REFINISHING REPARATIONS
Mike Anderson’s most recent “Who Pays for What” report has been released; this time with its sights set on the use of invoicing systems for material costs. This latest report from the CEO of Collision Advice builds off findings from a 2021 survey that found that about half of bodyshops used a flat hourly rate model to bill for the cost of materials during refinishing work, while only about 19 percent used a materials calculator or invoicing system. According to Anderson, the portion of shops using these systems has remained largely unchanged, however, more than 40 percent of shops now report using a mix of flat rates and materials calculating, up from 32 percent in 2021. “I think the large change is due to the multiple increases in paint prices virtually all shops experienced since we last did this survey in January of 2022,” he said. Results from this most recent survey showed that the most significant change was to payment for two-tone work, which experienced a 5.9 percent drop to a total of 75 percent of shops who report “always” or “most of the time” being compensated for such work. “It would be interesting to know if [the compensation decline] is because shops previously included this under ‘second colour set-up’ and now they separate it out, or if there is insurance pressure as part of virtual reinspections,” Anderson speculated. “All of the paint manufacturers have bulletins on the need to denib or finish sand or buff, often noting (as the AkzoNobel statement reads) that, ‘It is not likely that a repair can be made that is completely free of surface defects,’ and that it is (as the Axalta statement reads) ‘a normal and necessary operation for both OEM manufacturers and collision repair shops.’
“Some automakers, like Toyota, Lexus, Nissan, and INFINITI, also have statements that processes (such as denibbing, finish sanding or buffing) are necessary even at the manufacturing plant as well as at body shops,” noted Anderson.
AFTERMARKET STRONG
DesRosiers Automotive Consultants (DAC) has released its latest Automotive Aftermarket scorecard, reporting increased repair costs 2022 and expectations for “strong [aftermarket] growth” in 2023. With parts shortages “widespread throughout the year,” writes DAC, the customer price index for passenger vehicle maintenance and repair services (as of December 2022) increased 5.6 percent compared to December 2021. Passenger vehicle parts, accessories and supplies consumer price indexes were up 8.6 percent in December 2022 over December 2021. The report also states that gasoline consumption (in place of vehicle usage data) remained “fairly steady” in 2022, with just a 1.9 percent decrease overall, which DAC says is “unsurprising given the improved efficiencies of the fleet.”
