Report Puts Consumers on High Alert Over Unethical Body Shops: BodyShop Business - The Body Shop Reference

We happen to have the experience of watching how and why this occurs. As a 25 plus year veteran in the industry, I watched the insurance companies develop a a strangle hold on the industry to keep down labor rates. When I started, Mechanical labor and body labor were identical; $18 per labor hour. In an effort to increase their margins, insurance companies set out to control the collision repair labor rates through pressure and steering, now mechanical labor is pushing $90 and collision hovering around $44, less then half. It's no wonder college graduates aren't coming fresh out of collage excited about opening a body shop.
If the insurance companies would let the body shops set their own rate - correction; if they would pay the rate the body shop set. We would get a higher educated shop owner who would not feel the need to short cut the system to accommodate what the insurance company say's they are willing to pay. The insurance companies base their labor rate on a high volume shop they have contracts with and then only offer and Independent's the same labor rate based on a different business model and cost structure.
Until the insurance companies lighten up on the industry, this situation will continue to get worse and while they squeeze the industry with their right fist, they point the finger of blame with their left.
Report Puts Consumers on High Alert Over Unethical Body Shops: BodyShop Business - The Body Shop Reference

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