"The pressure to contain prices from the insurance industry will always be there, just like with the medical health industry,” he said. “It makes it hard for a lot of shops that rely on DRPs because many of them are less than informed about charging, so they accept the insurance company's price pressure. I mean, if you've got a $1,200 repair and they offer you $800, and you accept it, you're falling right into their trap. Now you've fixed it to their price point rather than back to OEM standards. They're trying to apply cost-saving [tactics] rather than what it really takes to do a safe repair.”
Mello realized five years ago that OEM certifications were going to become more valuable, especially for an independent shop like Anderson Behel.
"We recently added Porsche and Volvo and also have certifications with Honda, Acura, Nissan and Subaru, as well as most of the domestics,” he said. “They give the consumer peace of mind, [as they] know we have the training and tools to fix their car right. It also helps our image because customers say 'I see all these Porsches here, so they must be a good shop.'"
Mello has seen some improvement in the industry within the last eight years and credits much of it to the state's former insurance commissioner, David Jones.
"We finally got someone that really seemed to care about our industry and wasn't just straddling the fence like his predecessors," he said. "Jones helped us with things such as steering and labor rate surveys and addressed the dance between aftermarket vs. factory parts."
Steering is still prevalent and will always be a hot topic, he said.
"Yes, steering is indeed still alive and well, even though it's illegal in California,” he said. “It's a two-sided sword because if we get the job, we call it a referral. But if we lose it to another shop for whatever reason, we call it steering. I admit that we play both sides of this, but my ideology is that it should be a free market and that customers should be able to take their vehicle to the shop of their choosing."