Not many industries have experienced as much change in the last decade as the automotive industry.
The reality is that the vehicles we repair today are many times more complex than the technology NASA used to land on the moon. I would go so far as to say that we work in one of the most technology-based industries today. Vehicles are now equipped with multiple ADAS systems and are often built from alloys that did not exist ten years ago. To complicate things further, technicians and estimators are in short supply, and insurance companies are moving to virtual claims handling.
Quality repairs require more documentation, time, and investment than ever.
We all know things have changed tremendously in the last ten years, but what does that actually mean when it comes to our day-to-day operations? While every experience is unique, the most recent CCC Crash Course report has powerful insights into the changes that have impacted us all.
So what changes over the last decade stand out most?
We can start with the most obvious one: severity. Repairs are more expensive than ever. The average repair severity in 2011 was $2497.00. That number has jumped to $3718.00 as of 2021. This trend is accelerating - 2021 severity was 8.3% higher than in 2020. Though we are still in 2022, the combination of inflation, parts shortages, increased materials costs, and labor scarcity will almost certainly push the numbers higher.
Another change worth noting is that supplements are larger and more frequent.
In 2011, 46.9% of repairs had a supplement. In 2021, that number rose to 63.9%. As a percentage of the repair cost, supplements made up 10.7% of the total cost in 2011. By 2021 that number had increased to 22.6%. Parts costs as a percentage of the repair have stayed fairly constant, only increasing 2.4% over ten years, with each repair only requiring an average of 2.7 additional parts per repair.
So, if the supplements are increasing and more consistent, and parts pricing and use have stayed fairly flat, then shops must be doing great, right?
Well, not so fast. The average labor hours per job is only up, on average 2.8 hours per job. The average labor rate has only increased by $7.85 per hour since 2011, roughly 1-2% per year, a rate that is below the inflation rate. In fact, as a percentage of the total repair, labor fell from 42.8% of the total repair to 38.1% in 2021. Lastly, repair percentage has fallen by 7.3% since 2011. We are replacing more often and paid less to do it.
Returning to panel repair as the first choice of repair is one of the more powerful tools we have as an industry to improve profitability, service, and cycle time.
When we take on repair opportunities, we decrease our need for parts handling, lower our warranty footprint, and give the customer a less invasive repair. We get the car to paint faster, and subsequently, back to the customer faster. But to make repair the preferred operation again, we have to make the repair worthwhile for the shop to complete.
This is where the Dents.co damage measurement app can help!
Using LiDAR technology already built into your Apple devices, our app creates a 3D topographical map of the damaged area, provides a suggested repair time based on the substrate and any body lines, and provides all this data to you through detailed reports that are easily imported into your estimating system.
Schedule a live demo or start your free trial today by clicking the link below. Don’t write estimates the same way you did ten years ago. Upgrade your estimates with the Dents.co damage measurement system.