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Mike Anderson

mike anderson autobody newsMike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.

 
Thursday, 04 June 2020 12:31

From the Desk of Mike Anderson: Determining Whether---and How---to Charge for OEM Research

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I get a lot of questions from shops regarding billing for the process of researching OEM repair procedures.

Obviously, I can’t tell anyone whether to charge for this, nor how much to charge, but I can point to some things you may want to consider as you make that decision for your business.

 

First, I can tell you what our “Who Pays for What?” surveys indicate about what’s happening in the industry related to billing for OEM procedure research. The surveys definitely show a growing number of shops are charging an administrative fee for this work.

 

Back in 2015, three in four shops said they’d never sought to be paid such a fee. Last year, just shy of half (49 %) said they had. Among those seeking to be paid, about half said the largest eight insurance companies weren’t paying the fee, but 16% said otherwise, saying they were being paid “always” or “most of the time” for OEM research. That was up from just 6% five years ago.

 

FREQUENCY OF BILLING PAYMENT web

Next, I can tell you the two aspects to keep in mind as you determine whether and what to charge for OEM research.

 

First, consider what you’re spending to access the OEM procedures. A few automakers make access to the information available at no charge, but most charge a subscription fee. If you’re working on a type of vehicle you rarely repair, you might just pay for a day or two of access to that automaker’s procedures, and your receipt for that can serve as part of the justification for your charge.

 

But maybe you buy annual subscriptions to some automakers’ procedures because you use them regularly. A “Who Pays for What?” survey last year, for example, found more than 25% of shops have an annual subscription to the Honda/Acura repair information website, and even more have one to the Nissan/Infiniti website.

 

In that situation, you might consider calculating a per-vehicle cost for that access. Say you pay $400 a year to access one automaker’s information, and you repaired 100 of that automaker’s vehicles last year. Then that access averaged $4 a vehicle. Whether you bill for it---marked-up or not---is another business decision for you to make.

 

subscription fee web

 

Our surveys last year asked whether shops charge a separate line item specifically to cover the access fees they pay for OEM information. Almost one in four (23 %) say they always or almost always do, and another 20% said they do when using an OEM site for which they don’t have an annual subscription.


The second thing to consider as you determine whether and what to charge for OEM research is the labor time involved. That consists of the time to find all the needed information within the OEM system, read it, print it and distribute or review it as needed with technicians.

 

As many of you are likely well aware, that can be a time-consuming task. One of my teammates, Josh Kuehn, recently wrote an estimate to replace a quarter panel on an Acura MDX. He had to pull more than 90 pages of OEM repair procedures.

 

It’s not a matter of just pulling the procedures for the quarter panel. You need to know, for example, what’s involved in removing and reinstalling the bumper cover. You need to know, if removing and reinstalling a door is involved, whether you need to reinitialize the pinch protection on the window. You need to know what steps are required after reconnecting the battery if disconnected for welding. You need to look up all the corrosion protection steps involved.

 

Some might argue that Josh should know some of what’s included in those procedures. But you can’t take anything for granted, because procedures vary from model to model and may change over time.

 

It also can involve digging for needed information other than the first place on the OEM website where you might assume you’d find it.

 

I was contacted by a shop that had researched the OEM procedures for replacing a rocker panel on a specific vehicle. Because no sectioning procedure was shown, the shop replaced the entire rocker panel. The insurance company involved refused to pay because there was a sectioning procedure. It just was included under the door post section of the OEM website.

 

So sometimes you have to think outside the box and look in other areas as you do the research. All of the OEM websites are organized differently.

 

I had a similar experience to Josh’s when I recently wrote an estimate to replace a quarter panel on a Toyota Camry; more than 90 pages of documents were involved. I by no means claim to the best at researching OEM procedures, but I believe I’m above average. Yet I easily had five hours into researching the OEM procedures and writing the estimate.

 

Now obviously, the more OEM research you do, the better and faster you will get at it. Repetition breeds efficiency. That’s why a few shops---our surveys indicate about one in 20---designate a particular person to do all the OEM research.

 

There are third-party solutions that standardize the organization of the OEM information, which is great, though I still am a proponent of accessing the OEM information directly. But in any case, this is definitely not a five-minute task.

 

I know there are efforts under way by automakers, estimating system providers and others to create solutions to these challenges, to help reduce the amount of time it requires to find the correct dozens of pages of documents needed for most repairs.

 

But until that happens, you need to keep doing it, and consider whether it is something for which you should charge. And above all, save all the researched documents with the job file, so in case you ever need to do so, you can prove how the automaker called for the vehicle to be repaired at the time you did it.