By Mike Davey
Hamilton, Ontario -- October 10, 2017 -- Providing free estimates is a common practice across many industries, including collision repair. However, there's an unquestionable cost associated with doing this. We recently asked our readers if they think the practice should continue.
Collision Repair magazine runs new surveys every week. Our next survey looks at the liability issues brought to the fore by the John Eagle Collision Centre case in Texas. For more on this, please see "Shop ordered to pay $31.5 million in damages for improper repair." How can shops protect themselves? Take the survey at this link and let us know.
The overwhelming majority of respondents (84 percent) indicated that they do provide free estimates. A further 4 percent indicated they do not. The remaining 12 percent chose “other” and provided more information. In general, these shops in fact do provide free estimates, but only under certain conditions. Some indicated “insurer only,” presumably indicating that a consumer off the street could not receive a free estimate. A few respondents charge a flat fee for estimates on heavier collisions, possibly to guard against the increased chance of a total write-off. Some charge fleet customers a nominal fee, with the fee being deducted from the price of the repair.
Just because it’s free for customers doesn’t mean it’s free for you. There’s always a cost to any operation and estimates are no different. We asked our readers to let us know what they think the typical estimate actually costs.
“About $50” was a fairly common answer, but some respondents came in much lower. Another common price point was $75. However, some shop owners peg the average cost much higher. As always, comments are provided anonymously, with only minimal editing from us.
“$150-$200 is a good guess. We spend about an hour on the estimate, which we have to wash, then dismantle, assess and record the damage with a trained technician (sometimes two), re-assemble, search for used and PXN parts when required, research OEM procedures (this is relatively new), all this in about an hour. The "estimate" is usually revised a second or third time once the vehicle is completely dismantled, adding another 30 minutes or so.”
“It costs approximately $100 per estimate just for labour. And another $100 in overhead.”
“It depends on the estimate. A relatively simple estimate only takes 10 minutes or so. However, a lengthy, complicated one can take at least an hour. I've done some really big hits that, from start to finish, taking photos, finding the correct parts in Mitchell, double checking on the vehicle, calling the dealer for parts not in Mitchell … it has taken up to 3 hours. That's a lot of back and forth and running around!”
However, there are also those who simply don’t count the cost. They have their reasons, most of which come down to customer service:
“In the grand scheme of things, giving free estimates brings in more work and happier customers. Happy customers are going to relay that by word of mouth and bring in more business. "Free" estimates really don't cost us a thing in the end, as they bring in more work that we might not have gotten in the first place.
“As the owner, estimator and tech of a small shop, I have never thought of it costing us anything to provide free estimates. It gives us a chance to talk directly with our customers, explain how or why we do what we do, the products and procedures involved in new cars. “
Next, we asked readers to let us know if the practice should continue. The single largest answer was “No” at 64 percent, with a further 31 percent indicating it should. The remainder (5 percent) answered “Other,” with answers essentially boiling down to “maybe, if ... ?”
So, if that many repairers would like to stop offering them, why does the practice continue? As usual, the comments left on the question help to fill in the blanks:
“Going to be hard to change to paying estimates unless everyone is on board.”
“Only way charging for an estimate will work is if EVERYONE does it!”
“Someone will always be willing to provide free estimates. With a highly fragmented industry, it would be impossible to get all shops on the same page with this.”
Collision Repair magazine’s next survey looks at the potential liabilities arising from repairs that deviate from OEM procedures. Will we see similar cases in Canada in the future? Click here to participate in our latest survey and let us know, and make sure to watch collisionrepairmag.com next Wednesday for the results!