Beth Seberger, director of operations for Probst Collision in New Lenox, IL, said the company may be bucking the trend many shops have seen this year because it isn’t experiencing any slowdown.
“While we typically have slow periods, we have not even seen that this year,” Seberger said. “I frequently read about [slowdowns] in articles, but it’s just not something we’re personally encountering. We are fortunate to be a small family business that has been in the area for 48 years.”
But Seberger is right: Plenty of shops have seen a falloff this year, with auto insurance claims counts in the third quarter estimated to be down about 3% to 5% — an improvement from even bigger declines in the first half of the year. So how are shops responding to any decline in sales they are seeing?
Some have made the difficult decision to reduce staffing.
“Our sales are down 17% compared to 2024,” Tiffany Silva of Accurate Auto Body in Richmond, CA, said this fall. “Over the past year, we reduced our staff by eight positions, including both technicians and support personnel. In previous years, strong sales allowed us to operate with a larger team, but with the recent decline, we made the difficult decision to adjust staffing levels to reduce overhead.”
Despite the challenges, she said, the shop has found some opportunities “that position us for growth.”
“Most notably, we gained a new account focused on repairing vehicles damaged during shipping” on trains from Mexico, Silva said. “There has been an increasing trend of vehicles sustaining damage while in transit to local ports, and this partnership allows us to serve a growing need in the market.”
She said the shop is also doing more customer-pay work than it had been.
“In the past, we limited ourselves to insurance-based repairs, as many self-pay customers were hesitant to authorize the full scope of work required for a proper repair,” Silva said. “For example, a customer might approve replacing a door but decline the necessary blending of paint to ensure a seamless finish. Our commitment has always been that every vehicle we repair is restored correctly and safely. Today, we are seeing more self-pay customers who understand and are willing to invest in the complete and proper repair of their vehicle. This shift opens the door to new business while staying true to our standards of quality and safety.”
Ramping up advertising, trimming staff
Dave Robinson of USA Collision, a shop in Phoenix, AZ, that in past years had sales of about $3 million with no direct repair programs, said most of the declines in business he experienced happened last year, with 2024 sales down about 12% over the previous year. He said he cut two employees (one estimator, one salaried body tech) to reduce expenses.
Things have been a bit more stable this year, he said. The company picked up two fleet accounts. He’d spent about $42,000 in advertising last year (mostly Google and Yelp) but raised that to $73,000 this year (including redoing the shop’s website).
“I think we are doing better than the overall [industry] to date,” Robinson said.
Pete Stemper, owner of Stemper Auto Body in Madison, SD, said double-digit percentage declines in business this year meant he needed to reduce staffing.
“Previously, we employed 22 staff members, but we are down to 18 employees, and even with a reduced team, we’re still short of work,” Stemper said. “At the same time, our fixed operating costs have risen by more than 28%, and employees are understandably asking for wage increases to keep up with rising costs at home, and we don’t fault anyone for that. It’s a tough time for everyone.”
In response, he said, “We’ve begun expanding into heavy equipment repair and fiberglass repairs to adapt and survive.”
Finding new sources of work
Adam Gorsuch, general manager of Adam’s Auto Body Shop in North Chicago, IL, said the company began addressing the decline in claims count last year.
“We applied to do work for the state,” Gorsuch said. “It took some time to get approved, but we started getting work late last year. We also reached out to some different insurance companies about becoming a DRP for them. We were able to add three different ones, all premium companies. We also started asking for mechanical work from our existing customers. We switched all our techs to commission, and their productivity jumped 100%. It has taken some time, but it really has been worth it. We are down a little in volume but seeing more profit.”
Kris Wyatt of Wyatt’s Paint & Body in San Bernardino, CA, is another shop owner who hasn’t seen much change in gross sales this year. Parts sales are down, but labor sales are up, resulting in a negligible overall change.
Paul Vincent said his company is focusing on OEM certifications and has brought in a marketing director.Paul Vincent, president of Guardian Collision, opened the business in Jacksonville, FL, just last year, so the company doesn’t have a lot of historical data to gauge current conditions. (Vincent sold his prior three-shop business to a larger MSO in early 2023.) But he said the company has grown since last summer.
“We focus on OEM certifications and have brought in a full-time marketing director to grow our brand and reach,” he said.
Dealing with new MSO competition
“Our sales have decreased by approximately 15% compared to the first six months of 2024,” Joy Braido, chief financial officer for Auto Body Expressions in Elk Grove, CA, said. “Part of this reduction in sales is related to two new body shops opening in the last year within a few blocks of our facility. One is an MSO that has ‘deals’ with some insurers — for which we are DRPs — that get them automatically on the program as soon as their doors open in a new location. This is a problem we have dealt with repeatedly for the past 34 years and have accepted the fact that life is simply not always fair.”
The good news, she said, is that the new MSO locations tend to get a portion of her shop’s DRP claims only for a short time.
“Once their scorecards fall below ours — which they always do — our claim [counts] picks back up,” Braido said. “This temporary setback usually lasts about three months. We always remain focused on providing 100% excellence with every repair, getting the Elk Grove Chamber of Commerce’s ‘Best Body Repair’ award the past seven years, something we proudly include in our social media advertising.”
She said the shop now has 10 automaker shop certifications and has added two more DRPs.
“We downsized our staff by one estimator, but the remaining staff is the same,” Braido said. “We don’t want to lose good people. We remain positive every day, we have great leaders on our team, and we are hoping claims will pick up soon.”
John Yoswick