The Washington Metropolitan Auto Body Association (WMABA) has announced that the results of its 2012 labor rate survey.
The survey was conducted to determine a more equitable labor rate since, according to WMABA Executive Director Jordan Hendler, some areas around DC haven’t seen a rate increase in five-plus years.
“So many of our members tell us that they’re very rarely, if ever, surveyed by any insurer,” says Hendler. “When they attempt to tell the carrier their new rates, they’re often stonewalled or referred to another manager. In many cases, the shop is told that their rates aren’t competitive, and [the insurer] will have to inform all of their customers not to go to that shop or risk paying the difference. This type of threat seems to be the unnecessary approach that most insurers take with any labor rate request or needed repair procedure.”
Results for average body labor rate were: Baltimore: $43.64; Annapolis: $43.51; Hagerstown: $43.59; Washington DC: $43.35; Virginia Beach: $44.4; Charlottesville: $44.28; Richmond: $45.34; Roanoake: $43.34
In addition to showcasing posted labor rates throughout the WMABA region, the project uncovered a surprisingly small number of shops that actually utilize paint and material (P&M) cost accounting programs.
“I think mostly it’s a lack of understanding or going against the norm,” said WMABA President Barry Dorn. “I know that many insurers do not and will not recognize [a cost accounting program]. The old method of using a multiplier as a method of reimbursement is antiquated at best. Petroleum prices, and thus paint prices, continue to escalate; for some reason, the rates do not. The calculators take all arguments away from everyone. They’re accurate and something this industry needs to embrace.”
According to WMABA, hundreds of shops participated in the labor rate survey process, although many didn’t, something that Dorn doesn’t understand.
“I don’t understand the logic behind their decision,” Dorn says. “Without this survey, you’re forced to ‘go it alone,’ balance bill the customer or complain to anyone who will listen – none of which is a solution. I don’t remember the last time a carrier surveyed me. Your association did this to get a real, factual and third-party perspective rather than hearsay.”