OKABA serves 50 members, including owners of collision repair companies as well as others associated with the industry. The group meets quarterly in Oklahoma City. “We were planning an educational seminar in the middle of this year, but the recent hail storm has put everything on hold until the work load settles down a bit,” says Leatherock, who began working at Hammer & Dolly in 1978, was a junior partner 1982–1995 and became full owner in 1995.
As yet, OKABA does not offer professional services to its members, Leatherock says, noting that to now it has been more of a fellowship group and a forum for members to express their concerns about business needs and industry conditions.
The group, however, has accomplished a number of goals during its short existence. For one, it has obtained an Oklahoma Insurance Commission opinion that paint material caps are an illegal policy benefit reduction, Leatherock notes.
OKABA has also helped to settle with the Oklahoma Tax Commission that body shops are tax exempt, making collections easier for shop owners. “We were able to obtain a blanket amnesty on sales tax collections prior to 2010,” Leatherock says, noting that till then repair shops had to pay sales tax twice on materials, first to the wholesaler and then were responsible for charging it again on all repairs and remitting the proceeds to the state.
Three industry issues are key for Shellem—issues which he hopes OKABA will take up, discuss and eventually resolve: price suppression by insurers, lack of honesty by adjustors, and assertions by some collision shops claiming quality but not delivering on promises. “We have all heard about the ‘Only One Club,’” he says. “I think the more honest every person involved in the industry is, the better things will be for all of us.”
For the Varners, Mickey and Shannon, of Jay’s Body Shop, a major issue for the association to begin to work on is clarity and consistency in labor rate surveys. “To my knowledge in Oklahoma, there are no set rules or guidelines for how the survey is conducted and who is eligible to be a part of that survey,” says Mickey Varner, an OKABA boardmember for two years.
“It is up to each individual insurer to determine the competitive rate for the market area using whatever method they choose to determine that rate. As a result, you can have 10–15 insurers coming up with three different rates for a particular area.”
Mickey and Shannon’s shop performs collision and mechanical repairs as well as service, including front-end alignments, brakes, tires, air-conditioning, as well as installing spray-in bedliners. The Varners also operate Car Rental Xpress & Auto Sales out of Jay’s Body Shop, where customers can rent cars while theirs are being repaired or because they want to take a trip or just buy new ones.
Varner recalls seeing someone setting up shop in an old warehouse to repair recent hail-damaged vehicles: “As it is right now, if you call yourself a ‘body shop’ and have a building to work out of, you qualify to be part of the survey. You are not required to have trained personnel, you are not required to have frame/unibody straightening or measuring capabilities.” He adds: “There are still shops repairing late-model vehicles with ‘rose-bud’ tipped torches, come-alongs and a tape measure.”
Leatherock notes that in Oklahoma, the insurance companies should survey shops in each market area every two years but, at least for the last 35 years, State Farm would call shops and compile results and the other carriers would follow its lead. About four to five years ago, State Farm stopped doing the survey and instructed shops to set up a profile on its B2B Web site and post rates there.
“This has created a Catch-22 in which DRP shops are afraid of being removed from the ‘program’ if they raise their rates, and other shops don’t change anything because it hasn’t been done any differently in their professional lifetimes,” Leatherock says. “The insurance companies could not create a better way to stop rate increases if they tried.”
Leatherock says that body shops in Oklahoma charge half as much for an hour of labor as mechanic shops: “This clearly shows that the basis of all price negotiations in the body shop industry in Oklahoma are based on a lie. What is the price for a real hour of labor? OKABA believes car owners, insurers and body shops deserve an honest answer.”
Varner adds: “What I’d like to see is less manipulation of the databases, which can shortchange the consumer and the shop. In the end, I just want to be paid for what I do—no more, no less.”
To join OKABA contact:
Tel: (405) 751-1337