The Present And The Future

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Over the last several years it has become clear to progressive repairers that modern cars cannot be repaired correctly without good current equipment, well trained staff and disciplined adherence to correct, vehicle-specific repair procedures.

With significant investments in equipment and training these repairers are  able repair to vehicles properly now and in the future. 

Many have followed this model, but a significant majority of the repair industry is still “repairing” cars with few changes from 5 or 10 years ago. So far, the cars are going out the door, the insurance company is not being asked to pay for sophisticated repairs, and nobody had to think outside of yesterday’s box.

In 2021 the progressive repairers are ready for a future of correct repairs but many other operators are hoping it will not arrive. They are making money now and the requirements for correct repairs include expensive equipment and training (also expensive) that will be very hard to do with a group of technicians who have not had to take any training for many years.

As examples of how hard this will be for the overall industry, here are a few observations from Canada …

  • In Saskatchewan, Saskatchewan Government Insurance (SGI) wants cars to be repaired better and operators will have to show that they have the right equipment to do the repairs. In January of 2020 they were told they would have to have some key pieces of equipment by March 2021. And if they don’t, they would still be allowed to repair cars for SGI, they just won’t get paid as much.
  • The Insurance Corporation of British Columbia (ICBC) has a new collision repair program to encourage operators to become properly equipped and trained. One equipment supplier asked me how often we use our electronic measuring equipment (we have had it for over 12 years and use it many times each week) as he had customers asking him why they would need to buy that equipment just so it could gather dust in the corner. Or the other one telling him that he didn’t need a resistance spot welder (which is the only equipment that can be used to weld light-weight high-strength steel properly) because his technicians could weld anything they came across now with the equipment they had.
  • A young estimator was at a job interview in 2019. He asked the operator how they accessed the correct repair procedure, and was told, “We don’t do any of that. Cars are easy to fix, and we know how.”

In America, Jeff Peevey, a knowledgeable industry participant, talked about being underwater at a presentation to the Collision Industry Conference (CIC) in early 2020. His point was that what had been described as a tsunami of change a few years ago was in fact not a tsunami, it was a sea level change, and most repairers are still on the old beach, underwater.

Dornbusch’s Law

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In 2016 there was a 5-year time frame suggested for the changes needed in the industry to repair cars properly. If these changes were not made there could very well be a real crisis in the industry.

In 2021 these changes have not been made, but the crisis has not yet arrived. This does not mean that the 2016 prediction was wrong—just that it was off by a year or two.

Economists recognize that there is a lot more to finance than just numbers, and many of their principles apply to a very broad range of circumstances and behaviour. 

Rudi Dornbusch was an economist who worked at several prestigious American universities from the 70s to the early 2000s. Students of international macroeconomics are fond of quoting “Dornbusch’s Law.” 

It is not a rigorous statement and there are many versions with slightly different wording. One of the most concise is;

“Crises take longer to arrive than you can possibly imagine, but when they do come, they happen faster than you can possibly imagine”.

Dornbusch was certainly not thinking of the collision repair industry of 2021 when he wrote this, but it applies exactly. Those progressive operators who have been preparing for many years and are repairing cars properly now will not be taken by surprise.

Getting to Safe Repairs – Still No Leader

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In 2016, there was a 5-year time frame suggested for the changes needed in the industry to repair cars properly. If these changes were not made, there could very well be a real crisis in the industry.

At 2021, these changes have not been made, but the crisis has not yet arrived. This does not mean that the 2016 prediction was wrong—just that it was off by a year or two. So far we are still getting away with clean and shiny cars after a repair.

The consumer continues to be busy with all the other concerns in his or her life (in most cases of more immediate urgency) and as a result there has been minimal engagement on the part of the car-owning public. In this vacuum the major players in the repair industry are still continuing to compete and protect their own positions; they have not yet reached a significant level of collaboration.

It is starting to look like it will be the vehicle manufacturers who will take the lead in educating the vehicle owner about safe repairs. They are faced with at least three significant challenges:

  1. The obvious one is working with insurance companies to come to an understanding of safe repairs.
  2. The next is working with their dealers to send a unified message. The car dealer has a contract with the manufacturer and the objectives of the two parties in that contract are not the same.
  3. The third challenge is also a tough one. Too many of the vehicle manufacturers’ requirements appear to be driven by their marketing and legal departments rather than by safety. They are not providing a functional service if they present economically unrealistic procedures into their repair procedures and then wash their hands of any further responsibility.

Not Accepted Through To Accepted And Then To Expected

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It is the progressive operators who move the safety standards and integrity of industry forward, with a lot of effort and cost, and relatively little thanks. Perhaps not surprisingly these progressive operators are not the major national companies with hundreds of shops under their control. The active progressives may have several locations in one marker area or in some cases, be a well-run single location.

Money is a constant theme and the very large operators cannot afford to take a stand that will put them offside with their essential insurance company relationships. Just like no insurance company wants to be the first to raise rates, none of the large national chains wants to be the first to tell the insurance company that a new and more costly repair is required. They may know it is required and they will get to it when they need to (which will be at a point between Accepted and Expected), but they will not rock the boat at the Not Accepted phase.

An Intelligent, Researched Explanation

That operator with 300 locations cannot count on a strong local reputation in each of his locations, with that strong local reputation overcoming the significant hold that insurance companies have on their policy holders. There are also very few (zero?) national chains where a single owner can get stubborn and do the right thing because he can, knowing that it will have short-term costs.

An intelligent, researched explanation on why a procedure is needed, backed by a reputation for integrity and honesty will, with some repetition, move the procedure from Not Accepted toward Accepted. There is limited financial gain to that operator during the move toward Accepted. As time goes on, the direction taken is seen by the broader industry (including those paying, mostly insurance companies) as the correct one. With this understanding there is a general movement toward the better and more rigorous procedures, and they become Expected. There is some return here for the progressive operators, as the lessons learned in the early stages allow them to work efficiently with these procedures, which for them are not new.