You get what you ask for--make sure it's enough
In Collision Repair 9#3, Tom Bissonnette asked the Canadian collision repair industry to submit estimates for a 2004 Chevy Suburban. People from coast to coast sent in responses--here's what Tom found out.
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The estimates are still trickling in from my last article--thanks to all that have taken the time to help me out with this project.  The first thing that came to mind when I reviewed the estimates was the fact that many facilities are simply not charging for all the procedures that they actually perform--or at least I hope they perform.
If not, then it is no wonder people are not fussy about getting their cars fixed after an accident. Insurance companies are required to repair the vehicle to "pre-accident" condition. This would allow time to do a repair that is invisible to the customer; they should not be able to tell that their car was in an accident. I know that in my marketplace many of the line items that I will mention in this article were added only after the industry finally put their foot down and demanded to be paid for procedures that are clearly spelled out in our estimating P-Pages.  By not allowing the time to do proper repair procedures, insurance companies have inadvertently contributed to the poor image of our industry causing consumers to make comments like "once a vehicle is in an accident it is never the same."
Profitability of collision facilities is a big concern for those of us in the trade these days. We would love to see the labour rate approach that of other four-year trades so that we can compete for future employees and make a decent profit. In the meantime, while we don’t have labour rates up where we feel they should be, we should at least be paid fairly for each and every operation that we perform. The results | Criteria | Results |
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| Labour Rate | The average labour rate of all estimates was $63.00 per hour. | | Paint | The average paint material rate was $32.00 per hour. | | Average Paint Hours | 4.6. The highest was 6.5 and the lowest was 1.5. | | Average paint materials | $147. The highest was $214 and the lowest was $58. | | Material Rate | The average shop material rate was $4.70 per hour, 22% of the shops received nothing for shop materials. Average shop material cost was $33. The highest was $95 and the lowest was $0. | | Estimate | The average estimate was $975. The highest was $1710 and the lowest was $464. | | Repair Time | The average repair time of the dent was just under 6.0 hours. The highest was 10.0 and the lowest was 3.0. The average total repair hours were 7.0. The highest was 11.6 and the lowest was 4.0. | | Left Quarter Panel Glass | Only 20% of facilities removed the left quarter panel glass. The issue of refinish lifetime warranty is compromised if this is not done. | | Mask for Overspray | Only 33% of facilities elected to charge for "mask for overspray" even though both Audatex and Mitchell clearly state that masking of inside jambs and edges are an extra charge item. Mitchell even has a formula for masking inside jambs at the very end of the Refinish Section Procedure 28 of their P-Pages*--I’m not sure if Audatex has such a formula. | | Corrosion Protection | Only 60% of shops charged for Corrosion Protection even though both Audatex and Mitchell clearly state that this is an extra process that needs to be paid for. Some shops charge a flat dollar amount while others charged an hourly amount of refinish time and materials. I think the time and materials is a better way to show this process so it shows up on the repair plan that the technician gets and allows them time to do the job. | | Feather, Fill and Sand | Only 20% of shops charged to "feather, fill and sand" the repaired panel even though both Audatex and Mitchell clearly state that their paint times are for "new undamaged panels." They both acknowledge that there is a process to bring a repaired panel to this state but neither company has a formula to determine how much time should be allowed. Refer to the ASA Repaired Panel worksheet to see the extra steps required for a repaired panel and you will see that they came up with an additional 1.3 hours to feather edge, prime and block the repaired area. In a shop environment, a painter may do several vehicles at one time so I think at least 1.0 is sufficient for most jobs. Large repaired panels (fleetsides) may require more time. | | Covering the Vehicle | Only 18% of shops allowed extra time to cover or "bag" the vehicle to prevent overspray damage. Both Audatex and Mitchell clearly state that their paint times only allow masking up to 36” away from the repaired area. Audatex allows .2 for covering or bagging of a vehicle--more than once if necessary (priming then painting). | | Hazardous Waste Removal | Only 62% of shops charged for hazardous waste removal usually as a dollar amount on the estimate. I am aware that some insurance companies include this fee in their paint materials but I believe it is better to show it as a separate item and shops should check to see that they are collecting enough money to offset this very necessary part of the repair process. | | Clean the Vehicle for Delivery | Only 20% of shops charged to "Clean the Vehicle for Delivery." Somehow insurance companies have convinced most shops that cleaning the car is a "cost of doing business" or that it is the customer’s responsibility to bring their car in clean inside and out. Those of us in the trade know better. Lots of vehicle’s show up on a tow truck or in inclement weather and there is no way we can work on vehicles that have a layer of dirt on them. Audatex mentions final clean but does not suggest a time for it. I think a good start for this would be .5 for each and every vehicle that shows up for repairs. | | Colour Tinting | 4% of shops charged for color tinting. This is a hard call on this job but if you have a nasty color Audatex suggests anywhere from .1 to 1.0 should be allowed with .5 being the average. Spray out cards would easily show this to the insurance company appraiser. | | Spot Painting | Amazingly, 16% of shops elected to "spot paint" this repair by putting a rolled edge on the body line and they cut back their paint time! I find this perplexing because they have just nullified any paint manufacturer’s warranty and they have done a much more complex repair than simply applying color and clearing the entire panel--a higher skill set is required to do this job for less money? | | Trim | 98% of the shops charged to R&I trim but 100% did not charge for all the trim that needed to be removed to make this repair invisible! I realize the photos in the magazine did not show things like the roof moulding, the running board or the emblem at the front of the panel so these I can understand. Most shops did not take the fuel door off even though it is in plain view. | | Respondents | 54% of the respondents were independent shops, 22% were dealer shops and 24% were network shops. | | Estimating System | 60% of the shops used Mitchell’s Ultramate and 40% used Audatex’s estimating system. | | Administrative Time | Not even one shop billed for administrative time. With all the extra reporting, computer programs and electronic data transfer this is quickly becoming a major cost for collision facilities--at our shop we spend in excess of $1000/mo for management and estimating software. Statistics show the average admin time per RO is now in excess of 5.0 hours and most small shop owners work late evenings and weekends to keep on top of this (I received several estimates well after shop closing time). Isn't it reasonable for shops to start charging a flat fee for admin work? Independent appraisers already do, why can’t we? Is $100 per RO unreasonable? |
 I took the average labour and material rates from all of the estimates then I used all the best practices recommended by Audatex, Mitchell, ASA and the facilities that responded to this survey and did what I believe to be a very realistic estimate on this repair.
The bottom line was $1676 (see below). Next I took some advice from the folks at Audatex--in their P-Pages they state that roughly 15% of jobs have to be either partially or completely re-done. Some of these re-dos are technician error and some are environmental. With this in mind I upped the labour and material rates by 15 per cent and re-calculated my original estimate. My new total: $1906! Almost $1000 more than our average estimate! (And you wonder why you have trouble making money?) (Click the play button to see both estimates, two pages each.) There is no question in my mind that labour rates need to go up. But at the very least, facility owners and managers need to start billing for all the procedures that their technicians perform to repair customers' vehicles. You need to know and understand the procedure pages of your estimating system and you need to have the courage to stand up to the insurance companies and appraisers who refuse to pay for proper repair procedures. Your livelihood and the image of our industry depend on it! Additional information: Download the ASA's Refinish Procedures here (Click play button to see all additional documents--five pages in total.)
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