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John Yoswick

John YoswickJohn Yoswick is a freelance automotive writer based in Portland, Oregon, who has been writing about the collision industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com).


He can be contacted at john@crashnetwork.com 

Thursday, 07 May 2020 15:53

Finding Some Hopeful Bits of Good News Amid the Pandemic Fallout

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Index

It was a bleak spring for many shops, but there have been some glimmers of hope for a better summer ahead.

Here are some potential bits of good news for collision repairers.

 

States are opening back up. Eighteen states began reopening their economies and public life in early May, and about another half dozen doing so in mid-May leaves fewer than half of states still shut down or severely restricted. Life and business won’t completely be returning to “normal” anywhere for a bit, but with businesses reopening and more people getting out and about, the need for collision repair work should begin to rebound.

 

Traffic levels are growing since bottoming out in early April. Passenger vehicle traffic nationwide ticked up slightly April 18-24, the third week-over-week rise in a row. Though it remained just 59% of what it was in February, it was more than an 11% improvement from a month earlier, when it bottomed out at just 53% of “normal,” according to the traffic analyst firm INRIX.

 

Traffic was up in all 50 states; Rhode Island saw the smallest increase (less than 1%), but seven states (Wyoming, South Dakota, Montana, Nebraska, Iowa, Minnesota and Colorado) all saw week-over-week increases of 10% or more April 18-24.

Personal vehicle traffic also was up that week in all 98 of the metropolitan areas INRIX is tracking. The metro areas with the largest week-over-week improvements April 18-24 were Omaha, NE (up 12%), Denver, CO, and Des Moines, IA (each up 11%), Colorado Springs, CO (up 10%), and Minneapolis, MN (up 9%.)

 

Many insurers are paying for COVID-19 cleaning. Added efforts to clean vehicles as they come in for repairs, and before they are returned to customers, to reduce the risk of COVID-19 transmission has become a routine "repair operation" for most shops, and it's a procedure more and more shops are now successfully billing for as a line item. A survey of more than 650 shops found almost 3 out of 4 (73%) shops are performing and charging for the added vehicle cleaning process.

 

“Most insurance companies have sent out a very nice 'stay healthy' bulletin authorizing a charge for disinfecting customers' vehicles on arrival and before return to the customer," a shop manager in an Idaho suburb said.

 

Nationwide sent a memo to its direct repair shops at the end of March, saying it would pay for one labor hour and $25 in materials for “sanitizing the vehicle when it arrives and prior to delivery to the customer.” No additional documentation would be necessary unless charges exceed this amount, Nationwide told its direct repair shops.

 

CARSTAR’s corporate staff told its franchise shops in mid-April that State Farm had agreed to pay its direct repair shops a similar amount for added vehicle cleaning.

 

USAA on April 10 also said it would pay a “sanitize vehicle” estimate line item, but the amount it said it would pay---one-half of a labor hour and $15 in materials---was about half of what State Farm and Nationwide had agreed to pay shops.

 

Shops’ fears about business survival seem to be easing. One industry survey in early April found that almost 1 in 4 (23%) said they were very (or extremely) concerned about still being in business even just 30 days in the future, but by the second half of April that level of concern was expressed by just 14% of shops.


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