20 years ago in the collision repair industry (October 1993)

A proposal was introduced at the Collision Industry Conference (CIC) in Denver to develop a third-party evaluation of how shops are reimbursed for refinish and other materials.

Steve Nadler, the owner of Painters Supply Company in Denver, distributed a 2-page memo suggesting that a national certified public accounting firm be hired to study the materials reimbursement issue. Nadler said this study could address the accuracy of such practices as basing materials reimbursement on paint labor hours, and establishing “ceilings” or “caps” on material charges.

No data has been identified that can be used “to support the present reimbursement methods,” Nadler’s memo states.

He suggested that a CIC subcommittee be formed to develop a request for proposals for the study from the nation’s top CPA firms. Nadler said that this step would provide the industry with estimates of the cost of the 1- to 2-year project.

“I could say it’s not going to be $5,000. I don’t think it would be $500,000,” Nadler said when asked for some projection of costs. “On a full-fee basis, it might be anywhere from $100,000 to $150,000. But that’s purely speculative on my part, and depends on the scope of the project.”

Joe Landolfi of Kemper Insurance said the study may put to rest an issue that has been hotly debated in recent years.

“We have listened for quite a while about paint materials reimbursement practices,” Landolfi said. “This may be a chance to finally (establish) some definitive explanations and patterns.” But Rick Tuuri of ADP said his company is all too aware of the expense and risk of undertaking such a research project. ADP completed a massive revamping of its paint labor system several years ago, only to meet with unprecedented industry resistance.

“This is just my personal opinion, not the ADP company line, but it just seems to me that you can spend an awful lot of money studying something to find an answer that nobody really wants to hear,” Tuuri said.

- The project, at least how Nadler outlined it, does not appear to have ever moved forward.

15 years ago in the collision repair industry (October 1998)

Jack Gillis of CAPA perhaps best summed up a demonstration of non-OEM parts at the Collision Industry Conference (CIC) in October when he said, “Not one of our better days.”

The demonstration, arranged by the CIC Parts and Airbags Committee, involved installing several non-OEM parts, including a hood and fender that bore the CAPA-certified sticker, on an undamaged 1994 Toyota Camry. Fit and other problems with the parts were obvious, and after the demonstration Gillis said neither of the parts would be listed as certified in the next Certified Automotive Parts Association (CAPA) directory.

The fender, he said, had been decertified earlier in the week because of more than 20 complaints, including one the week of the CIC demonstration that was the second complaint after the manufacturer had supposedly fixed earlier problems with the part.

—Test fits of parts continued at CIC meetings over the next two years; OEM parts generally were found to score higher in attendees’ evaluations of fit and finish, but occasionally non-OEM parts were rated as equal to—and in one case, better than—the OEM.

10 years ago in the collision repair industry (October 2003)

In a special 2-year study of the autobody repair industry, the California Department of Consumers Affairs’ Bureau of Automotive Repair (BAR) documented that, in nearly half the transactions it studied, consumers were charged for parts and labor they didn’t receive.

The BAR inspected 1,315 vehicles that qualified as part of a pilot program mandated by legislation. Of those, 551, or 42 percent, had parts or labor listed on the invoice that were not actually supplied or performed. The average dollar amount of overbilling was $811.93.

“We’re disturbed by the pattern of problems we found in some shops,” said BAR Chief Patrick Dorais.

– As reported in Autobody News. While the “42 percent” statistic received a lot of attention, the National Auto Body Council (NABC) noted (in the article) that the vehicles inspected were not randomly selected among all those repaired in California but rather were vehicles brought to the BAR by owners concerned about possible fraud. “Considering the way the sample was skewed by the BAR’s methodology, it is more surprising that 57 percent of the repaired vehicles showed no problems at all,” Chuck Sulkala of the NABC said at the time.

5 years ago in the collision repair industry (October 2008)

At least six shops in the Temple, Texas, area (about 70 miles north of Austin, population about 60,000) each notified State Farm they no longer would participate in the insurer’s Select Service program.

Mark Holladay, manager of the Don Ringler Chevrolet body shop, said the final factor contributing to his decision was what he viewed as State Farm’s unwillingness to postpone a training class (on how to process total losses for State Farm) that the insurer was requiring the shops to attend at a time when Holladay and his five technicians were working 60- and 70-hour weeks repairing vehicles damaged in a recent hailstorm.

“All we asked from the very beginning was that we be allowed to postpone this (class) for a month or two until things kind of got worked down after that hailstorm,” Holladay said. “We were all just at our max. We were told straight up, it was just, “No.”

He said he has not seen any significant change in the amount of State Farm work the shop is doing. “I think it was a good decision,” Holladay said.

Gene Sneed, who along with his wife Barbara, owns and operates B&G Collision and B&G Paint & Body in Temple, also removed his two shops from the Select Service program. This summer, he and about eight other shops in the area began jointly sponsoring newspaper ads urging consumers to use the shop of their choice.

“They will promise you the world in order to persuade you to go to one of their direct repair or network shops,” one of the ads states about insurers. “Don’t be steered wrong.”

—from CRASH Network (www.CRASHnetwork.com), October 6, 2008.

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