my milk."

I'm betting that the other stores didn't lower their milk prices one penny. So, when you hear the terms "market survey" and/or "prevailing rate" you'd better cover your rear. And set your own rates according to your own true costs of repair, with reasonable profitability added in.

Pre-loss condition

After years of adverse publicity concerning shops and insurers use of this term, I still occasionally hear it or see it used to describe the repairer's finished product. The truth, as Jim Lynas of Wreck Check proved, is that pre-loss condition can never be attained in a repair, in a legal sense. Simply stated, a repair shop is not able to duplicate exactly the procedures and conditions of manufacture used by the OE (dunk-coating/galvanizing being one of many), and therefore, in lawful application, collision shops are not able to attain pre-loss repairs.

Your repair might even be an improvement on the pre-loss factory built vehicle (better body gaps, or tighter suspension tolerances than factory). But pre-loss condition in the legal sense, the sense that could potentially drag you and your business into a lawsuit, goes further than fit and finish, to the vehicle's resale value.

The standard against which a court of law could pit your repairs, should you continue to advertise them as "pre-loss," is "inherent diminished value." The prosecuting attorney would ask the jury which of two used vehicles, identical in every detail including price, they would consider purchasing - one having been repaired and the other never repaired. The stigma that a vehicle has been repaired is enough to cause it to be devalued significantly in the resale market compared to its undamaged, never-repaired counterpart.