By John Yoswick
Are you doing too much work for free?
Industry trainer and consultant Mike Anderson of Collision Advice each year surveys thousands of shops to ask about 100 potential estimate line items, labor procedures that he sees many shops not billing for — without even thinking about whether they should.
“These are items that are not included in the estimating system labor times that shops are doing and that they could ask to be paid for,” Anderson said. “In every case, I know of shops that are billing and being paid for these line items. Now, a shop may make a business decision to not bill for some or all of these items. But all too often, shops aren’t making that type of informed decision. They frankly never thought of, or have forgotten, that these are not-included items that they are unknowingly doing for free.”
Here are 11 of these common estimate line item oversights
Anderson sees based on his quarterly “Who Pays for What?” surveys.
Refinish line items
Anderson’s list starts in the refinish department, where he has found that about one in nine shops acknowledge never having billed for “two-tone,” the labor to mix a second basecoat color, and to perform gun clean-up, when two colors are being used on the exterior of the vehicle. This is surprising to Anderson because his surveys since 2015 have consistently shown that among shops that do bill for this, the vast majority of them — 84 percent, according to a survey earlier this year — say they are paid “always” or “most of the time” by the eight largest auto insurers when this procedure is needed.
Even more shops — 44 percent — say they have never billed for the labor to ensure the texture of chip or gravel guard that they are applying matches that of the original on the rest of the vehicle. Yet an almost an equal percentage — 42 percent — say they are paid regularly for this procedure, which can include adjusting the spray pattern, using sanding or additional spraying, or making other adjustments to the application.
“The area, in inches, that the formula for this applies to varies among the estimating systems,” Anderson points out. “Masking labor may also be required for this step, and that labor also may not be included depending on which estimating system is being used.”
On the topic of masking, about one in seven shops (14 percent) say they never charge for masking beyond 36 inches from the panel being sprayed. This makes sense for Audatex users; that estimating system says this process, often described as “cover car,” is included in Autatex set-up times. But that’s not the case with the Mitchell and CCC estimating systems.
Anderson said he thinks his surveys have helped raise shops’ awareness of this. Back in 2015 when he first conducted a “Who Pays for What?” survey, far more shops (24 percent) said they never billed for this. Among shops now billing for this procedure when it’s needed, 80 percent said they are paid for it always or most of the time.
There’s been similar movement in billing for the labor involved in masking for priming. Five years ago, 39 percent of shops said they hadn’t billed for this. That fell to about 26 percent this year. The percentage of shops billing for it that say they are paid regularly has climbed from just 24 percent in 2015 to nearly twice that — 46 percent — this year.
A new procedure added to the survey this year is the labor to remove static electricity from plastic parts prior to refinishing, something required in some automakers repair procedures. Shops generally use an anti-static gun or wipes to accomplish this. The survey found that three in four shops don’t bill for this, yet all three estimating say this is a not-included labor operation.
“The use of an anti-static gun has not been factored into the refinish allowance,” Mitchell stated in response to an inquiry from the Database Enhancement Gateway. “After review, we have determined that anti-static gun usage is not factored into estimated refinish labor times and therefore not included, MOTOR, which produces the labor database used in the CCC estimating system, responded to a similar inquiry.
About 12 percent of shops say they don’t bill for the labor to refinish pinch welds after any damage caused by anchoring clamps has been repaired, yet 71 percent of shops billing for this are paid regularly.
“In my opinion, that 71 percent should be 100 percent,” Anderson said. “I have not found any vehicle manufacturer or any frame equipment company that says it’s okay to secure a fixture clamp to pinchwelds without first removing all undercoating and seam sealer. If this isn’t done, it increases the likelihood that the vehicle can slip when you are pulling it, causing further damage or adversely impacting the accuracy of the measurements. So once the pinchweld damage is repaired, it needs to be refinished.”
Other labor procedures
But the paint department isn’t the only part of the shop performing not-included procedures shops may not be including on estimates or invoices.
Collision repairers are increasingly finding themselves researching the diagnostic trouble codes (DTCs) that vehicle scanning reveals. About three in 10 shops (29 percent) in 2020 said they are paid always or most of the time for this procedure, yet nearly half of all shops said they’d never charged for it.
Three collision repair trade organizations earlier this year jointly issued a position statement distinguishing a charge for vehicle scanning as distinct from “all other procedures necessary to correctly and safely identify and address a vehicle’s electronic system faults or diagnostic trouble codes … [which] are considered additional operations and not included in the scanning operation.”And Anderson agrees.
“Say I scan a vehicle and it has seven DTCs. For each of those codes, I have to search for that code in the OEM repair procedures. I have to find out what it means,” he said, predicting that more shops will bill for this procedure in the future.
When a vehicle towed into the shop cannot be started or driven, technicians have to jack it up and put dollies underneath it — or it may require multiple people to physically push it — to get it into the shop to begin repairs. Despite the effort and time involved in that process, nearly half of shops (45 percent) have never billed for this process. Among those who do, nearly half (49 percent) say they are reimbursed for this regularly.
“Recently I was in a shop where a technician had to go out and complete partial repairs of the suspension in the parking lot just so the vehicle could be moved into the shop,” Anderson said. “All of that time and effort is a not-included operation.”
When the procedure was first added to the “Who Pays” surveys four years ago, more than 55 percent of shops said they had never charged for moving an incapacitated vehicle into the shop. Today, that figure is down to 45 percent.
“I think as more shops gradually realize that this is a labor-intensive service that is every bit as necessary as towing an immobile vehicle to the shop in the first place, more and more are including a charge for it on their estimates,” Anderson said.
Test driving a vehicle after repairs has become an increasingly necessary safety check procedure — and insurers are more regularly reimbursing shops for the time it takes to complete the process.
“If you don’t test drive a vehicle, and your customer discovers a tire out of balance, that’s one thing,” Anderson said. “But if a safety system doesn’t get calibrated because you didn’t test drive a vehicle, that’s critical.”
Back in 2015, nearly 70 percent of shops said the eight largest insurers “never” paid for a test drive after repairs, and fewer than 15 percent of shops that negotiated to be paid for it were being reimbursed on a regular basis. That has changed significantly. Now nearly two out of five shops (37 percent) say they are being paid “always” or “most of the time” for test drives after repairs.
Similar though less dramatic improvements have also been reported by shops performing and billing for diagnostic test drives as part of the repair process. More than one in five shops (21 percent) said insurers regularly pay when they bill for this procedure, yet almost three out of five shops (57 percent) still say they have never billed for a diagnostic test-drive.
One way to train, remember
Anderson said one way shops can help educate and remind estimators about not-included procedures and line items like these is to participate in the quarterly “Who Pays for What?” surveys (go to www.CrashNetwork.com/whopays to do so).
“Shops tell us just taking the surveys is helpful, and everyone who participates receives all the results in a report that includes resources to help put the findings to use for your business,” Anderson said. “I usually recommend that a shop pick a handful of these procedures they’re not billing for, and work to do so when it is a procedure they are performing. Once that becomes ingrained into their processes, they can choose another few procedures to work on.”
The current survey focuses on frame and mechanical labor operations. Last July, about one-third of shops acknowledged they haven’t billed for the labor for a “pre-diagnostic alignment” to determine if any suspension components will be needed as part of the repair. Yet nearly half (49 percent) of the shops billing the largest auto insurers for this procedure said they are paid always or most of the time.
“This summer’s survey will help us determine if that still holds true, or if more shops are thinking to bill for this,” Anderson said. •
John Yoswick, a freelance writer based in Portland, Ore., who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network bulletin (www.CrashNetwork.com). He can be contacted by email at john@CrashNetwork.com.
