Automotive Excellence SUMMER 2025_01_09-22-2025_DIGITAL - Flipbook - Page 20
BRACE FOR IMPACT:
RISING COSTS IMPACTING THE COLLISION
REPAIR INDUSTRY FOR 2025 - PART 2
Part One of this series examined the ongoing tension between insurers and independent repairers. The adverse
factors impacting the industry continue. The question then
becomes, what do repairers do next? Competing with the
big box multi-store operators for cars continues to be a
challenge. Not only do the MCOs get the “guaranteed” supply of cars, but they also have the ability to leverage their
scope and scale to better control their costs and purchase
more efficiently. There are other ways for an independent
to do this as well, such as franchise agreements, which can
help leverage the scale of the franchise. But for the repairer who truly wants to remain independent, there are few
alternatives.
What can the independent repairer do? How can they leverage their repair expertise and skills while being adequately
compensated? There are opportunities for buying groups,
collectives, and buying co-ops available through associations, and, although there are very few, coaching companies
work with vendors to bring the scale of many to smaller independent shops. The importance here is that the smaller shop
can now buy with the same discount structures as MSOs
without giving up their independence. Why is this a good
move for them? By reducing expenses, they can provide a
discount structure as they choose, to whom they choose.
This isn’t to say that the independent repairer is giving anything up; they are making calculated business decisions to
trade off percentages of their profit margins in areas where
they can afford to, leveraging it for reduced friction and
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BY KEITH MANICH
acceptance as a partner to those
who ultimately control the vehicle
flow. Unfortunately, this is the reality
that an independent repairer has to
deal with to compete. They must do
a masterful job of setting customer expectations to reduce insurer
influence over the customer. It can
be done with training, constant reinforcement, and performing consistent and repeatable daily tasks.
Then comes the task that no one
wants to talk about: negotiating.
Some folks take the position that
“I shouldn’t work positively with an
insurer since they don’t own the vehicle.” That may be so, but they do
have influence. The one area that we
have to recognize more than anything else is that they control the
pace. If you have to wait 10, 15, or 20
days to get an inspection or to get
paid, it is worth evaluating a modified business model that allows for
some flexibility. The importance of
keeping an open mind and leveraging every advantage that can be
identified is important for maintaining independence.
