Seven years ago, Matthew and Marcia Seebachan won a $42 million lawsuit against John Eagle Collision Center for the incorrect repair of their 2010 Honda Fit, which left them injured and trapped inside their burning car after a subsequent collision. Fast forward to 2024, and an estimated 75% of calibrations are being missed, according to industry reports, leading to incorrect repairs.
The Collision Industry Conference (CIC) Industry Relations Committee conducted a study in 2023 to determine why there are still poorly repaired vehicles on the road. The committee obtained 26 examples of collision repair center post repair inspections from body shops in the East, Midwest and Western U.S. The study, based on the results of 26 late model vehicles (2013-2022 model years), found more than 90% were totaled after substandard repairs were found.
Following the study, a Guild 21 Webinar was held in May to discuss what can be done to elevate the industry and ensure cars are fixed properly. The webinar was sponsored by OEC and hosted by George Avery, Holly Switzer-Pitts and Micki Woods.
Elizabeth Stein, vice president of Strategic Initiatives for Certified Collision Group (CCG), led the panel discussion, “How to Ensure Your Collision Repair Business Has a Future.” Panelists included Jeff Butler, president of Haury’s Collision & Vintage in Seattle, WA; Ron Reichen, founder of Precision Body & Paint, Inc. in Oregon; and Erin Solis, senior vice president of Square One Systems/Coyote Vision Group.
“There is no excuse for it [poor repairs] anymore, but it still goes on constantly,” said Reichen.
He attributes substandard repairs to body shops shortcutting the process and failing to look up OEM repair procedures.
In the John Eagle Collision case, Reichen said outside pressure from the bill payer reduced the original repair plan and had the shop seek alternative methods to repair the customer’s vehicle so the shop could make a profit.
“To maintain profit margin, the repairer decided to deviate from OEM factory procedures and repair that car in a non-approved repair procedure to make the job profitable,” he said. “Unfortunately, what it did is put the current vehicle owner, as well as the secondary owners -- the people injured -- in harm's way because they put profits over the safety of the consumers.”
In every industry, Reichen said, there are unscrupulous people driven by profits.
“There has to be accountability and consequences,” he emphasized. “The John Eagle case certainly proved that there were significant consequences. It’s important that the industry learn from this and address the problem.”
During the Guild 21 webinar, panelists talked about the importance of understanding state laws, building credibility with clients and bill payers, focusing on a proper repair, promoting a healthy working environment and ensuring a future for staff.
Know Your State Law
Stein pointed out many shops are unfamiliar with state laws and could be in violation.
Butler, former director of the Washington Independent Collision Repairer’s Association (WICRA), has found shops often don’t follow the state auto repair rules or ask customers for approval on repairs.
“That is problematic and leaves a repair facility exposed,” he noted. “If you're not following the state laws, you're opening up your repair facility to a significant amount of liability.”
He shared the example of Washington’s Auto Repair Act, which requires the 10% rule. Under the rule, a facility cannot charge a customer more than 10% of the written estimate without the consumer’s consent.
Even if charges seem reasonable and necessary, Butler said, if you don’t get approval from vehicle owners, you are taking away their choice and violating the act. Butler advises shop owners to learn about the Auto Repair Act in their state, which is typically on the attorney general’s website.
Building Relationships with Clients and Third Parties
Butler talked about the communication breakdown that can occur during the negotiation process with clients and third parties and shared how the industry can proactively address this challenge.
Over his career as both a shop owner and private adjuster, Butler has witnessed the industry from different perspectives. If there's a disagreement in the amount of the loss, or repair costs, Butler said the consumer generally has recourse.
“Shops lose focus on how they run their business and don't focus on trust and transparency,” he noted. “Showing your customer and the insurer what's needed and why certain repairs are needed really helps facilitate that.”
Solis agreed. As a previous insurance adjuster, she recalled times when she asked shops to show documentation and explain the repair.
Butler cautions shops to stop acting like they are the adjuster for the vehicle owner. Instead, he recommended educating customers on the circumstances of the repair and why the shop is the vehicle repair expert.
One of the most fundamental flaws John Eagle Collision Center made in handling its customer's vehicle repairs and insurance claim, according to Butler, is not disclosing the payment shortage from the insurer to the vehicle owner and giving them a choice for how they wanted to address the shortfall.
“That's just fundamentally wrong and repairers have to stop doing that,” he said.
At Haury’s, staff members educate customers about vehicle damage, the repair plan, and the procedures required by the auto manufacturer, and keeps them updated throughout the process.
“Our industry will gain a lot more credibility if we're upfront and honest about what the costs are, what we're doing and back it up with facts,” Butler said.
“As analysts of the damage, we don't determine the cost,” said Reichen. “The vehicle damage determines the cost. If we are following all the procedures, the bottom line is the bottom line.”
Reichen emphasized a shop’s contract is with the vehicle owner, not the insurance company, and it’s the business’s responsibility to provide the necessary information to consumers.
Similar to a medical bill, Reichen advises shops to include everything on the repair plan.
“If you've been transparent and written a repair plan backed up by OEM repair procedures using factory equipment with trained people, and you've done a good job of communicating that with the vehicle owner, they can advocate at the end of the day that you're repairing the car for them and not repairing it for the bill payer,” he said.
“Friction is not necessary if there is good communication and transparency,” added Reichen.
Focusing on a Proper Repair to Avoid Liability
Solis discussed what shop owners and managers should know about ensuring a proper repair and liability exposure.
First and foremost, she said collision repairers need to access the OEM repair information.
Reichen agreed about the importance of looking up repair procedures every time because they change, often overnight.
Solis also stressed the importance of documenting repairs.
For example, she said destructive weld tests should be performed on every car and need to be photographed to demonstrate that the welds were done correctly.
“Documentation is going to be the key to limiting liability,” she noted.
Ensuring technicians are properly trained is also critical.
“If you are certified in a specific brand, you want to make sure that the technician who went to training and carries that certification is the one repairing the vehicle and using the proper equipment,” Solis explained.
Promoting a Healthy Working Environment
Butler and Reichen shared examples of how they have elevated their businesses and promoted a healthy working environment.
“My philosophy in business is simple,” said Butler. “Employees first, customers second, and shareholders third. If my employees are happy and engaged and think a lot about the company they work for, they're going to take care of customers.”
In a typical body shop, Butler said the day starts with the phones ringing, customers walking in the door while technicians are coming in, or there is a parts issue, and then an adjuster just shows up for an inspection.
“It’s 2:30 before you know it, and you just ran around all day with your hair on fire,” he said. “If you’re in chaos all the time, it’s non-functional.”
To maximize time, Haury’s began scheduling repairs rather than accepting walk-ins. The facility also shifted to a four-day workweek.
“Our people deserve a break, and everyone functions better when they have a schedule and can rest and decompress,” he said.
Haury’s has made it a priority to enhance communication with customers and third parties. Terms and conditions are provided at the beginning of the repair, so everyone knows what to expect. This includes information about supplements and storage fees.
“It's appropriate, professional, ethical and the law to let the parties know what the charges are,” Butler emphasized.
“A lot of times, the customer is thrown in the middle,” noted Stein. “It's already a traumatic experience and it's nice to have [the terms and conditions] up front.”
Reichen talked about the consultive approach used at Precision.
“In every industry, whether you're getting your hair or nails done or hiring home maintenance, you schedule an appointment,” he noted. “Our industry really needs to transition to do the same.”
Reichen said it was common at his facility for five or six clients to arrive at the same time for an estimate. To address this challenge, Precision now arranges repair consultations with customers that take about an hour and 45 minutes. This provides the opportunity to explain the repair process and what the manufacturer requires. Customers pay an upfront fee that is applied to the work order.
Reichen has found this strategy has alleviated the tire kickers looking to cash out. It can also lead to additional work.
In addition to operating 8 a.m. to 5 p.m. during the weekday, Precision is open on Saturdays.
“We’re very respectful of employees and work-life balance so we rotate shifts,” said Reichen. “We also are committed to making sure that that vehicle gets delivered in the time frame we've suggested.”
Best Practices for the Future
Solis shared some best practices she has seen when visiting shops across the country, one of which is continuous training.
With vehicles changing so quickly, Solis said it’s unrealistic only to get trained yearly.
“The shops I've seen that are really doing the best are the ones constantly training their technicians, repair planners and office staff,” she said.
She also recommends paying close attention to clearly defined communication.
“You can't just put a standard operating procedure (SOP) together and then hand it out to everybody,” she explained. “It has to be something that you walk through on a regular basis and do an internal audit to ensure that the process is actually happening, especially if you have more than one location.”
Solis said business owners often take training classes to become certified but aren’t the ones working on vehicles. Instead, she recommends they support employees in their training and share their vision for the business so staff can carry it out.
Although Reichen said education is a necessity, a quality control process should follow. At Precision, this occurs after each phase of the operation.
“What's critically important is the person doing the quality control test is not the person who did the repair,” he advised.
Stein agreed about how critical it is to send staff to outside training to provide the opportunity to interact with others in the industry.
Looking ahead, Butler recommended the industry focus on building attractive businesses for future workers. This includes running profitable companies with competitive wages and benefits.
“When we have a vibrant, successful business and our team members are engaged and happy, you're going to be able to take care of your customer,” he said. “Shareholders benefit from that.”
“Just do what’s right,” Solis recommended. “Sometimes, that can be acknowledging that maybe you don't have the answer.”
Solis said it’s time to recognize that vehicles are not the same as 20 or 30 years ago, or even five years ago.
“It's OK to decline a repair whether it’s because the vehicle isn’t in your wheelhouse or made of substrates you aren’t set up for or it’s a brand you are not qualified to repair,” Reichen acknowledged. “People will respect that.”
He advised shops to break out of their comfort zone.
“There's so much knowledge out there,” he said. “Don’t get your information from one source.”
He encouraged repairers to “get “involved, stay involved and participate.” This includes becoming active with state and national associations, seeking out mentors and expanding their sphere of influence by talking to repairers they value, which may include competitors in their market.
Reichen also recommends joining a Twenty Group.
“Those are great organizations to be part of, make you accountable and allow you to expand your knowledge base,” he said.
Stein added the benefit of attending conferences and meetings like CIC, SCRS and WIN to expand business practices and build connections.
She shared a quote from Tony Gaskins: “Trust the process. Your time is coming. Just do the work and the results will handle themselves.”
“Just get started,” she said. “You don't have to be perfect. We've all failed, so do something different than what you're doing today.”
Stacey Phillips Ronak