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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.

 
Monday, 01 February 2021 23:48

From the Desk of Mike Anderson: How to Improve Paint Materials Reimbursement

Written by by Mike Anderson
This Honda ad shows there is an upcharge for customers choosing certain vehicle colors, an indication that refinishing those vehicles will require additional materials reimbursement. This Honda ad shows there is an upcharge for customers choosing certain vehicle colors, an indication that refinishing those vehicles will require additional materials reimbursement.

Index

...when dealing with specialty finishes: The manufacturer of the paint line you are spraying.

 

I know Axalta Coating Systems, for example, gives an estimator the ability to print off from the scale a guide to specialty colors. It’s a regularly updated list of what make, model and year vehicles have three- or four-stage finishes, or that require a “limited use toner.”

 

Other paint manufacturers may offer something similar. It’s another way to demonstrate why additional reimbursement for materials is needed for those vehicles.

 

The next two of the four negotiation questions can be answered quickly. All of the estimating systems clearly state materials are not included in the refinish labor times, and there’s no pre-determined “time” for materials.

 

Don’t forget you can always use the Database Enhancement Gateway if there’s a question about whether something is included or not-included.

 

So in terms of refinish materials, it comes down to the fourth negotiation question: What’s it’s worth?

 

We’ll have some of the very latest industry data on that in March, when the report on our “Who Pays for What?” survey related to refinish, which took place in January, is compiled.

 

But even the 2020 survey report offers some good insights. Although about 70% of shops still rely on the traditional multiplier method---dollars per refinish hour---to attempt to cover their cost of paint and materials, that’s been changing. The percentage of shops using invoicing systems to bill for refinish materials has steadily risen over the past five years, from 19% to 28%.

 

calculation method.jpg web

 

And the majority of shops who use them say they are paid by the eight largest insurers "always" or "most of the time" when they bill based on the charges calculated by their invoicing system. Shops report...