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Tampa, FL, Med Clinic Owner Charged with Staging Crashes and $970,000 in False Claims The owner of a Tampa, FL, medical clinic has been charged in a scheme that staged auto accidents then submitted more than $970,000 in falsified insurance claims, Florida authorities said.
Angela Ippolito Duncan, owner of Ybor Medical and Wellness Center, was booked into the Hillsborough County jail on July 6 on multiple fraud and racketeering charges. Florida’s chief financial officer said an investigation found Duncan helped orchestrate staged crashes near the clinic, then coached participants on what to say to insurance adjusters. Duncan, 72, also had crash participants sign some 30 medical forms for treatments that never hapSee Staging Crashes, Page 29
A Deeper Look at Crash Champions’ Merger with Service King by David Roberts, managing director of Focus Advisors
After months of speculation about the future of Service King, a blockbuster merger with Crash Champi-
ons was announced to Service King managers on July 15. The two consolidators will merge and create a 550+ shop operation with upwards of $2 billion in annualized sales.
See Crash Champions to Mergee, Page 26
Vol. 13 / Issue 6 / August 2022
Georgia’s Gas Tax Holiday Extended Through Mid-August by T.A. DeFeo, The Center Square
Georgia Gov. Brian Kemp signed an executive order to suspend the state’s excise tax on motor fuel sales through mid-August. The order, signed July 1, also suspends the collection of the state sales tax on locomotive fuel. The governor also renewed an executive order for Supply Chain Disruptions. Both orders run through Aug. 13. “To provide actual relief to Georgians, I am once again extending the supply chain state of emergency and suspending our state mo-
tor fuel tax,” Kemp, a Republican, said in a statement. “In addition to these actions, I am suspending the
locomotive fuel tax to help fight rising costs that are being passed on to See Gas Tax Holiday, Page 30
The World Experienced a Pandemic—and Initial Vehicle Quality Got Sick In the wake of the COVID-19 pandemic, initial vehicle quality notably declined, according to the J.D. Power 2022 U.S. Initial Quality Study, released June 28.
Buick was the highest-ranking brand in J.D. Power’s 2022 U.S. Initial Quality Study and the Buick Encore GX, shown here, ranked the highest in its segment.
The disruptions caused by the pandemic—supply chain issues, record-high vehicle prices and personnel dislocations---contributed to vehicle problems reaching a record high in the 36-year history of this benchmark study. Compared with 2021 results, the industry experienced an 11% increase in problems per 100 vehicles (PP100), which is 18 PP100 worse than last year, resulting in an industry average of 180 PP100. A lower score reflects higher vehicle quality.
General Motors bucked the trend with an improvement in initial quality that landed it in the highest rank position among automotive corporations. Among brands, Buick’s quality improved 17 PP100 year over year, vaulting it to ranking highest overall in 2022 from 12th place in 2021, while Genesis ranked highest among premium brands. Just nine of 33 ranked brands improved in vehicle quality year over year. “Given the many challenges automakers and their dealers had to face in the past year, it’s somewhat surprising that initial quality didn’t fall even more dramatically,” said David Amodeo, director of global automotive at J.D. Power. “In general, initial quality has shown steady improvement throughout the history of this study, so the decline this year is disappointing—yet understandable. Automakers continue to launch vehicles that are more and more technologically complex in an era in which there have been many shortages of critical components to support them.” See Initial Vehicle Quality, Page 18
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Carolinas Collision Centers Opens New Location in Chapel Hill, NC ���������������������������� 8 Driven Brands Acquires K&K Glass in Florida ���� 6 Florida Repair Shop Must Pay $72,000 in Overtime Wages to Employees ��������������������� 8 Georgia’s Gas Tax Holiday Extended Through Mid-August ��������������������������������������������������� 1 Mercury Insurance Launches MercuryGO for Virginia Drivers ���������������������������������������� 6 Myrtle Beach First Responders Learn New
Need to Prepare �������������������������������������������� 4 Classic Collision Announces Acquisitions in Texas, South Carolina ������������������������������ 39 Collision Repairers Actually Lament Lack of Insurance Adjusters in Shops ������������������ 47 Cox Automotive Lowers Full-Year New-Vehicle Sales Forecast as Supply Problems Persist � 22 Despite Increase in Demand, Gas Prices Keep Falling ������������������������������������������������� 22 GM Has 95,000 Incomplete Vehicles Just Sitting ��������������������������������������������������������� 11
Rescue Skills Through NABC F.R.E.E.™
I-CAR Offers EV Skills Course �������������������������� 40
Program �������������������������������������������������������� 8
Life Coach Uses Different Approaches to
North Carolina SkillsUSA Winner Reflects on FTCC Education, Prepares for Nationals ������ 12
Help Auto Body Shop Techs, Owners, Managers ���������������������������������������������������� 38
Tampa, FL, Med Clinic Owner Charged
Lordstown Motors Continues Executive
with Staging Crashes and $970,000
Shakeup, Working Toward Endurance
in False Claims ���������������������������������������������� 1
Production ��������������������������������������������������� 26 Massachusetts Auto Body Shops Fight for
COLUMNISTS Anderson - Collision Repair Shops Play Vital Role in Helping Reduce Vehicle-Related Deaths ��������������������������������������������������������� 28 Yoswick - 3 Collision Repair Business Leaders Find Ways to Develop Positive Company Culture �������������������������������������������������������� 30 Yoswick - DataTouch Offering New Service to Help Collision Repair Shops Manage Access to its Data ��������������������������������������� 37 Yoswick - What Your Auto Body Shop Needs to Know to Be Ready to Repair Evs ������������� 40
Better Reimbursement Rates ���������������������� 20 Monthly Car Payments Are Soaring ���������������� 46 New-Vehicle Prices Set Record in June as Luxury Share Hits New High ����������������������� 47
to Use Parking Brakes ��������������������������������� 16 Nissan Pathfinder Hood Latch Recall
Non-Tesla Supercharger Pilot Launch Expected Late 2022: White House �������������� 14
Into a $1,000+ Monthly Payment in June �� 14
A Deeper Look at Crash Champions’ Merger
Southeast Collision Conference Brings Together
Cities in the U.S. ����������������������������������������� 16 ASE Education Foundation Establishes Network ����������������������������������������������������� 11 CAA Says a New Kind of Insurer Steering is Impacting the Industry ���������������������������� 34 CIECAST Explores What’s Driving EV Adoption and How Collision Repairers
Accudraft Paint Booths ���������������������������������� 48
Honda-Acura Wholesale Parts Dealers � 23, 24-25
asTech/Driven by Repairify ����������������������������� 14
Hyundai Wholesale Parts Dealers ������������������ 45
Audi Gwinnett ������������������������������������������������ 20
Industrial Finishes and Systems ��������������������� 17
Audi Wholesale Parts Dealers ������������������������ 39
Kia Motors Wholesale Parts Dealers �������������� 41
Auto Data Labels ���������������������������������������������� 2
Malco Products, SBC ������������������������������������� 19
AutoNation Ford-Lincoln �������������������������������� 28
Mazda Wholesale Parts Dealers ��������������������� 42
Axalta Coating Systems ��������������������������������� 11
Mercedes-Benz Wholesale Parts Dealers ������� 42
Beaman CDJR Wholesale Parts ��������������������� 21
Miami Lakes Automall ������������������������������������ 10
Benchmark Automotive ��������������������������������� 16
MINI of Charleston ����������������������������������������� 30
Certified Automotive Parts Association ���������� 12
MOPAR Wholesale Parts Dealers ������������������� 31
City Kia of Greater Orlando ����������������������������� 32
NOROO Paint & Coatings �������������������������������� 15
Classifieds ������������������������������������������������������ 46
Parks Chevrolet ���������������������������������������������� 22
Dale Earnhardt Jr. Chevrolet ��������������������������� 34
PPG ������������������������������������������������������������������ 9
Equalizer Auto Glass Tools ������������������������������� 8
Rick Hendrick Chevrolet Naples ��������������������� 30
Ford Wholesale Parts Dealers ������������������������ 45
Rogers-Dabbs Chevrolet ��������������������������������� 27
GM Wholesale Parts Dealers ������������������������� 37
SATA Dan-Am Company ��������������������������������� 7
Gus Machado Ford ����������������������������������������� 35
Sorbothane Soft-Blow Mallet ��������������������������� 6
Harper Volkswagen ���������������������������������������� 29
Spanesi Americas ������������������������������������������ 13
Hendrick Automotive Group ��������������������������� 33
Stivers Decatur Subaru ���������������������������������� 26
Hendrick Honda Pompano Beach ������������������� 34
Subaru Wholesale Parts Dealers �������������������� 43
Hendrick Kia Cary ������������������������������������������� 18
Tameron Hyundai ������������������������������������������� 36
Hendrick Kia Concord ������������������������������������� 18
Volkswagen Wholesale Parts Dealers ������������ 40
Hendrick Volvo Cars of Charleston ����������������� 32
Wrenchers ������������������������������������������������������� 5
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Record Share of New-Car Shoppers Jumped
Repairify Acquires ATG ����������������������������������� 32
and Baton Rouge Are the Worst Driving
Serving Florida, Georgia, Alabama, Mississippi, Virginia, West Virginia, Tennessee, North Carolina, South Carolina and adjacent metro areas. Autobody News is a monthly publication for the autobody industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2022 Adamantine Media LLC.
Follows Investigation ���������������������������������� 10
with Service King ������������������������������������������ 1
Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: John Yoswick, Janet Chaney, Toby Chess, Ed Attanasio, Stacey Phillips Advertising Sales: Joe Momber, Norman Morano, (800) 699-8251 Office Manager: Louise Tedesco Digital Marketing Manager: Bryan Malinski Art Director: Rodolfo Garcia Graphic Designer: Vicki Sitarz Senior Editor: Abby Andrews Accounting Manager: Heather Priddy Permissions Editor: Randi Scholtes Office Assistant: Dianne Pray
Nissan Frontier and Titan Owners Warned
Register for ASE Summer Certification �������������� 4
Annual Report Says Bakersfield, Sacramento
INDEX OF ADVERTISERS
3 State Associations, Industry Speakers ����� 43 Tesla, Hertz Help Uber Drivers Save Money with 15K EV Rentals ������������������������������������ 32 Teslas Get Updated Seat Belt Functions in New Update ������������������������������������������������ 19 The World Experienced a Pandemic—and Initial Vehicle Quality Got Sick ����������������������� 1 U.S. Economy Has 11.3 Million Unfilled Jobs �� 36 Why Online Customer Reviews Are More Important than Ever ������������������������������������ 42
autobodynews.com / AUGUST 2022 AUTOBODY NEWS 3
CIECAST Explores What’s Driving EV Adoption and How Collision Repairers Need to Prepare by Abby Andrews
CIECA hosted its latest CIECAST webinar on June 23, “Charged for Success: Understanding EV Trends and Their Impact.” Ryan Mandell, director of claims performance for Mitchell International, spoke about the trends in electric vehicle adoption and what is driving them, how EVs should be handled differently in a repair facility than their gas-powered counterparts, and what needs to be done to facilitate better, safer repairs. “This is a critical topic for collision repair and the industry as a whole,” Mandell said. Mandell said the last couple of years have been tough on new vehicles sales overall, due to parts shortages and supply chain issues—except for EV sales, which have been a bright spot. Gross volumes of EV sales grew 5% at the same time total vehicle sales decreased 15%, Mandell said. Bloomberg recently projected worldwide EV sales to grow from 6.6 million in 2021 to 21 million in 2025. “People are very bullish on EVs,” he said. Mandell said charging infrastructure is growing but has a long way to go. DC Fast Chargers—which will be key to making long-distance traveling feasible, as they can charge a battery to 80% in about a half hour—increased in the U.S. by 24% in 2021. Batteries are also improving to increase range and decrease “range anxiety” among drivers, Mandell said. The battery is 35% to 50% of the total cost to build an EV, so as mining for components becomes more efficient, it will drive down what consumers have to pay for an EV. However, the recent increasing prices for many of the metals that go into batteries, including nickel, lithium and cobalt, will offset some of those mining efficiency gains, Mandell said. “I think it will be closer to the end of the decade before we see price parity between EVs and ICE
vehicles,” Mandell said. As more EVs are sold, EVs will constitute a greater share of repairable claims coming into shops. They still make up less than 1% of claims, Mandell said, but that will continue to grow at an increasing rate. Repairers need to be ready, he said.
termarket tool can scan them. EVs also use a lot more lightweight materials, like aluminum and carbon fiber, for major component sheet metal parts to offset the heavy batteries, Mandell said. Those materials will respond differently in an accident, which will create the need for a new process to decide what can be repaired or has
“An EV is not just an electrified variant of an ICE,” Mandell said. “It really is completely different, and needs to be treated as such.” EVs have nearly double the number of semiconductors of an ICE vehicle, and a greater reliance on high-voltage batteries, which add to the complexity of repairs. “There are extra components (on an EV) and the systems are more interconnected,” Mandell said. Based on model year 2015 vehicles and newer only, the average ICE vehicle has 8.7 fault codes per scan, while an EV averages 13.8. Estimate lines also increase— the average ICE vehicle’s estimate has 35.5 lines, while the average EV’s has 47.7. “It shows how interconnected the systems are,” Mandell said. “EVs rely on more semiconductors, more digital systems, more advanced electronics to do the same tasks as mechanical systems in ICE vehicles.” A front impact on an EV has a far greater likelihood of affecting other systems throughout the vehicle, he said. Mandell noted the scan data he presented excludes Teslas, as no af-
to be replaced, and will need new tools. EVs also have significantly longer cycle times, Mandell said— on average, keys-to-keys for a drivable claim takes 8.4 days, compared to 6.9 days for an ICE vehicle. Mandell said there are new precautions that must be taken to avoid damaging the battery and keep everyone safe during the repair. “There are precautions that need to take place even before a basic teardown,” he said. Also, the battery has to be removed before going to the paint booth, due to the heat involved, which adds two
4 AUGUST 2022 AUTOBODY NEWS / autobodynews.com
hours to the process. Mandell said it will be important to set appropriate expectations for the vehicle owner from the start. “This is likely most owners’ first experience repairing an EV,” he said. “You will have to help them understand why the repair process is so different from an ICE. Have a very honest discussion at the beginning about additional steps that need to be taken to repair it safely. I think that really sets up the overall outcome to be a positive one.” Mandell said he thinks estimates for EVs need to evolve, rather than just using the same template as for an ICE vehicle. “We need to make sure it’s built in a way to facilitate a safe and proper repair, and is efficient as well,” Mandell said. He suggested adding EV-specific categories that address the completely different chassis, and adding “EV” as a separate vehicle type, as it’s not only important to note if the vehicle is a truck, van or car. He also suggested creating new EV specific templates and qualifiers, like battery capacity. “EVs overall are becoming more widespread,” Mandell said. “There are 84 EV models in the U.S. now; there were 14 just five years ago. We are going to see the tech improve as well. Rising fuel prices will also be a tailwind for EV adoption.” Watch the full CIECAST on cieca. com.
Register for ASE Summer Certification The National Institute for Automotive Service Excellence (ASE) summer registration period is now open. More than 50 ASE certification tests covering nearly every aspect of the motor vehicle service and repair industry are available for ASE certification. Those automotive service professionals registering by Sept. 30 will have 90 days to schedule an appointment to take the selected ASE tests, whether registering on the first day of the registration period
or the last. ASE testing is available throughout the year and is conducted days, nights and weekends at nearly 450 secured, proctored test centers. To register, visit ASE.com, click on register and sign in. Once logged in, users can next click on “orders” and then “store,” where they can find the tests they want to take, add those tests to the cart, check out and complete registration. Source: ASE
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Mercury Insurance Launches MercuryGO for Virginia Drivers Mercury Insurance on July 8 announced it has made its usage-based insurance app, MercuryGO, available to drivers in Virginia to help improve driving skills and traffic safety. The app acts as a virtual driving coach, providing skill scores that give real-time feedback about driving behavior. Mercury auto insurance policyholders who enroll to use the app immediately receive a 5% participation discount and teen drivers will receive up to a 10% discount. Then, when MercuryGO customers renew their policies, they could receive a discount of up to 40%, depending upon their driving score. “Mercury Insurance wants to leverage technology to make driving safer, and we also want to reward drivers for being cautious behind the wheel,” said Mercury Insurance Director of Product Management Mike Dawdy. “MercuryGO is an intuitive and easy-to-use app that helps you stay safe in the driver’s seat and it puts money back in your bank account.” The Virginia Department of
Transportation reports there were 967 motor vehicle traffic fatalities and 161 injuries a day on Virginia roadways in 2021. The MercuryGO app generates a driving skill score, which is calculated based on categories that are closely correlated with car crashes:
excessive speeding, hard braking, distracted driving (i.e., phone motion and screen interaction) and road type. Cambridge Mobile Telematics (CMT), Mercury’s technology partner, is the world’s largest smartphone telematics provider, winning multiple awards. CMT is the pioneer of usage-based insurance with smartphones (in 2012), the measurement of phone distraction (2013), behavior-based insurance
Driven Brands Acquires K&K Glass in Florida Driven Brands Holdings Inc., North America’s largest automotive services company, announced the continued expansion of its auto glass offering in the U.S. with the acquisition of leading Florida-based K&K Glass. Driven Brands’ fifth U.S. automotive glass acquisition will be reported in its paint, collision and glass segment. “We were proud to kickstart our entry into the U.S. automotive glass market with the acquisition of Auto Glass Now,” said Michael Macaluso, EVP and paint, collision and glass group president, Driven Brands. “Since then, we’ve added All Star Glass, A1 Auto Glass and Perfection Auto Glass, in addition to building new locations in North Carolina and Texas. We remain highly acquisitive in this segment as we look to support the needs of our customers in this extremely fragmented industry. It’s an exciting time to join our Driven Brands family and we are
thrilled to now welcome K&K Glass.” K&K Auto Glass was opened in 1994 by Dan Knowlton. With the support of his family, he was able to grow the business to be a leading Florida automotive glass retailer. With seven locations, more than 20 warehouses and more than 100 mobile vans, K&K Glass can reach customers throughout the state. “We have come a long way over the past 28 years, and it would not have been possible without the support of our community and outstanding team,” said Knowlton. “We are grateful that Driven Brands can continue our legacy and help both our employees and the business realize its full potential.” Driven Brands first entered the glass business in Canada with the acquisition of Uniban Canada in 2019 and now has more than 350 locations across North America. Source: Driven Brands
(2014) and real-time crash alerts with roadside assistance (2015). “Mercury Insurance is utilizing the DriveWell platform to help drivers reduce distracted driving, speeding, and hard braking by keeping them engaged and providing timely feedback,” said Ryan McMahon, CMT’s vice president of insurance and government affairs. “MercuryGO will help make Virginia roads safer and has the potential to reduce the number of car collisions, injuries and fatalities.” CMT’s research shows 37% of all car trips in the U.S. in 2019 involved significant driver phone distraction; between 7 a.m. and 7 p.m., that figure rises to 41% of all U.S. car trips. MercuryGO will help solve that problem by using technology that has reduced distracted driving by 29%, speeding by 45% and hard braking by 17%. MercuryGO provides useful in-app tips to help users become safer drivers. Added benefits in-
clude: A sharing option for families, which allows all participating drivers to see who is the safest. The ability for parents to receive real-time feedback about their teen’s driving behavior, including when, where and how fast they’re traveling. Licensed teen drivers, 18 years and younger, who are registered for MercuryGO will instantly receive a 10% participation discount on auto insurance. The opportunity to earn up to a 40% discount at renewal. “It’s important to remember that driving is a privilege and one that shouldn’t be taken lightly,” said Dawdy. “Drivers of all skill levels can benefit from the MercuryGO, while also putting money back in their pockets.” Currently, MercuryGO is available to Arizona, Florida, Georgia, New Jersey, Oklahoma and Texas drivers. Visit www.mercuryinsurance.com/GO or contact a local Mercury Insurance agent to enroll. Source: Mercury Insurance
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Myrtle Beach First Responders Learn New Rescue Skills Through NABC F.R.E.E.™ Program
Florida Repair Shop Must Pay $72,000 in Overtime Wages to Employees
More than 20 first responders from Myrtle Beach, SC, fire departments and surrounding areas gathered recently for a hands-on demonstration of the latest techniques in emergency vehicle extrication, preparing them to provide the best response for car accident victims, thanks to the National Auto Body Council (NABC)® F.R.E.E.™ program, CARSTAR Myrtle Beach, USAA Insurance and Genesis Rescue Systems.
A&G Auto Service and Repair Inc., operating as Magic Wheels Auto World Inc., in Brooksville, FL, must pay 12 employees a total of $72,174 for back overtime, the U.S. Dept. of Labor’s Wage and Hour Division announced. Investigators found A&G Auto Service and Repair Inc. paid a salary for all hours employees worked and did not pay the required half-time for overtime hours worked. The employer also misapplied overtime exemptions for two supervisors who failed to meet the criteria for an exemption. Additionally, the division found the employer misclassified three individuals as independent contractors and paid them on a salary basis as well, failing to pay them for overtime hours worked, all Fair Labor Standards Act violations. “As employers struggle to find the people they need to operate their businesses successfully, retaining and recruiting workers will be more difficult for employ-
When drivers in Myrtle Beach and surrounding areas have an accident, they rely on the community’s first responders to be there to help them to safety. And when they are driving a late-model vehicle with numerous airbags, advanced technology or electric/hybrid engines, the rescue can be more challenging. The NABC First Responder Emergency Extrication program
helps first responders stay abreast of the rapid changes in vehicle design, including high-strength steel, airbags, advanced restraint systems and onboard technology. Alternative fuel systems found in electric and hybrid vehicles present new challenges for first responders on the accident scene. CARSTAR Myrtle Beach, at 1560 Highway 501, hosted first responders at a special NABC F.R.E.E. instruction program June 4 to help ensure Myrtle Beach drivers have the best prepared response in case of an accident. “USAA and NABC have given first responders amazing training they will only get in the field under pressure to save lives,” said Ken Depper, owner of CARSTAR Myrtle Beach. “This training will give first responders the tools to save lives on the frontlines.” USAA Insurance provided the vehicles, and Genesis Rescue Systems supplied the classroom education and extrication demonstration. Source: NABC
Carolinas Collision Centers Opens New Location in Chapel Hill, NC Carolinas Collision Centers announced the opening of its collision repair center, located at 1705 Legion Road in Chapel Hill, NC. The new facility is located two miles south of I-40 just off Fordham Boulevard (US 15-501) near the University of North Carolina.
“We are honored to now be able to better service the collision repair needs of Chapel Hill, Carrboro, Orange County and surrounding areas,” said Jay Jackson, director of business development for Carolinas Collision Centers. “To my knowledge, we are the only collision repair provider conveniently located within the city limits of
Chapel Hill. We feel fortunate to be able to bring high quality collision repairs to a community that previously had to travel a good distance to find.” Carolinas Collision Centers is one of the largest I-CAR Gold Class Certified collision repair providers in the Carolinas. After opening its doors just three years ago, it currently operates 16 locations throughout North and South Carolina. Carolinas Collision Centers works with all insurance companies and backs all repairs with a limited lifetime guarantee, providing customers with the best service and experience possible. Source: Centers
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ers who violate workers’ rights to be paid their full wages and benefits,” said Wage and Hour Division District Director Nicolas Ratmiroff in Tampa, FL. “In fiscal year 2021, the division recovered more than $4.3 million in back wages for more than 3,500 workers in the auto repair industry, where we too often find employers in violation of the law,” Ratmiroff said. “We encourage others to review their pay practices or risk losing the workers they need to keep their shops running.” Employers can contact the Wage and Hour Division at its toll-free number, 1-866-4-USWAGE. Workers can call the Wage and Hour Division confidentially with questions—regardless of their immigration status—and the department can speak with callers in more than 200 languages.
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autobodynews.com / AUGUST 2022 AUTOBODY NEWS 9
Nissan Pathfinder Hood Latch Recall Follows Investigation by David A. Wood, CarComplaints.com
A Nissan Pathfinder hood latch recall follows a federal investigation into why the hoods suddenly fly open while driving. The 2013-2016 Nissan Pathfinder hood latch recall involves nearly 360,000 SUVs in the U.S. and Canada. The government opened an investigation into Pathfinder hood latches in December 2021 after receiving 14 reports which said the hoods opened when the latches failed. According to Nissan, the hood can open while driving if the primary hood latch is inadvertently released or the hood is not closed properly with the bell crank lever in the open position. Trying to drive a Pathfinder with the hood blocking the driver's view may be a challenge. “On certain Pathfinder vehicles, dust and dirt contamination may accumulate on and around the bell crank lever pivot joint,” Nissan said. “Over time, the build-up of contamination combined with a
lack of proper inspection and maintenance of the bell crank assembly (as described in the Owner’s Manual) can create mechanical binding that could cause the lever to remain in the open position after it has been disengaged.”
Nissan also said the contamination can scratch the bell crank protective anti-corrosion coating, which allows corrosion of the metal in the pivot joint. Even though the investigation continued for months and Nissan has ordered this recall, the automaker is still trying to figure out how dealerships will repair the
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Pathfinders. Nissan mailed interim recall letters to a selected sample of 40,000 Pathfinder owners beginning June 30. This hood latch recall letter will invite the owner to bring their Pathfinder to a dealer to have technicians inspect the bell crank and hood lock assembly and replace them if needed. But the replacement parts will be the same hood latches and components as originally installed in the Pathfinders. The collected components will be used by Nissan to create a recall remedy. Nissan will then mail interim Pathfinder hood latch recall letters to all other affected owners by Aug. 3. The recall letters will show owners how to properly inspect the bell crank assemblies and hood lock levers for proper operation. If the lever moves freely, the Pathfinder owner can clean the
lever based on the Nissan Pathfinder owner’s manual. The owner can also bring the Pathfinder to a dealer for the cleaning and maintenance. However, if the levers don't move freely, Nissan Pathfinder owners should take their vehicles to dealers to have the bell crank assemblies and hood lock levers inspected. The dealers will clean and lubricate the parts if the levers are working properly. The components will be replaced with new like-for-like hood latch components if the levers and locks aren't working. “When the final remedy plan is available, Nissan will mail final remedy notification letters and include a statement concerning reimbursement for the cost of obtaining a pre-notification remedy for a subject vehicle that was no longer under warranty at the time of a repair,” Nissan said. Owners of 2013-2016 Nissan Pathfinders can call 800-867-7669 and ask about hood latch recall numbers R22A2 and R22A3.
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GM Has 95,000 Incomplete Vehicles Just Sitting by Steven Symes, Motorious
A wise man once said it’s best to face the awful truth of your situation than to lie to yourself that everything is just fine. Well, the automotive industry is in a bad place and has been since the pandemic shutdowns. One of the most shocking indicators of where we’re at now is the revelation General Motors is holding onto about 95,000 unfinished vehicles at the end of Q2. Many news outlets are blaming the glut of unfinished cars, trucks and SUVs squarely on the microchip shortage, but they’re missing the big picture. Many raw materials and hence a whole array of components have been in short supply in the automotive industry since early last year. Try ordering enough car parts and you’ll find that fact out real quick. Per a press release from GM, most of the unfinished vehicles it’s sitting on were assembled in June. Consider this: according to a report from The Wall Street Journal, new vehicle sales in the U.S. fell
about 17% for the first six months of 2022. However, demand for cars remains high, so the problem obviously is a constrained supply. With prices soaring in the new and used markets, that’s what we’d expect to result.
Other automakers have suffered all kinds of supply chain problems, ranging from shortages in microchips to constrained availability of glass and aluminum. Toyota, which in December returned to full production capacity, has since seen many manufacturing setbacks, resulting in a 19% drop in sales for Q1 and Q2 of 2022. Worse, Nissan saw a 34%
drop while Hyundai Motor Co. said sales decreased 16%. Everyone is suffering. Another problem is creeping up, one that threatens to make this industry tailspin even worse: rising interest rates. The Wall Street Journal report claims automaker executives believe despite this, sales should level out through at least the end of 2022. Beyond then, well things could get ugly, although automakers seem to think they don’t have that far to fall if a deep recession does strike. Where things could get even more complicated is the projection by Intel’s CEO and others that the chip shortage will last well into 2024. Even once the supply of chips returns to pre-pandemic levels, it will take some time to produce enough new cars to even out the auto market. Plus, shortages of other raw materials or manufactured components could still put the squeeze on production.
ASE Education Foundation Establishes Network Serving as liaisons between students, schools and ASE Foundation industry partners, ASE field managers are integral to the success of the initiatives established by the ASE Education Foundation. ASE Education Foundation field managers assist and coach schools to achieve and maintain ASE accreditation, collaborate with local employers to engage with schools, help develop advisory committees and assist in the placement of students in entry-level positions in the transportation industry. In addition, the field managers foster local employer partner engagement by connecting employers directly with schools and students. They promote the benefits of professional and entry-level ASE certification, advise on instructor development opportunities, and enable and cultivate relationships among foundation supporters and accredited programs, administrators and instructors. Source: ASE Education Foundation
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autobodynews.com / AUGUST 2022 AUTOBODY NEWS 11
North Carolina SkillsUSA Winner Reflects on FTCC Education, Prepares for Nationals James Song has skills—as he demonstrated at the North Carolina State SkillsUSA competition, where he won first place in post-secondary automotive refinishing technology. “I was definitely nervous when I walked in, but I’d practiced three or four times each week for a month, plus I was fortunate enough to be prepped by Robbie Lynch, an instructor who has gone to states with previous students,” Song, a student at Fayetteville Technical Community College (FTCC), recalled of his feelings on the date of the state-level competition. “After about 30 minutes, everything fell into place. It felt like I was back in class, practicing. I started feeling really confident then; I knew I could do this.” Even the couple of curveballs thrown his way didn’t shake Song for long. “I was unfamiliar with some of the alternate techniques they offered, but instead of allowing myself to feel pressured to do something different, I just did as I was taught, and the product came out really great.” Although he felt pretty confident, Song found the win to be “unexpected. I didn’t expect to win. I wanted to compete so I could compare myself to others to gauge how advanced I am in the program and see how I compare to the rest of the industry. My friends thought I’d place and were surprised when I took first place. Although my family had no idea what was actually going on, they ‘knew’ I’d win because of my confidence.” Doug Irish, collision instructor at FTCC, was less surprised by his student’s success. “James is a very good student,” Irish said. “He’s focused and conscientious, and he’s a little more mature than most other students since he has an associate’s degree in another field and a couple years’ college experience behind him already. “Since James joined the class, he picks up the concepts very quickly and excels at transferring classroom knowledge into skillset development on the floor,” Irish continued. “When he misses a lab,
he comes in after hours to practice and hone his skills. FTCC and I were very excited that James won North Carolina State SkillsUSA.” Prior to enrollment in the collision technology program at FTCC, Song was working on the maintenance side, and as he considered the increasing electrification of vehicles and how that would impact the future viability of his career path, he decided collision might be a better route to travel.
Currently an apprentice at Hendrick Collision in Fayetteville, Song plans to pursue a career in the collision repair industry after graduation. “I’m specifically interested in painting; it’s a different form of artwork,” he shared. “I’ve heard that it’s a tough segment and you need to be good to stand out in such a minute group, but I’m up for the challenge. I enjoy demonstrating what I can do with paint, but I definitely enjoy bodywork, too. I just want to work on cars in general.” His studies at FTCC have prepared Song for his future career by providing “a lot of hands-on experience. The instructors are there to answer questions and provide examples of how to improve your skills, and I took all their advice in and used that knowledge to compete.” According to Irish, one of the biggest challenges he faces as a collision instructor is recruitment and finding the right students, but once he attracts them to the course, he works hard to train the next generation of technicians. Of course, the expense of the class presents additional challenges. “Collision has one of the highest expense ratios when it comes to training and consumable materials,” Irish explained. “Fortunately, the Collision Repair Education Foun-
12 AUGUST 2022 AUTOBODY NEWS / autobodynews.com
dation (CREF) helps us offset those costs through grants, tool donations and donated consumables. They essentially equipped us to restart the collision program in 2015 with nearly $1 million in tools, materials and products, all donated through the industry. “CREF put a lot of effort into helping our program become more effective at teaching the skills that industry employers actually need from entry-level technicians,” he added. “We teach them everything they’ll see in today’s collision shops, including working on live vehicles so they attain real-world experience. CREF has also helped us connect students with employers around the country when the graduate decides they don’t want to stay local; 100% of our graduates who want to join this field have been able to land a collision job.” Song believes many young people have started gravitating to more hands-on trades and wishes he’d had the option to study collision when he was in high school.
Next up? Song went to Atlanta, competing to be on the SkillsUSA Nationals awards stage June 24. “It’s a much bigger stage and more difficult competition, but I’m looking forward to James’ ventures in Atlanta and wish him the best,” Irish said. “I’m extremely excited for Nationals,” Song said. “I just wanted to see where I’m at—I didn’t expect to make it this far. I’m going in with the same mentality as before. I hope I place, but I really just want to put my name out there. Whether I win or not, I want to have a good time and show the industry who I am and what I can do.” Industry members interested in getting involved and supporting CREF’s efforts to assist secondary and post-secondary collision repair training programs should contact Brandon Eckenrode, managing director, at 312-231-0258 or Brandon. Eckenrode@ed-foundation.org. Monetary donations can be made online. Source: CREF
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Record Share of New-Car Shoppers Jumped Into a $1,000+ Monthly Payment in June Financing a new vehicle purchase is growing more expensive for consumers, according to the car shopping experts at Edmunds.
New data from Edmunds reveals: • The average annual percentage rate (APR) on new financed vehicles in Q2 2022 climbed to 5% for the first time since Q1 2020. • 12.7% of consumers who financed a new vehicle purchase in June committed to a monthly payment of $1,000 or more—the highest level that Edmunds has on record— compared to 7.3% in June 2021, 4.6% in June 2019 and 2.1% in June 2010. • The average amount financed for new vehicles hit a near-record level in the second quarter of 2022, climbing to $40,602—compared to $39,726 in Q1 2022 and $36,215 in Q2 2021. Edmunds analysts note that the first and only other time that the average amount financed for new vehicles surpassed $40,000 was Q4 2021, when
the average APR was just 4.1%. • An influx of luxury shoppers are turning their backs on leasing and choosing to purchase their new vehicles. Edmunds data reveals new-vehicle lease penetration fell to 18.5% in June, down from 30.5% in June 2019.
“A single percentage point increase might not seem like much at first blush, but that adds up to hundreds, if not thousands, of dollars over the course of a 72-month (or longer) loan—a significant cost considering consumers are financing as much as ever,” — Ivan Drury “Low interest rates used to be one of few reprieves for car shoppers amid elevated prices and supply shortages. But the Fed rate hikes this year are making finance incentives far costlier for automakers, and consumers are starting to feel the pinch,” said Jessica Caldwell, Edmunds’ executive director of insights. “Although there appears to be a steady stream of affluent consumers willing to commit to car payments that look more like mortgage payments, for most con-
Non-Tesla Supercharger Pilot Launch Expected Late 2022: White House by Maria Merano, Teslarati
The Biden-Harris Administration released a fact sheet suggesting the non-Tesla Supercharger Pilot program will be available in the U.S. later this year.
The White House fact sheet briefly mentioned Tesla’s contributions to expanding EV charging stations in the U.S. It acknowledged Tesla’s investments in Giga New York, which produces Supercharger stalls and Solar Roofs. “Tesla is expanding production capacity of power electronics components that convert alternating current to direct current,
sumers the new car market is growing increasingly out of reach.” To help guide car shoppers, Edmunds analysts calculated how much additional interest consumers can expect to pay over the course of a $40,000, 72-month car loan.
charging cabinets, posts and cables. Later this year, Tesla will begin production of new Supercharger equipment that will enable non-Tesla EV drivers in North America to use Tesla Superchargers,” the fact sheet said. The pilot program would open the Supercharger Network, with more than 35,000 Superchargers worldwide, to non-Tesla vehicles in the U.S. As of this writing, the non-Tesla Supercharger Pilot is available in most of Europe. The Supercharger rates for non-Tesla drivers vary by site but can decrease with the company’s charging membership. Prices for the Supercharger Pilot program are listed in the Tesla app. Tesla also charges idle fees to vehicles, ensuring Supercharger stalls are always immediately available once customers finish charging. Charging fees vary by country. In the U.S., Tesla charges 50 cents per minute when the Supercharger station is 50% full and $1 per minute if the station is 100% occupied.
14 AUGUST 2022 AUTOBODY NEWS / autobodynews.com
They note that jumping to a 5% APR from a 4% APR would cost consumers $1,324 more in interest over the course of the loan. Jumping to a 6% APR from a 4% APR would cost $2,672 more. “A single percentage point increase might not seem like much at first blush, but that adds up to hundreds, if not thousands, of dollars over the course of a 72-month (or longer) loan—a significant cost considering consumers are financing as much as
ever,” said Ivan Drury, Edmunds’ senior manager of insights. “Seeking out finance incentives was less necessary during recent years in which finance rates had been low, but shopping around for lower APR offers from dealers or third parties could make a difference in today’s market.” Edmunds analysts also note consumers are opting for loans with longer terms to make monthly payments more palatable. Edmunds data reveals 36.1% of consumers who financed a new car purchase in June opted for a loan term of between 73 and 84 months, compared to 32.8% in June 2021. “Consumers are exploring every possible avenue to make their next vehicle purchase affordable, and longer loan terms are a good example of that, even if that choice poses risks considering vehicle wear and tear and greater negative equity (the amount by which their loan balance exceeds their vehicles’ value) as their vehicle ages,” said Drury. “The best moves shoppers can make are staying as informed as possible and not relying on car financing strategies of old—because buying a car in 2022 is a whole different ball game.” Source: Edmunds
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Annual Report Says Bakersfield, Sacramento and Baton Rouge Are the Worst Driving Cities in the U.S. QuoteWizard on July 13 released a report on the 70 best and worst driving cities in the nation.
QuoteWizard sets out each year to see which cities have the worst drivers in America, by analyaing data from 6 million car insurance quotes from drivers in the top 70 cities in the country, then evaluating cities on four factors to determine overall driver quality and taking a composite ranking of overall incidents. Incidents include accidents, speeding tickets, DUIs and citations, like running a red light, using
a cellphone while driving, etc. Cities rated among the worst were those with the highest rates of incidents, and the best driving cities had the lowest rates of incidents. To view the full report, visit https:// quotewizard.com/news/ posts/the-best-andworst-drivers-by-city Worst Driving Cities 1. Bakersfield, CA 2. Sacramento, CA 3. Baton Rouge, LA 4. Los Angeles, CA 5. San Francisco, CA 6. San Diego, CA 7. Fresno, CA 8. Riverside, CA 9. Richmond, CA 10. Jacksonville, FL 11. Salt Lake City, UT 12. Milwaukee, WI 13. Cleveland, OH 14. Tampa, FL 15. Columbus, OH 16. Colorado Springs, CO 17. Richmond, VA 18. Virginia Beach, VA
19. Dayton, OH 20. Greenville, SC 21. New York, NY 22. Providence, RI 23. Honolulu, HI 24. Miami, FL 25. Omaha, NE 26. Baltimore, MD 27. Denver, CO 28. Orlando, FL 29. Columbus, SC 30. Portland, OR 31. Madison, WI 32. Kansas City, KS/MO 33. Indianapolis, IN 34. Wichita, KS 35. Phoenix, AZ Best Driving Cities 1. Louisville, KY 2. Hartford, CT 3. Little Rock, AR 4. Oklahoma City, OK 5. Tulsa, OK 6. Dallas, TX 7. Pittsburg, PA 8. Detroit, MI 9. Houston, TX 10. Chicago, IL 11. New Orleans, LA 12. Charlotte, NC
Nissan Frontier and Titan Owners Warned to Use Parking Brakes by David A. Wood, CarComplaints.com
More than 180,000 Nissan Frontier and Titan trucks are recalled because they could roll away even when the trucks are shifted into PARK. Nissan is warning 2020-2022 Frontier and Titan owners to engage the parking brakes every time they park their trucks. Nissan received a report in June 2021 alleging a 2020 Frontier began to move after the driver shifted into PARK, but the dealer was unable to replicate the problem. Nissan took the transmission and sent it to the supplier, JATCO, but the company found no problems. The automaker thought it was just a random incident until Frontier and Titan warranty claims began arriving. Nissan collected the components but engineers couldn't duplicate the issues, and neither could JATCO. JATCO finally duplicated the problem that was caused by the parking pawls. "Due to dimensional varia-
13. Greensboro, NC 14. Rochester, NY 15. Memphis, TN 16. San Antonio 17. Nashville, TN 18. Allentown, PA 19. El Paso, TX 20. Lexington, KY 21. Philadelphia, PA 22. Rochester, NY 23. Durnham, NC 24. Austin, TX 25. Birmingham, AL 26. Minneapolis, MN 27. Albany, NY 28. Seattle, WA 29. Tucson, AZ 30. Boise, ID 31. Greenville, SC 32. Atlanta, GA 33. Boston, MA 34. Charleston, SC 35. Las Vegas, NV Source: Quote Wizard
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Nissan is trying to determine how it will repair the Frontier and Titan trucks. Interim Nissan recall letters are expected to be mailed July 20, and second letters will be mailed once dealers are ready to repair the trucks. Nissan Frontier and Titan truck owners may contact Nissan at 800867-7669. Nissan's recall numbers are R22A2 and R22A3.
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Continued from Cover
Initial Vehicle Quality The U.S. Initial Quality Study, now in its 36th year, is based this year on responses from 84,165 purchasers and lessees of new 2022 model-year vehicles who were surveyed early in the ownership period. The study is based on a 223-question battery organized into nine vehicle categories: infotainment; features, controls and displays; exterior; driving assistance; interior; powertrain; seats; driving experience; and climate. The study is designed to provide manufacturers with information to facilitate the identification of problems and to drive product improvement. The study was fielded from February through May. “Supply chain disruption, especially the shortage of microchips, has caused automakers to seek alternative solutions to get new vehicles into purchasers’ and lessees’ hands,” Amodeo said. “In some cases, new vehicles are being shipped without some features installed. Communication with them about the changes in feature availability, as well as when such features will be re-
instated, is critical to their satisfaction.” Following are key findings of the 2022 study: • Deterioration goes beyond launch vehicles: Both all-new and continuing models increase in problems this year, though all-new models worsen the most (23 PP100). The initial quality gap between all-new and continuing models widens this year to 25 PP100 from 20 PP100 in 2021. The 2022 study finds four times as many new models performing worse than their segment averages compared with those that perform better than their segment averages. • Mass market vehicles experience fewer problems than premium vehicles: Mass market brands average 175 PP100, which is 21 PP100 fewer than for premium brands (196 PP100). Premium brand buyers typically purchase more technology in their vehicles, and the added complexity of that tech increases the likelihood of problems. Given the challenging task of launching new vehicles in the current environment, mass market carryover vehicles are most likely to achieve high-ranking initial quality.
“Owners of premium-brand vehicles experience more problems than mass market vehicle owners, continuing a trend that started in 2016,” Amodeo said. “But some brands, notably Genesis and Lexus, have largely been able to avoid that issue.” • Infotainment systems remain the most problematic area: The infotainment category continues to be the most problematic, with an average of 45.0 PP100---which is 19.5 PP100 more problems than the next-highest category. Six of the top 10 problem areas in the study are infotainment-related, including: Android Auto/Apple CarPlay connectivity (5.8 PP100); built-in voice recognition (4.0 PP100); difficulties with touchscreens/display screens (3.5 PP100); built-in Bluetooth systems (3.4 PP100); not enough power plugs/ USB ports (2.9 PP100); and inconsistent audio volume (2.7 PP100). • Battery-electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) more problematic: Owners of BEVs and PHEVs cite more problems with their vehicles than do owners of vehicles with internal combustion engines (ICE). ICE vehicles average 175
PP100, PHEVs average 239 PP100 and BEVs---excluding Tesla models---average 240 PP100. (Tesla models average 226 PP100 and are shown separate from the BEV average because the predominance of Tesla vehicles could obscure the performance of the legacy automakers that have recently introduced BEVs.) • Driving assistance issues grow: Problems with advanced driving assistance systems (ADAS) declined in 2021 but have increased in 2022. The most problematic ADAS system is lane departure warning/lane-keeping assistance with 4.1 PP100. • Tesla Motors officially included for the first time: Tesla Motors is included in the industry calculation for the first time, with a score of 226 PP100. However, because Tesla Motors does not allow J.D. Power access to owner information in the states where that permission is required by law, Tesla vehicles remain ineligible for awards. Highest-Ranking Brands and Models Buick is the highest-ranking brand in overall initial quality with a score of 139 PP100. Dodge (143 PP100) ranks second and Chevrolet (147 PP100) ranks third.
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Among premium brands, Genesis (156 PP100) ranks highest, and ranks fourth overall. Lexus (157 PP100) ranks second and Cadillac (163 PP100) ranks third. The parent corporation receiving the most model-level awards is General Motors Company (nine awards), followed by BMW AG (five); Hyundai Motor Group (three); Ford Motor Company (two); and Toyota Motor Corporation (two). Among brands, Chevrolet received the most segment awards (six), followed by BMW (four). General Motors models that rank highest in their respective segments are Buick Encore GX, Cadillac Escalade, Cadillac XT6, Chevrolet Corvette, Chevrolet Equinox, Chevrolet Malibu, Chevrolet Silverado, Chevrolet Silverado HD and Chevrolet Tahoe. The Chevrolet Corvette is the highest-ranking model overall with 101 PP100. BMW AG models that rank highest in their respective segments are BMW 2 Series, BMW 7 Series, BMW X1 and BMW X3. Hyundai Motor Group models that rank highest in their respective segments are Genesis G80, Hyundai
Accent and Kia Forte. Toyota Motor Corporation models that rank highest in their respective segments are Lexus IS and Toyota 4Runner. Ford Motor Company models that rank highest in their respective segments are Ford Ranger and Lincoln Nautilus. Plant Quality Awards General Motors Company’s plant in San Luis-Potosi, Mexico, which produces the Chevrolet Equinox and the GMC Terrain, received the Platinum Plant Quality Award. Plant quality awards are based solely on defects and malfunctions and exclude design-related problems. Toyota Motor Corporation’s Takaoka 1 (Japan) plant, which produces the Toyota Corolla, and Nissan Motor Co. Ltd.’s Tochigi 1 (Japan) plant, which produces the Infiniti Q50 and Q60, received the Gold Plant Quality Award for Asia/Pacific, in a tie. BMW AG’s Regensburg (Germany) plant, which produces the BMW X1 and X2, received the Gold Plant Quality Award for Europe and Africa. Source: J.D. Power
Teslas Get Updated Seat Belt Functions in New Update by William Johnson, Teslarati
As part of a recent over-the-air (OTA) software update, Tesla improved its vehicles’ safety and comfort by introducing improved seat belt and suspension enhancements. The seat belt enhancement is an update that uses the vehicle’s onboard cameras to detect when a crash is imminent to automatically tighten seat belts in the cabin. This feature already existed in a limited capacity, as Tesla’s seat belts would tighten as airbags were deployed. However, this update now allows vehicles to act more proactively to protect their occupants. Tesla already benefits from a low center of gravity, making it hard to tip over; myriad safety features; and, despite what some news outlets would argue, an increased level of safety due to a reduced number of combustible parts. These updates prove there is more that can be done to prevent automotive deaths, and Tesla is implementing changes to address these risks. While the seat belt enhancement applies to all vehicles, the suspension
enhancement only applies to the Model S and Model X with adjustable air suspension. These vehicles will now, also through the use of the onboard cameras, be able to detect rough roads and potholes. Similar to the vehicle’s ability to detect debris on the road, this system uses the suspension to raise the vehicle proactively to protect the body panels and occupants from being jarred when going over rough terrain. Also included in this update is the green light chime and the return of the range at destination feature. The green light chime alerts the driver when the traffic light they are waiting at has turned green, or when the vehicle in front has started to advance. The range at destination feature, while previously available on vehicles, returns to allow drivers to see how much battery they will have left when they reach their destination. These updates mark the first 2022.20 series of updates Tesla is releasing to vehicles and follow a long stream of 2022.16 updates that included everything from autopilot max speed increases to driver profiles to updated visualizations.
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autobodynews.com / AUGUST 2022 AUTOBODY NEWS 19
Massachusetts Auto Body Shops Fight for Better Reimbursement Rates by Ed Attanasio
Collision repair industry leaders, along with a row of tow trucks, paraded outside the Massachusetts State House on May 18 to demand action on two proposed bills before lawmakers that would raise the state’s lowest-in-the-nation reimbursement rates. House Bill 1111 and State Bill 709 are an “Act to establish a minimum reimbursement rate to insurance claimants” and are currently being argued in a joint committee. According to supporters, both bills would set the rate for repair at approximately $78 per hour for reimbursement. The current reimbursement rate is $40 per hour, which, according to the group, is the lowest in the nation and just $10 more than it was in 1988. Both bills have until June 30 to clear the committee, after which the legislature would have just a month before the end of the session to approve and send them to Gov. Charlie Baker’s desk. AASP-MA Executive Director Evangelos “Lucky” Papageorg is excited about the two proposed bills that might actually level the playing field. He offered a little history on House Bill 1111 and State Bill 709. “In 1988, insurance reform led to the reimbursement rate being at $30 an hour, which made Massachusetts have one of the highest-paid reimbursement rates in the country and best reimbursement rates,” Papageorg said. “But, once the Insurance Reform Act went through, the reimbursement rates actually dropped from $30 to $28 per hour for about five years, based on contractual arrangements that shops had with the insurance companies. Today, they are at $40—35 years later. I wouldn’t call that a jump in rates, to say the least. “House Bill 1111 and State Bill 709 are essentially identical bills that take away the ability for insurance companies to stagnate the rates in the future, which is what they’ve effectively done,” Papageorg said. “It allows the insurance industry and body shops to be able to plan ahead as far as what they can anticipate
for expenses and income, because the reimbursement rate will keep pace with the consumer pricing index here, with the language in these bills.” Papageorg has witnessed the results of not providing a livable wage to body technicians, causing many to exit the industry with prejudice, he said. “One of our members and a top body shop operator, Brian Bernard, has lost several of his top techs to
A vocal group of more than 60 people gathered outside the Massachusetts State House to demand action on two proposed bills currently before lawmakers. Credit: AASP-MA
other shops or to the industry altogether,” Papageorg said. “He lost several technicians over the last few years to other industries in neighboring states because the surrounding states are paying a higher rate. “One vocational school teacher told us recently that students get into collision repair because it’s cool and they love it. It’s exciting. It’s constantly changing,” Papageorg continued. “But all those things don’t pay the bills. The collision repair students don’t stay with it, and those who do leave the vocational schools and get into a collision repair shop don’t last very long because they can’t make a decent living. “These bills have the potential to rectify a situation. I can’t find any other industry or vocation out there that can say they have only increased their skills by only $10 an hour over the last 35 years,” Papageorg said. “Insurance companies are reporting record-breaking profits, and yet they’re still applying for increases in their premiums, and some of their top managers have incredible salary packages. Cost containment has to begin at the top.” Bernard, co-owner of Total Care Accident Repair in Raynham, MA, sees the problem of underpay-
20 AUGUST 2022 AUTOBODY NEWS / autobodynews.com
ing technicians causing a whole set of additional issues. “This should have happened several decades ago, so these bills are much-needed and can provide us with a much-needed boost in many ways,” Bernard said. “The cost of living keeps going up every year, and the insurance companies can tell us with straight faces that these wages are acceptable? What can you say to a young person who is trying to get into this industry and willing to work for inferior pay? It all comes from the fact that the insurers don’t want to compensate us properly for repairs, so we are in this unfortunate situation.” Former State Sen. Guy Glodis said the insurance companies are going to do everything they can to prevent these bills from passing. Nearly a decade ago, the collision repair industry in Massachusetts approached Glodis to tell the insurance companies their wages were ridiculously low. “Everything [collision repairers] told me has happened exactly the
way they described it to me in 2003,” he said. “They said workers would leave the state and that it would be difficult to get young people to join the industry. We couldn’t get any traction back then, but now we might be able to break through. It involves educating the legislature about the fact that the insurance industry has been successfully suppressing wages for more than 20 years.” Elias Akiki, owner of Akiki Auto Body in Hyde Park, MA, appeared on several news stations in the Boston area, speaking about a topic he knows too well. “The bottom line is that the insurance companies have been taking advantage of the collision repairers and insured consumers since day one,” he said. “They will always try to get away with whatever they can. It ends up creating a bad situation because many shops can’t afford to do an OE repair, and the customer doesn’t know any better. So, they settle for sub-par repairs, and all we’re doing is trying to do the job right.” Akiki, 47, entered the collision
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autobodynews.com / AUGUST 2022 AUTOBODY NEWS 21 6/30/21 1:37 PM
repair industry at 19, working with his father. He has seen the path these bills have taken and is ready for change, he said. “Back in 1985, we were a completely different company than we are today because the industry has changed so dramatically since then,” Akiki said. “Our obligation now is to learn, educate, evolve and do repairs the right way. For us, it’s the only way, but it comes at a cost.” Spiraling costs have hamstrung many shops, Akiki said, which makes it so much more difficult to make a profit. “We have more than 10 OE certifications; do you know how much that costs us?” he said. “The training, the diagnostics, aluminum repair—it’s not cheap. We have to pay for all of it at a reimbursement rate of $40? It’s not fair.” There is always a silver lining in every cloud, Akiki said with a chuckle. “One good thing is that we don’t have any MSOs here competing with us. They are smart enough to know that they can’t make money in Massachusetts.”
Cox Automotive Lowers Full-Year New-Vehicle Sales Forecast as Supply Problems Persist June U.S. new-vehicle sales are expected to show a market still constrained by a lack of supply and one that is virtually unchanged since January. According to the Cox Automotive June sales forecast released June 28, the seasonally adjusted annual rate (SAAR) of new-vehicle sales this month is expected to hit 13.8 million, up from last month’s 12.7 million pace but well below last year’s 15.5 million level. The sales volume in June is expected to finish near 1.2 million units, down 7.5% from last year’s volume of 1.3 million sales. However, this is an increase of 7.5% from May’s volume of nearly 1.1 million units. There is one more selling day this June than last year and the same number as last month. Tight inventory continues to negatively impact new-vehicle sales. Since June 2021, monthly sales volume has been stuck in a tight window, with little deviation, averaging 1.1 million units a month and peaking only at 1.3 million in June 2021.
With no clear timeline for any notable recovery in new-vehicle inventory levels, Cox Automotive is lowering its full-year 2022 U.S. auto sales forecast to 14.4 million
units, down from its current forecast of 15.3 million. The current forecast now is for new-vehicle sales volumes to fall below the 14.6 million sold in 2020 when the market was initially ravaged by the global COVID pandemic. “Last June, I wrote that the concern about the supply situation could not be overstated, as we were in untested territory for the market,”
Despite Increase in Demand, Gas Prices Keep Falling by Ellen Edmonds, AAA
Pump prices declined again, falling another 12 cents since the previous week to $4.67 as of July 11. The dip in the national average for a gallon of gas occurred despite a slight rise in demand, likely due to robust July 4th holiday automobile travel. AAA forecasted 42 million people would hit the roads for the holiday weekend, a new record. “Usually, more people buying gas would lead to higher pump prices,” said Andrew Gross, AAA spokesperson. “But the price for oil, the main ingredient in gasoline, has fallen and is hovering around $100 a barrel. Less expensive oil usually means less expensive gas.” According to new data from the Energy Information Administration (EIA), gas demand increased from 8.92 million b/d to 9.41 million b/d ahead of the 4th of July holiday, while total domestic gas stocks decreased by 2.5 million bbl. Typically, these supply/ demand trends would put upward pressure on pump prices; however,
said Charlie Chesbrough, senior economist, Cox Automotive. “That sentiment remains, as there has been no significant shift in the conditions on the ground since last fall. Even though economic conditions have worsened in the past months, the lack of supply is still the greatest headwind facing the auto industry today.” June 2022 Sales Forecast Highlights Second-quarter 2022 sales are forecast to fall 19.3% compared to Q2 2021 First-half sales are forecast to be down 17.3% from the same period in 2021. General Motors is forecast to outsell Toyota in Q2, jumping back into the top-seller position. Tesla is the only major brand to increase sales year over year in the first half. Honda, Nissan and VW all see first-half sales drops in excess of 30% year over year. Source: Cox Automotive
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falling oil prices have contributed to lower pump prices. The July 11 national average of $4.67 is 32 cents less than a month ago and $1.53 more than a year ago.
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M-F 7:30 -5:30 8530 I B . C , NC 28262 The nation’s top 10 largest weekly decreases: Texas (-18 cents), Ohio (-17 cents), Illinois (-17 cents), California (-16 cents), Wisconsin (-15 cents), Indiana (-15 cents), Kentucky (-15 cents), Alabama (-15 cents), Virginia (-14 cents) and Florida (-14 cents). The nation’s top 10 least expensive markets: South Carolina ($4.18), Georgia ($4.18), Mississippi ($4.18), Louisiana ($4.22), Texas ($4.22), Alabama ($4.25), Arkansas ($4.26), Tennessee ($4.28), North Carolina ($4.31) and Kentucky ($4.37). Source: AAA
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24 AUGUST 2022 AUTOBODY NEWS / autobodynews.com
Dept. Hours: M-F 7-7; Sat 7-5 email@example.com NO. CAROLINA
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Wolfchase Honda Bartlett
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Checkered Flag Honda Norfolk
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Hall Honda Virginia Beach
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autobodynews.com / AUGUST 2022 AUTOBODY NEWS 25
Continued from Cover
Crash Champions to Merge While still smaller than Gerber and far behind Caliber, this new entity will be competing coast to coast with its two larger national competitors, as well as six smaller super-regional MSOs. For much of the last six months, Crash’s investment bank was circulating an extensive investment memorandum, seeking a new private equity sponsor. During the same period, the investors in Service King were looking for a resolution to its deteriorating financial performance. Clearlake Capital acquired a control position in the Service King bonds. This position allowed them to negotiate a debt conversion to new equity and an extension of other debt obligations. In addition, Clearlake injected a reported $200 million in cash. Crash was looking for capital to continue its rapid growth. Clearlake was looking for a partner to help manage a billion dollar investment in collision repair. The resulting
merger is a combination of a deep pocketed capital sponsor, extensive management team, geographic penetration and scale that now rivals its two biggest competitors. Crash Champions has gained a major influx of assets and probably some cash as well. We don’t know exactly what the combined balance sheet will look like, but total debt to capital will be much more reasonable for the combined companies. We would expect Crash’s acquisition program would be more subdued for a period as it integrates the Service King shops. However, given the success of their program in the last three years, there is probably a substantial pipeline of commitments that will be completed. And the deep pockets of Clearlake will likely allow Crash to contemplate many, as well as larger, transactions. Among the benefits of the merger are a huge increase in revenues and scale, complementary footprints, improved negotiating power with insurance companies, improved purchasing and spreading overhead.
Lordstown Motors Continues Executive Shakeup, Working Toward Endurance Production by Joey Klender, Teslarati
Lordstown Motors announced July 12 it promoted several of its executives, continuing to mix up its front office in preparation for the production of the Endurance all-electric pickup. Daniel Ninivaggi, who assumed the role of CEO after Steve Burns was relieved of his duties, was elected to serve as Lordstown’s executive chairman of the board. This will put Ninivaggi’s new focuses on corporate strategy, strategic partnerships and capital raising as Lordstown continues to battle with the somewhat typical challenges of an electric vehicle startup. Edward T. Hightower, who previously served as Lordstown’s president, was elected to the “additional role” of CEO, effective immediately. Hightower will remain the CEO of MIH EV Design LLC, Lordstown’s joint venture with Foxconn, the company that bought the automaker’s Ohio factory earlier this year. Lordstown also announced the arrival of Dr. Donna Bell, who will assume the role of executive vice president of product creation, engineering and supply chain. Bell has
nearly 30 years of automotive experience with Ford, where she dealt with numerous tasks related to automotive product development and technology innovation leadership experience. Along with Bell, Andrew Reyntjes joined the company and will become the senior vice president of commercial sales, service and marketing. He has more than 15 years of service in various roles throughout the fleet industry, including with GM. Jill Coniglio-Kirk recently joined Lordstown as vice president of people and culture. Jane Ritson-Parsons is also transitioning away from the chief commercial officer role she assumed a year ago when she joined Lordstown. She will become an advisor for the company. “Jane’s leadership in several of our functions was instrumental to the progress we have made over the past year,” Ninivaggi said. “I thank her for her many contributions to the company and look forward to her support as an advisor.” Lordstown plans to begin production of the Endurance pickup truck in Q3, with initial commercial deliveries slated to begin in Q4.
26 AUGUST 2022 AUTOBODY NEWS / autobodynews.com
The challenges will be integration, technician retention and merging management teams. Crash Champions has been building out across the country in multiple attractive markets---Southern and Northern California, Florida, Colorado, Chicago, Wisconsin, Washington, D.C., and Philadelphia. Service King had an enviable footprint across the West, Southwest, Texas and Chicago. The two firms overlapped in some markets where neither was dominant. The combined numbers in these markets are considerably more scalable and efficient. In other markets, each had considerable scale without duplicating the other’s positions. With the merger, Crash enters 12 new states and several of the fastest growing metropolitan areas around the country. Texas is the grand prize, with 96 locations in a state where Caliber dominates and Gerber is a weak third player. The original Service King locations owned by Eddie Lennox are the core operations in the best performing region for Ser-
vice King. Crash already has a very strong position in Northern California with the acquisition of Mike’s Auto Body. With the addition of Service King’s South Bay and Sacramento shops, it is a strong No. 2 to Caliber. The combination of Crash’s 30 shops in Southern California with 25 of Service King gives them a stronger footprint in the nation’s largest market. However, even the combination of these two still leaves them a very distant second to Caliber. While 37 total shops is modest, the coverage across the Washington, D.C., and Philadelphia region is highly credible. Combined operations in Florida with 47 shops improves their penetration in that market. Source: Focus Advisors
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autobodynews.com / AUGUST 2022 AUTOBODY NEWS 27
From the Desk of Mike Anderson with Mike Anderson
Mike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.
Collision Repair Shops Play Vital Role in Helping Reduce Vehicle-Related Deaths I read a sobering article in The Washington Post recently that I think offers some insights into where vehicle technology is likely headed. The article featured an interview with Jeffrey Michael, who spent three decades at the National Highway Traffic Safety Administration (NHTSA), and is now at the Johns Hopkins Center for Injury Research and Policy. He’s a car guy. The article said when he’s home, he likes to tinker on the 1987 Porsche 911 he bought as a fixer-upper. While he was with NHTSA, he worked on issues related to seat belts, child restraints, drunken driving and emergency medical services. But the article also said this: “Michael saw the ability of federal programs to influence safety
and cites a gradual reduction in road deaths over 50 years. But in an interview with The Washington Post—days after new NHTSA figures showed fatalities hitting a 16year high—Michael pointed to the nation’s failure and potential fixes.” Make sure you read that again. Roadway fatalities have reached a 16-year high. You have to believe NHTSA and other regulators are going to place an even greater emphasis on vehicle and roadway safety. You have to believe the automakers are going to be pushing forward on getting more and better ADAS and telematics features into vehicles. That’s going to impact the vehicles we have coming into shops. Michael also noted in the interview, “To improve things, we’re going to need to individually make concessions about convenience, about
driving a little slower, about taking a little more care, about personal responsibility, of using our seat belts, of driving at or below the speed limit, of driving responsibly, certainly driving without impairment, without fatigue, without distraction.”
The “using our seat belts” portion of that quote caught my eye. Our industry has a vital obligation to make sure those seat belts have been inspected after a vehicle has been in an accident. Every automaker has very specific requirements about this. Even when General Motors revamped its post-collision vehicle
inspection requirements, for example, its stance on seat belts did not change. GM wants “every seat belt of every [GM] vehicle inspected every time” a vehicle is in for repairs, “regardless of the [crash] severity level or what’s being done” to the vehicle, said John Eck, collision manager for GM. We’ve been asking about seat belt inspections in our “Who Pays for What?” surveys dating back to 2016. On the surface, the news is good. Back in 2016, close to twothirds of shops said they’d never billed for the labor involved in inspecting seat belts, and among those who had, fewer than one in four said they were paid for that work by the eight largest national insurers “always” or “most of the time.” In the seven years since, the percentage of shops not billing for the work has fallen, and the percent-
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age being paid regularly has grown. But looking at the numbers still keeps me awake at night. As of this year’s survey, there were still 28% of shops—more than one in four— that acknowledged never having billed for seat belt inspections. I have to believe many of those shops aren’t doing this critical work, perhaps because they’re not researching
not otherwise—obligated to do it even if they’re not paid for it, are insurer payment practices contributing to it not being done on every single vehicle? Ladies and gentlemen, it often doesn’t require any more than looking at the vehicle owner’s manual to document the seat belt inspection requirement. In the resources sec-
A “Who Pays for What?” survey this spring found only about 37% of shops are paid regularly when billing for labor required to inspect seat belts as part of repairing a collision damaged vehicle
and following the OEM procedures. And in the seven years we’ve asked, never have more than two in five shops billing for this work said the insurers regularly pay for it. How can the insurance industry deny payment for this needed step? And though shops are morally—if
tion of the “Who Pays” body labor report, we point to an excellent list of links to vehicle owner’s manuals, put together by the Database Enhancement Gateway (DEG). You can take the current “Who Pays for What” survey during July at www.surveymonkey.com/
r/3X7FDBP In some cases, in addition to a visual inspection, the OEM procedure may require the use of a diagnostic scan tool to check the pre-tensioners. On some Honda and Acura vehicles, for example, a deployed pre-tensioner does not trigger a diagnostic trouble code, so other “live data” from the scan must be checked. In these cases, it’s important to know I’ve read of instances where shops have found their aftermarket scan tool didn’t catch blown pre-tensioners an OEM scan did. I encourage you to check the NHTSA website, www.nhtsa.gov, for some sobering statistics about highway deaths, and some tools you can use to help educate your customers. But we also all need to make sure we’re not contributing to the problem, by repairing every vehicle fully and correctly, including the seat belt and other OEM safety inspections.
Continued from Cover
Staging Crashes pened, CFO Jimmy Patronis’ office said in a statement. She also allegedly recruited an undercover police detective to participate in a staged accident, provided passengers for the vehicles and directed them to seek treatment at her clinic, not far from downtown Tampa. If convicted of all charges, she could face as much as 30 years in prison. The investigation into the alleged fraud ring included investigators from the Florida Department of Financial Services, Nationwide Insurance and the National Insurance Crime Bureau. The Hillsborough County State Attorney’s Office will handle the prosecution.
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Industry Insight with John Yoswick
—John Yoswick is a freelance writer based in Portland, Oregon who has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.
3 Collision Repair Business Leaders Find Ways to Develop Positive Company Culture
Three auto body shop owners spoke thing,” Halcro said. “Everyone was during the recent Society of Col- doing their own thing and saying, lision Repair Specialists’ Repairer ‘That’s not my job.’ So we switched with Ed Attanasio Roundtable about their efforts to everybody to hourly, working out a build a positive culture within their pay plan that got them as close as we could to the flat rate that they had.” companies. Halcro said he tries to get out Bruce Halcro of Capital Collision Center in Helena, MT, said a to each technician’s work area every change in pay plans was one step he day to talk with them briefly. took a few yearswith ago. Ed Attanasio “Sometimes it’s about the car “We were paying flat rate, and it they’re working on, but most of the created more divisiveness than any- time it’s about family,” he said. “I think that’s an important connection to have with employees. I think how you treat employees, showing them that you value them, really builds a with Ed Attanasio culture.” One thing Halcro said has surprised him was the impact on his company’s culture he’s seen from its sponsorship this past year of a youth hockey team. Montana shop owner Bruce Halcro said “So we had our own section, with Attanasio sponsorship of a youth hockeyEd team has been a ‘Capital Collision section,’ at the good for team-building within his shop
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games,” he said. “We actually hired a couple of the players to come in a couple hours a day, twice a week, to clean the shop, empty garbage. By the end of the year, almost our whole crew was going to these hockey games. By Wednesday, they all would be talking about who was going to the hockey game that Friday night. Honestly, that was one of the best team-building things that we’ve done, that’s been impactful for our youngest employees to some of our older ones.” Ron Reichen, owner of Precision Body & Paint, which is opening its fifth location in Oregon this year, said part of developing his company’s culture involves having second-year students from a local community college collision industry training program spend their threemonth co-op at one of his shops. “We try to have them touch
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Gas Tax Shop Holiday Continued from Cover
each one of the different disciplines within that 90 days,” Reichen said. “So they get to see where their appetite might be. During that 90 days, they’re learning the culture. They’re learning to come to work on time, to keep their work area clean, to read the OEM repair procedures, to read
Oregon shop owner Ron Reichen said having students work in multiple departments during their first 90 days helps them learn the company culture
and follow the repair plan. They understand they’re part of a team.”
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consumers.” In mid-March, Kemp signed House Bill 304 to suspend the state tax on motor fuel through May 31. In May, the governor ex• Delivery to 100 Mile Radius of Naples tended the moratorium through with Stacey Phillips PARTS HOURS: July 14. PARTS DIRECT LINE: Georgia collects 29.1 cents a M-F 7am to 6pm 239-734-3215 2 3 39 9 734 734 3215 21 gallon on gasoline and 32.6 cents Sat 8am to 5pm Fax: 239-591-3051 a gallon on diesel fuel. Suspend5665 N. Airport Pulling Rd. / Naples, FL 34109 ing the gas tax represents a revenue loss of about $150 million to At Rick Hendrick Chevrolet Naples, $170 million per month. with Stacey Phillips we we’ e’re e ’re re re yyou yoour oneee-stop -sto stop opp ssho hop for for Meanwhile, Democratic gubernatorial candidate Stacey Abrams has launched ads on gas station advertising screens to highlight her support for suspending the gas tax until the end of 2022. She contends Georgia hasStacey a “massive with Phillips budget surplus” because of federal American Rescue Plan funding.
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Other entry-level hires often start off in a shop’s parts department, with opportunities for a career path laid out up front. “You’re not going to be stuck on the wash rack or with a broom the rest of your life,” Reichen said. “If they demonstrate a good work ethic, then our master technicians will say they are interested in taking on this person, being a mentor, to grow them, whether their interest is on the refinish or body side or mechanical.” He said getting on a collision repair training program’s advisory committee is one of the best ways both to find entry-level employees and help with the industry’s overall technician shortage. “We also look at the high schools with the SkillsUSA program,” Reichen said. “We find that even though a high school may not have an auto body or refinishing program, they may have a mechanical program. And with our industry changing, with more and more calibrations and ADAS and things like that, there’s opportunity there. You have to get creative.” He said his company also works
with those being released from a state penitentiary. “That involves a certain amount of calculated risk,” Reichen acknowledged. “It’s a lot of work, but we’ve had a pretty good success rate with doing that.” Andy Tylka of the Tag Auto Group in Indiana acknowledged it has been a challenge maintaining his company’s culture while growing the business from six shops to 15 over two and a half years. “But those people decided to sell to me because our culture was very similar to theirs,” Tylka said at the SCRS event. “A single-family-owned culture. Knowing everyone’s name, having those conversations, knowing something about everybody’s life, them knowing your life.” He said rewarding loyalty is extremely important. “There might be a shop that needs a technician and they’ll just load [the new hire] full of benefits and pay, while disregarding the loyal employees who have been there all along,” Tylka said. “I need to do a better job of that as well.” Growing your own new employees is a great way to instill your
Tesla, Hertz Help Uber Drivers Save Money with 15K EV Rentals by Steven Loveday, InsideEVs
According to Uber via Electrek, some 15,000 rideshare drivers in cities across the U.S. have rented Tesla's EVs through Hertz. It was previously reported Hertz ordered 100,000 Tesla Model 3 sedans, though there was talk of additional orders going forward. At the time, it seemed it would take many months, if not years, to get Tesla's vehicles at Hertz locations throughout the country, but they're already available in 30 cities. After Hertz shared it had ordered 100,000 Tesla vehicles, it announced 50,000 Tesla rentals would be made available for use by Uber drivers. “To date, more than 15,000 drivers have rented a Tesla through this program—and they’re making a real impact,” said Uber SVP of Mobility and Business Operations Andrew Macdonald. “Together they’ve completed more than 5 million fully-electric trips and driven over 40 million electric miles.,” If the program plays out as planned, Hertz may expand its deal with Uber, and potentially order more Tesla EVs. It already appears
the program is a success, with Uber drivers sharing their satisfaction with the vehicles and the savings. It costs an Uber driver $334 per week to rent a Tesla Model 3, and the rate includes maintenance and insurance. Electrek said some Uber drivers are realizing savings of more than $160 per week due to not having to pay for gas. One Uber employee out of Boston said he would typically pay $25 to $30 per day for gas. The hope is the savings on gas will afford Uber drivers the extra funds to rent a Tesla. However, to make the program even more appealing, Uber provides an additional $1 for every trip in an electric vehicle. Uber drivers can make up to an additional $4,000 per year with the extra money that's provided per trip when they drive an EV. Uber has also pointed out 95% of its drivers who are renting Tesla's EVs at Hertz have never driven an electric car for their job before. Moreover, Uber said 92% of the drivers who have used the program are now considering purchasing their own electric car.
32 AUGUST 2022 AUTOBODY NEWS / autobodynews.com
culture, he said. He spoke at several Indiana Auto Body Association chapter meetings last year to share details about his company’s apprenticeship program, including how it’s structured, the check-off lists of what apprentices need to learn and how to find apprentices, not just through auto body job boards but those for construction and plumbing, etc. “Because there are people in those trades who are having a bad day or are looking for another industry,” Tylka said. “What shocked me was through all the chapter meetings, there were only two shops that had a structured apprenticeship program. All the others were deterred from getting apprentices because they just didn’t know what to do with them. “I think that’s what the industry needs is at least some kind of guideline to give a mom-and-pop shop some direction as to apprentices other than just putting a kid with a technician and hoping they learn something,” Tylka said. “I’m hoping as our apprenticeship develops to share that within Indiana, and that will start to have a snowball effect.”
Repairify Acquires ATG Repairify™, Inc., a portfolio company of Kinderhook Industries, LLC, on July 6 announced the acquisition of Automotive Training Group (ATG), a leading technical training company known for its unmatched curriculum and experienced instructors. With live and virtual classes offered in all 50 states and internationally, ATG is dedicated to automotive professionals by offering highly technical training backed by quality instructional materials and experienced educators. Founded in 2004, ATG has found success in the market by presenting its technical courses in an understandable and interesting manner that challenges even the most experienced technicians. Curriculum is developed with a diagnostic approach, combining OEM support information with real-world technician experience using actual case studies where possible. Source: Repairify, Inc.
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CAA Says a New Kind of Insurer Steering is Impacting the Industry by Ed Attanasio
The California Autobody Association (CAA) recently held a one-hour Zoom meeting with the California Department of Insurance (CA-DOI), covering a handful of topics of interest to the entire membership. One particular subject that has been a pebble in CAA’s shoe for several years was brought up again during the meeting. You might be thinking that pebble was illegal steering, but you’d only be half right. When we talk about steering in this industry, it’s usually about insurers trying to persuade consumers to take their vehicles to DRP shops, because those shops offer the insurer more attractive labor rates, and in many cases, a promise to use the lowest priced parts available. Instead, this is about “parts steering.” Parts steering is where insurance companies search a multitude of different online vendors scattered across the country to find each part at the lowest price, and then cap
payment on their estimate based on that price. Sound reasonable? Monte Etherton, chairman of the CAA State Legislation Committee and state board member of CAA’s San Diego chapter, has been monitoring this situation for years and doesn’t think it’s reasonable at all. “Here’s an analogy,” he said. “Your 8-year-old car needs some work, so you take it to the dealer and they give you an estimate for $3,500. You tell them you’ll get back to them. Their estimate lists five parts that total $2,000 of the $3,500. Since you want to save some money, you start scouring the internet for those parts. “You find the cheapest parts from five different online stores, and all offer free shipping. Buying those parts instead of the parts from the dealer will save you almost $500. You make a neat list of all the store’s phone numbers and the prices and take it back to the dealer and ask them to buy the parts they need from those places so you can save some
money. What do you think they would do?” Etherton cites “parts steering” as a major problem in the industry. “Some insurance companies will only pay us based on the price of the cheapest parts, so they are literally forcing us to buy certain parts from their vendors or lose money,” he said. “I did one job on a Volkswagen where the insurance company’s estimate had an aftermarket headlight from an out-of-town vendor, because it was cheaper than my local aftermarket supplier,” Etherton said. “I emailed them that they can’t require me to buy a part from a specific supplier, and they replied with this fallacy: ‘We can’t tell you where to purchase your parts, but we don’t owe more because you select a different vendor.’” In 2018, CAA received a written legal opinion from the CA-DOI in response to questions regarding several industry problems, including parts steering. Two paragraphs from the opinion explain how parts steer-
ing is related to customer steering, which is illegal in California: “No insurer may require that an automobile be repaired at a specific automobile repair shop. (Cal. Ins. Code §758.5(a)). If the claimant elects to have the vehicle repaired at the shop of his or her choice, the insurer may not limit or discount the reasonable repair costs based on charges that would have been incurred had the vehicle been repaired by the insurer’s preferred shop. (Cal. Ins. Code §758.5(d)). As a result, by refusing to pay any reasonable price for a replacement part that is higher than the price quoted by the insurer’s preferred parts vendors, the insurer is limiting or discounting the reasonable repair costs based on the charges that would have been incurred had the vehicle been repaired by the insurer’s chosen repair shop thereby preventing customers from using the repair shop of their choice and preventing the policyholder from using any shop other than those shops that purchase their replacement crash parts from the pre-
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ferred parts vendors of the insurer. “Limiting or discounting the reasonable repair costs based on the charges that would have been incurred had the vehicle been repaired by the insurer’s chosen repair shop is a violation of Insurance Code section §758.5(b) (3) and would constitute a violation of the Unfair Insurance Practices Act. Cal. Ins. Code §758.5(f). That is, if an insurer limits or discounts the reasonable repair costs based upon the replacement part prices available from a certain parts vendor, the insurer would effectively prevent a customer from using the automobile repair shop of his or her choice in violation of Insurance Code section 758.5(b) (3). An insurer would, however, be permitted to reasonably adjust a collision repair shop’s written parts price estimate for any part, including new OEM crash parts, if the insurer demonstrates that the price charged by the repair shop for the replacement part is “unreasonable.” 10 CCR §2695.8(f).” This opinion was also a topic of the Zoom meeting. Both the DOI’s deputy commissioner and the
Claims Services Bureau chief urged shops experiencing this problem to send a copy of the DOI letter to the insurer with their supplement. Miscategorized Parts There is another facet to this problem. In California, the law requires shops only list parts on their estimate as new, used, reconditioned, rebuilt, an OEM crash part or a nonOEM aftermarket crash part. Insurers are also supposed to follow these regulations when writing estimates, but some do not. “A few months back, we had a 2021 Mercedes in the shop,” Etherton said. “It only had 1,000 miles on it and was hit pretty hard in the right suspension. The customer’s insurer specified 13 used, non-OEM or reconditioned parts from six different vendors located in California, Texas, Michigan and Oregon. The parts’ prices ranged from about $10 to $1,000. “Some of the part descriptions were really questionable, like a reconditioned upper control arm and a reconditioned engine cradle, and a used wheel that was also refur-
bished. By law, we have to be crystal clear about parts with our customer, but how can I do that if I don’t even know what they are?” Etherton continued. “And none of these parts had a manufacturer’s warranty, something we would get if we bought them from the dealer. We ended up losing that job because we believed new genuine factory parts belonged on that car, and the customer didn’t want to pay the difference. She did tell me she was changing insurance companies though.” The Difference Between Opt-OEM Parts and Genuine OEM Parts Many parts on insurers’ estimates have been miscategorized with such terms as “alt-OEM”, “opt-OEM” and “surplus-OEM.” In reality, these parts may be over-production, blemished or damaged OEM parts. One thing they all have in common is none of them carry the original car manufacturer’s warranty. Every part sold by every vehicle manufacturer has a manufacturer’s suggested retail price (MSRP), which is the price a shop charges for the part. In contrast, opt-OEM
parts do not have an MSRP, only a cost. When a part does not have an MSRP, insurers will allow a “markup,” usually 20%. Etherton thinks he knows how opt-OEM came into existence. “Let’s say a shop buys a bumper from a Chevy dealer that has an MSRP of $200, and the shop gets it for $140 wholesale. The shop will make a $60 profit,” he said. “Let’s also say an opt-OEM vendor—maybe a wrecking yard— has bought 50 of those bumpers on the gray market for $120 each. They offer the bumper to insurers for $150. The insurer marks the part up $30—20%—for the shop. The insurer now gets the $200 bumper for $180, but the shop loses half their profit, the shop’s Chevy dealer loses a sale and the customer loses the Chevy factory warranty because the shop didn’t purchase the part from the dealer. Who wins here?” Another issue is some vendors are mislabeling their parts to gain an advantage with insurers. “Something else we see is when the vendor lists a bumper cover as a used part when it’s actually a new
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‘surplus part,” Etherton said. “Many new factory bumpers are raw plastic, which requires a special prep to make the paint stick. That prep costs about $100. Since a used bumper is already painted and wouldn’t need that treatment, the insurer won’t put the treatment on their estimate. The problem is, the bumper isn’t a used part, and the work still has to be done.” How Shops Choose Which Vendors from Which to Purchase Parts Just like any business, body shops must choose their vendors carefully. Shops need to know a vendor will be in business next month or next year if there’s a problem. They need to deal with experts that will send the correct parts the first time, quickly and at no charge, whether that part is a $2.50 fastener or a $700 aluminum hood. Another problem Etherton brought up is the logistics of adding unnecessary vendors to his shop’s bookkeeping system and staff. “Most online vendors limit what they sell to big-ticket high-volume parts, so they can’t fill a complete
order,” he said. “If you buy from one, you either have to pay COD or have an open account, right? Any body shop worth its salt has charge accounts with their vendors because you can’t afford to write a check for each invoice and have $100,000 tied up before you get paid. “Not being able to use our regular vendors means we have to pay upfront for the parts, either by check or credit card,” he said. “And when I call these vendors to see if they really have the part, I usually spend at least five minutes on hold waiting for people to answer the phone. Probably half the time they either don’t have the part, it’s not what they said it was, or they won’t deliver to our area. “And if you do buy the part and it’s wrong, they already have your money,” Etherton said. “Hopefully they’ll give it back, but you need to pay return shipping and wait. “The other option is to open an account with each of these vendors. Now if you know anything about bookkeeping, we already have like 50 various parts vendors on our list. If we had to add a new vendor to our
database for every time an insurance company found a cheaper part, we’d probably have 200 more vendors, and who’s going to keep track of that? Two hundred credit applications? Two hundred more monthly statements to reconcile? It’s ridiculous.” Doing the Insurance Adjuster’s Job Another subject discussed during the CAA CA-DOI meeting was how insurers are requiring more and more documentation from shops before they will pay the claim. The documentation is in the form of damage photos, work in process photos, purchase invoice copies and more. “What happens is that we have a customer who wants us to fix their car, so we write an estimate and send it to their insurance company,” Etherton said. “Now some insurance companies review our estimate and pay it to the penny, while others cut the estimate no matter what you send them. And it’s not uncommon for an insurer to start off low at $2,000 and end up paying an actual cost of $8,000. “I think the insurers that cut es-
You’re Going To
U.S. Economy Has 11.3 Million Unfilled Jobs by Casey Harper, The Center Square
There are 11.3 million open jobs in the U.S., nearly two jobs for every American seeking work, according to newly released federal data.
That rate is nearly the highest on record as the number of available jobs per worker has sharply risen in recent months. The Bureau of Labor Statistics released the federal jobs data, which showed a decrease of nearly half a million available jobs in May. “On the last business day of May, the number and rate of job openings decreased to 11.3 million (-427,000) and 6.9%, respectively,”
BLS said. “Hires and total separations were little changed at 6.5 million and 6.0 million, respectively. Within separations, quits (4.3 million) and layoffs and discharges (1.4 million) were little changed. This release includes estimates of the number and rate of job openings, hires and separations for the total nonfarm sector, by industry and by establishment size class.” The job openings vary largely by industry and the size of the business. “The largest decreases in job openings were in professional and business services (-325,000), durable goods manufacturing (-138,000) and nondurable goods manufacturing (-70,000),” BLS said. “In May, the job openings rate decreased in establishments with 250 to 999 employees. The quits rate decreased in establishments with 250 to 999 employees and in establishments with 5,000 or more employees.”
36 AUGUST 2022 AUTOBODY NEWS / autobodynews.com
timates are just trying to make our job so difficult that we will give up and accept their lowball offers,” he said. “They want pictures and copies of everything, and as I said before, whatever the lowest part prices they can find on the internet is the most they will pay us for the parts we need to fix the car.” Etherton’s main point is this--other than allowing the insurer to inspect the car at his shop, he has no obligation to them to document anything. The obligation he does have is to the vehicle owner. “The law says if I fix your car, we will have a contract between us, which is my estimate,” he said. “I give you the estimate, and then you authorize the estimate so it becomes a work order. So, I repair your car based on that work order. If I don’t follow that work order while repairing your car, then I have committed fraud and could lose my license. “Even though these insurance companies have the right to inspect the damaged car, they choose not to. It’s easier to deny the claim from a distance than it is in person.”
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Industry Insight with John Yoswick
—John Yoswick is a freelance writer based in Portland, Oregon who has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.
DataTouch Offering New Service to Help Collision Repair Shops Manage Access to its Data
Pete Tagliapietra is sympathetic to buying parts from, and at what price. collision repairers whose customers It also shows what kind of cars the have found accident information shop repairs, and what cars the cuswith Ed Attanasio about their car on a vehicle history tomers in that geographic area buy report. and drive.” But Tagliapietra said that’s only All that, Tagliapietra said, is a small subset of what he sees as a even aside from the customer’s much larger concern of shop esti- personal identification information mate data being obtained, used and on the estimate, which a growing sold by unauthorized withthird Ed parties. Attanasio number of states have mandated “It’s my belief that most shops businesses take adequate steps to are oblivious to how much estimate protect. information is being scraped off their “If I owned a body shop, I computers, giving third parties a wouldn’t want third parties to know wealth of knowledge about how that all of this—how I run my business shop does business,” said Tagliapi- and with whom—and to be able to etra, founder of the newly-launched use it or sell it without my authoriwith Ed Attanasio DataTouch, LLC. “Even just a small zation, and clearly even in ways that set of a shop’s estimates tells some- are not in my best interest,” he said. one whether or not the shop has Tagliapietra said it’s his belief DRPs, and if so, which ones. It tells “the CARFAX issue”—estimates them the labor rates the shop has resulting in entries on a vehicle’s negotiated withwith different Ed insurance Attanasio history report—and all the other companies. It shows who the shop is third-party use of shop information
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are the result of thousands of “data pumps” running on shop computer systems across the industry. “Data pumps have become prolific,” Tagliapietra said earlier this year. “It’s gotten out of hand, from my point of view, because the data has become so valuable. Most shops probably have an unauthorized data pump, or more likely multiple data pumps, that are sucking the repair line information and personally identifiable information off of every estimate they write.” A shop may have authorized the installation of some or all of the data pumps running on its computer system, because they can help automate some shop processes, such as sourcing alternative parts, subletting repairs or materials. In other cases, the shop may not be aware of a third-party vendor installing a data pump, or that a data pump installed
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by a company the shop is no longer doing business with continues to scrape estimate data from the shop’s computers. “But the data pumps themselves are only the first part of the problem,” Tagliapietra said. “The real issue is that shops can’t control what portions of an estimate get scraped by those data pumps. A parts vendor doesn’t need your labor rate information or the customer or insurer name nor even the entire VIN, yet they get all that. A CSI provider doesn’t need anything other than the basic customer contact information, yet they get all the estimate line items and subtotals. A remote scanning company doesn’t need anything other than the complete VIN to identify the specific vehicle and the ADAS functions on that vehicle. See DataTouch Offering, Page 39
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autobodynews.com / AUGUST 2022 AUTOBODY NEWS 37
Life Coach Uses Different Approaches to Help Auto Body Shop Techs, Owners, Managers by Ed Attanasio
Claudia Morgillo has multiple titles, including certified professional leadership coach and trainer. She and her husband own six Fix Auto locations in the Ontario, Canada, area, two Novus glass companies and a centralized head office.
As a woman and a leader, what communication and other skills you’ve developed over the years to be a manager in a male-dominated industry?
I have developed a lot of processing modalities, including learning how to communicate, train and motivate the people that I work with while being a female in this industry. I think as a woman, knowing how to communicate with different people in general is a real plus. My dad has been in the industry for almost 50 years and he introduced it to me; I followed him around at a young age and later worked alongside him in his jobber business. At this point, I’ve been in collision repair for more than 25 years. Thirteen years ago, my husband, Claudio Chiodo, and I purchased our first body shop, and have grown from that point on.
went back to learn how to build and for them? Do they want to be reuse the tools needed for these essen- trained and stay in our industry? So, my concerns will always tial skills and, most notably, the neuroscience behind them. come back to what we need to do I became a professional coach to find, hire and train all of these and a leadership trainer to motivate people and keep them motivated. all these people individually. Every Because as much as we want to conperson requires a different approach, tinue moving forward and pursue all so if you try to treat everyone the of these new advancements being same, it will likely fail. I have de- thrown at us, we can’t just tell peoveloped tools that are tried, ple they need to move forward. tested and true. But in the It’s about how do we end, it comes down to peosupport these people to do ples’ motivations and how these things? That’s always they feel appreciated. How my main concern—the peodo they understand caring, ple part of it. How do we because everybody underClaudia Morgillo keep them engaged and instands caring differently? Everybody’s going to helps body shop pro- terested in training that’s succeed respond to buy-in in their infessionals changing with the times and an ever-changing own way, so how do I crestill be motivated without industry ate that for them? That’s my getting exhausted? That approach—it’s individualized and is my concern for this industry bethat’s why I went back to school to cause everything else seems to fall find out about how I can achieve that into place if we can do that. for all these people. I’ve been doing How can you help shop ownthat for more than five years now full-time within my organization ers and managers to retain and for external clients as well. their workers with poaching ramI have also been working close- pant in some areas of the country? ly with David Luehr at Elite Body Shop Solutions, as well as different I tell people it all starts industry leaders, and owners of othwith leadership, including er shops to help them identify and self-leadership. So, we are ideally build their skills and grow into being going out into the world and showan MSO or whatever they’d like to ing other people what we’d like them to see and know about us, do. which of course, takes a lot of self What are your three main awareness to be developed. If we concerns about the collision can’t lead ourselves, we can’t effecrepair industry? tively lead others. So that’s why I help and support Everyone is talking about shop owners and managers by showsupply chain issues, hiring ing them how to lead themselves apand retaining good people, and how propriately. People want to work for to fix today’s sophisticated vehicles. empowered leaders and learn from My perspective on this is that it will them. If you’re leading by example, always come back to people. your people will follow you through Years ago, someone shared an good times and bad times. equation with me that said, “ProThe main causes of stress are cess plus people equals profits.” I often due to a lack of skills in those thought, what does that really mean? areas. For instance, weak time manSo, the process part is self-ex- agement skills are often a result of planatory, right? We’re always con- poor self-regulation and awareness. stantly looking at process building In my opinion, productivity is most and tweaking processes, but what often affected by gaps in someone’s are people doing about that? communication skills. You never get to check the box Those things get in people’s because it’s all about training, re- way, sometimes regarding attitude training and retaining people in this and knowing how you show up in industry. Where are their mindsets the world. How do you turn some-
How do you motivate your people? Do you take different approaches with each person?
Four main groups are impacting our industry—Generation Z, ages 7-22 (born between 1997 and 2021); Millennials, ages 23-38 (born between 1981 and 1996); Generation X, ages 39-54 (born between 1965 and 1980); and our Boomers, ages 55-73 (born between 1946 and 1964). I went back to school and earned a lot of different training and coaching certifications to help and support my teams through the real challenges our industry was facing. In the end, it comes down to attaining the right skills to motivate people in general. For instance, how do you create buy-in, build comfort and trust, and all those things? So, I
38 AUGUST 2022 AUTOBODY NEWS / autobodynews.com
one’s perspective around when things are getting hard? Because we all get there eventually, but how we choose to go forward can make or break an entire day for some shops. So, it’s about creating that self-awareness and giving them tools they can put in their toolbox so that when they do get in the thick of it, they will be OK to get through successfully.
Why do some shops excel and others struggle?
I think it pretty much goes into that same sentiment, that some shops struggle because of culture and a lack of self-awareness. I feel it always comes back to culture. You can have all the OEM certifications and DRP relationships you like within your business, but if your team doesn’t know your organization’s “why,” they will sometimes struggle to understand “why” they are doing what they are doing every day, week, month and year alongside you. That’s trouble if they don’t know why they’re there and the culture isn’t being solidified. They know what they’re there to do and nothing more; that is where you run into gaps. I can see that some shops struggle because they don’t have the shop’s culture on their radar and don’t know what they don’t know. So, they don’t even know what is not working because they don’t even know what to look for. Ideally, we need to ask some basic questions. How do we communicate with each other? How do we want to communicate with each other going forward? Why do “we” choose to repair cars as a career? Do we feel like a team? What does our ideal team look and feel like? These are just some of the possible empowering questions we ask our teams to help support and build better cultures within our organizations.
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DataTouch Offering “Too much of a shop’s information is going to too many third parties---often without the shop’s knowledge or consent---and that information has significant value to those companies that can get it.” Tagliapietra founded NuGen IT and sold that company to OEConnection in 2020. He is launching DataTouch this summer as a potential solution for a shop that wants to get a better handle on who has access to its data. For a one-time fee, DataTouch can audit a shop’s computer system to identify what data pumps are operating on it. “They’re often hidden well enough that unless someone knows what they’re looking for, they’re not going to find them,” Tagliapietra said. The shop then has the option to subscribe to the DataTouch monthly service, which enables the shop to administer by trading partner which portions of estimate data go to each third party. A recycler, for
example, may only receive a parts list and the year, make and model of the vehicle, and the first 11 digits of the VIN. “That’s enough information to run it through a parts exchange and supply the part,” Tagliapietra said. “When a shop picks up a phone and says, ‘I need a left front fender for a 2004 Chevy Tahoe,’ the recycler doesn’t say, ‘Give me the VIN.’ So why when ordering electronically does the shop send them the entire estimate and all of that information?” DataTouch also will assist a shop in deleting data pumps that are obsolete or not approved by the shop. Tagliapietra said he believes DataTouch will put collision repairers back into better control of their estimate and business information, and better able to protect their customers’ privacy as well. “We can help shop eliminate the possibility of trading partners sharing repair information to unauthorized entities, such as vehicle history reporting companies and so much more,” he said.
Classic Collision Announces Acquisitions in Texas, South Carolina Classic Collision, LLC, a leading national multi-site collision repair operator based in Atlanta, announced two new closings June 24—the acquisition of Jones Auto Wrecking Company in Florence, SC, and Gabe’s Collision Center in San Antonio, TX. Jones Auto Wrecking has been in business for more than a century. “We’re proud to be the oldest, most-trusted auto wrecking company in Florence, SC. Our company is rooted in family values and customer satisfaction, and we look forward to serving the community under the Classic name,” said Stewart Jones, former owner of Jones Auto Wrecking. Gabe’s Collision Center’s friendly staff and expert technicians have been serving the San Antonito area for almost a decade.
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autobodynews.com / AUGUST 2022 AUTOBODY NEWS 39
Industry Insight with John Yoswick
—John Yoswick is a freelance writer based in Portland, Oregon who has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.
What Your Auto Body Shop Needs to Know to Be Ready to Repair EVs
The Alliance for Automotive In- Many shops in the past have had novation reported in June almost to upgrade the electrical service to 200,000 electric vehicles were sold their building in order to accommowith Ed Attanasio in the first quarter of this year—a date the power needs of some weld4.2% increase over the previous ing equipment. Putting in one or quarter—representing 5.9% of over- more EV charger stations will likely all light-duty vehicle sales. Is your require yet another upgrade. shop gearing up to repair them? “The answer they are mostly Repairers, trainers, automakers getting [when shops inquire about and others participated a recent any necessary electrical upgrades] with Edin Attanasio panel discussion at the Collision In- is: You only have just enough power dustry Conference (CIC) about what coming into the building to run the EVs will mean for auto body shops. things you have there right now,” Here are some of the highlights from said Bob Augustine, co-chair of that discussion. CIC’s Emerging Technology Committee hosting the panel discussion. Consider Your Lifts with Ed Attanasio “The normal two-post lift is not go- Other Possible Changes to Processing to be the future, in my opinion,” es and Facility said Virginia shop owner Barry “It’s a lot of Go-Jaks,” Dorn said Dorn, whose company is certified to of the dollies needed to move EVs repair a number of automaker’s EVs. around the shop once they have His reasoning: Shops a lift been powered down for repairs. “We withwill Ed need Attanasio that can be used when an EV’s main had to reconfigure the drains in the battery pack need to be removed. floor because they get caught up “When you consider the width on that. We had to reconfigure our of the battery you are going to take paint booth because you’re pushing out, at least for the Audi brand, the a dead vehicle. There are literally batteries are the size of a queen-size times we have to have a tow truck mattress and weigh to 2,000 pull an EV into the booth.” withclose Stacey Phillips pounds,” said Mark Allen of Audi Shops also need to know what of America. “So you’re going to EV repairs require powering down need a lift that has at least 67 inch- the vehicle. Even something as es between the posts. Not the arms, seemingly minor as paintless dent the posts. And then a flat floor un- repair (PDR) may require de-enerderneath so youwith can get a lift table gizing the vehicle, Dorn said. Stacey Phillips underneath.” “Depending on the vehicle, there are some areas that are literally right Expect to Need a Power Upgrade beside a fender or right under the hood
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that are very close to areas you don’t want to be,” Dorn said of PDR. Trying to Save Money Could Cost You Jason Norman of Enterprise RentA-Car said he’s seen instances of people thinking they can reduce the cost of charging cables or adapters by getting one available online at a quarter of the cost of the OEM part. “It’s very tempting, and it turns out they look very similar,” Norman said. “But the reality is this is one of those times when the OEM equipment and procedures are critically important. A lot of those [cheaper] adapters and cables don’t have the embedded technology to do things like measure heat and current. So you end up with significant problems.” The panel shared a photo of the charred remains of electrical con-
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As the automotive industry ramps EV safety instruction inup its commitment to electric and cludes learning how to safely hybrid vehicles, I-CAR continues disconnect high voltage systems, to expand its leading EV curric- confirming zero potential, and ulum with a first-ever, five-day initializing high voltage systems EV hands-on skills development following repairs and service. To register for this new course at I-CAR’s new Chicago with (CTC) Stacey Technical Center in Phillips Ver- five-day hands-on course, visit I-CAR.com. non Hills, IL. The new course, taught by I-CAR’s bench of EV experts, Source: I-CAR will serve as the capstone to eight prerequisite EV courses for collision repair professionals.
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40 AUGUST 2022 AUTOBODY NEWS / autobodynews.com
nectors inside a charging system installed some years ago by a California shop. The heat involved in EV charging also can lead to expansion and contraction, which can loosen connections over time. “There is a certain amount of maintenance you’re looking at on these chargers,” said Oregon shop owner Ron Reichen. “You have to go in and retighten things from time to time.” Darrell Amberson said his multi-shop collision repair company in Minnesota repairs a lot of EVs, and it’s not something shops should avoid. “It’s no big deal. We’re still fixing cars,” Amberson said. “But on the other hand, it does require a difference from the start to the finish of the process. And every person in the organization has to have some different understanding, especially in terms of safety.”
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Why Online Customer Reviews Are More Important than Ever by Ed Attanasio
Every transaction has a value in terms of both human resources and money, and online reviews from customers play a significant role in both for any business. Many auto body shop owners and managers use review sites to connect with customers and get feedback. But many are still skeptical about the authenticity of the reviews posted. Before the online consumer review industry gained momentum roughly 18 years ago when Yelp was founded, people had to rely on recommendations from friends, neighbors and associates. Word-of-mouth worked pretty well, but now we can access hundreds of reviews within minutes, rather than polling the mailman or the checker at your grocery store for the best restaurants, movie theaters or body shops. As a body shop owner or manager, ultimately, all you want is to acquire new customers, retain existing ones and increase revenue. But like many, you’re probably a little overwhelmed by the speed at which technology evolves and how to respond to it. Recently, I saw this powerful quote from the Harvard Business Review: “Many companies need to dramatically shift their marketing strategies to account for the rising power exerted on future customers by the opinions of existing customers.” I had a friend who used to say opinions are like a certain orifice we all possess. It still applies, but now everyone’s opinions seem to count more than ever, especially online. For companies that do an exemplary job and garner high CSI ratings as a result, online review sites are a wonderful thing. On the other hand, what happens if you’re a good company, but you’re not getting a significant number of accolades from the public—or, worse, negative bogus reviews from competitors and disgruntled former employees? Megan Fulkerson, managing partner and strategist at 3P Marketing in Evansville, IN, works with body shops and other small businesses on their online reviews and
how to set them up for success. “While managing reviews can seem daunting, taking care of your customers and providing safe and proper repairs is what we try to do every day,” she said. “Taking things one step further and by having CSRs or estimators ask the customer to
Megan Fulkerson of 3P Marketing said shops that have negative reviews and do not acknowledge them appear to not care. She suggests responding to every review, positive or negative
provide a review is a great way to have current responses added to your list of online reviews.” Online reviews are crucial in the collision industry because people want to be comfortable before they trust a body shop with their vehicles, Fulkerson said. “The collision repair industry is especially important because vehicles are most commonly the second largest asset one possesses in their lifetime. For most, it is critical to the success of their day—ensuring the kids are at school and they make it to work on time,” Fulkerson said. “Because of this heightened importance and cost endured when getting collision repair, many are extra hesitant to entrust their vehicle at a shop that does not have recent and good reviews.” Fulkerson said shops always need to respond to reviews, both positive and negative. “Another important aspect of getting reviews is responding to them,” she said. “The only opportunity we have as a business owner to dispute a review is to leave a response. By remaining cool and calm but potentially shedding some light onto the negative experience mentioned, you can show that you stand by your work and will always make it right. “Businesses that have negative reviews and do not acknowledge
42 AUGUST 2022 AUTOBODY NEWS / autobodynews.com
them appear that they do not care,” she said. “While many aspects of marketing and advertising are evolving, the need for good reviews remained unchanged.” Those shops that embrace online reviews and pursue new marketing techniques such as geofencing, SEO strategies and digital advertising are excelling, Fulkerson said. Here are some more interesting numbers and analysis from ReviewTrackers: Google remains the No. 1 review site of choice. Nearly 64% of consumers say they are likely to check Google reviews, through Google Maps and Search, before visiting a business location—more than any other review site. Yelp ranks second at 45.18%, followed by TripAdvisor and Facebook. Google’s review growth is driven by the volume of zero-click searches, which rose to 65% in 2020. By showing review snippets and star ratings in organic search results without having to send users to a third-party website, Google
has effectively cut in line ahead of other websites in the online reviews space. Eighty-eight percent of all reviews come from only four review sites—Google (73%), Yelp (6%), Facebook (3%) and TripAdvisor (3%). Approximately 75% of new business is influenced by only a handful of business review sites and directories: Google, Facebook, Yelp, TripAdvisor, Apple Maps and Bing Maps. Review interaction is up by 50% from pre-pandemic levels. It’s one of the many signs demonstrating consumers’ heightened sensitivities about where to go or what to purchase in the wake of the pandemic. If your shop is missing the boat when it comes to sites like these, I would suggest to not try to do it yourself. Hire a knowledgeable company that specializes in leveraging these review sites to deliver solid leads and increase your car count.
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Southeast Collision Conference Brings Together 3 State Associations, Industry Speakers (CCA), Gulf States Collision Association (GSCA) and the Tennessee Collision repair skills training, live Collision Repairers Association product demonstrations and the (TCRA). “It was really good seeing John Eagle Honda Fit vehicle were all part of the Southeast Collision shops coming together,” said Josh Conference, held June 23-25 at Kent, executive director of CCA, the Gateway Conference Center in GSCA and TCRA. This was the first time the associations gathered for a Richburg, SC. conference in person since the pandemic. “The event exceeded our expectations,” said Kyle Bradshaw, president of CCA and director of Fixed Operations at K&M Collision. “We had a great time and I’ve had a lot of really good feedback.” Pictured, left to right, are Josh Kent, executive director of The goal of CCA is to CCA, GSCA and TCRA; Chris Hedrick, general manager of better the collision repair inStatesville Collision Center, named “Most improved shop dustry. The nonprofit orgaof North Carolina;” Marc John, from Statesville Collision nization focuses on continCenter, who was named Technician of the Year; and Kyle Bradshaw, president of CCA and director of Fixed uous improvement through Operations at K&M Collision training and support for The event, held in partnership members and business partners to with Assured Performance Network facilitate safe and correct repairs for and Collision Hub, was hosted by consumers. Bradshaw said some of the the Carolinas Collision Association by Stacey Phillips
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On the first day of the event, Collision Hub held a training day, with more than 80 attendees. Kristen Felder, COO of Collision Hub, discussed negotiations and total loss claims, and Rachel James, financial advisor and field director for Northwestern Mutual, provided a high-level overview of body shop finance and employee payment/retention plans. Felder said the goal of a Collision Hub training event is to give shops unfiltered access to problem-solving techniques and strategies. This includes how shops can reduce stress, frustration and anger while translating that into still recovering more monJosh Kent arranged to have the John Eagle Honda Fit ey per repair order (RO), vehicle on display, sponsored by Intrepid Direct, to and turning total loss vehiremind attendees what can happen when vehicle repair cles into a profit center that procedures aren’t followed supports the shop’s growth Platinum conference sponsors with a healthy net profit. “We take years of experience in included Calibrators of the Carolinas, Lombard Equipment and Shop- claims and claims training to presFix. ent the tactics and strategies that are larger collision repair conferences can be intimidating and many people don’t have the luxury to take off time and leave their businesses to travel across the country. “People have a desire to better themselves and that is really the goal of the conference,” he said. “We felt like we definitely accomplished that and we’re excited about the momentum we have.”
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proven to work while giving them a new perspective through collision repairers,” she explained. Following the training day, an awards ceremony was held that evening, recognizing local association members. “We wanted to celebrate the people who are in the shops and doing the actual work,” noted Kent.
• Detailer of the Year: Zach McClure, Starnes Collision Center in Charlotte, NC • Estimator of the Year: Michaela Hood, Galeana Body Shop in Columbia, SC
Over the next two days, more than 30 vendors showcased their products and services. On the last day of the conference, three skills competitions were held, focused on paint, Award winners included: welding and estimating. The winners received $1,000 each. They • Most improved shop of North Car- included Andrew Speight (paint), olina: Statesville Collision Center, Ben Donahoe (welding) and Will in Statesville; Chris Hedrick, gener- Barkley (estimating). al manager The paint and welding competitions incorporated virtual reality equipment sponsored by Robbie Lynch from Fayetteville Technical Community College. The paint competition was sponsored by PPG, welding was sponsored by Autotality, and Spark Underwriters sponsored the estimating Andrew Speight received the award for the paint competition, which was competition judged by Mike Anderson. • Most improved shop of South CarAttendees also had an opportuolina: Prestige Collision Services in nity to network. Pendleton; Shane Isbell, owner “The camaraderie and network• Most improved shop of Missis- ing aspect is something that I was sippi: Richie’s Collision Center in really pleased with,” said Bradshaw. Hattiesburg; owners Richard and “There was a lot of really good feedTracy Lewis, who is also president back as far as the connections made of GSCA and people realizing that they are • Most improved shop of Tennessee: not the only ones having this issue Wallace Collision Center in Bristol; John Baker, manager • Technician of the Year: Marc John, Statesville Collision Center in Statesville, NC • Painter of the Year: Kirt Martin, Palmetto Paint & Body in Camden, SC • Customer Service Representative of the Year: Ashley Stukes, Big Ben Donahoe won the welding contest Chris Collision in Aiken, SC
or problem.” A unique feature of the conference was the inclusion of the John Eagle Honda Fit vehicle, sponsored by Intrepid Direct. Kent arranged to have the car on display to remind attendees what can happen when vehicle repair procedures aren’t followed.
themselves, it’s a shame,” said Kent. “Being able to provide that education to others helps make people better,” added Bradshaw. “My biggest thing is everybody realizing that they can be better tomorrow than they were today.” Kent said all three of the host associations are growing and CCA is one of the more active associations in the U.S., planning four quarterly meetings a year, as well as educational classes. As executive director, Kent said one of his goals has been to emulate the Society of Collision Repair Specialists (SCRS) and how close that organization’s board is. Will Barkley received the top prize for estimating “That was one thing I The Honda Fit was part of the wanted to take note of—to bring my John Eagle lawsuit in which the board together,” he said. owners of the vehicle were awarded As a result, yearly retreats are $42 million by the John Eagle deal- held, which he has found to be sucership in Texas related to injuries cessful. sustained due to faulty collision re“I visit conferences all over the pairs. United States and they are all good “It’s an epidemic in this indus- but our vibe in regard to the closetry that repair procedures aren’t fol- ness of our people feels different,” lowed,” said Kent. “There are a lot said Kent. of excuses in this industry on why we can’t do things right. People Upcoming Events: need to be reminded that people’s July 28: Danny Gredinberg, website lives are at stake.” “Everyone’s heard about it but administrator at Database Enhanceto actually see it in person makes it a ment Gateway (DEG), will speak in little more real,” said Bradshaw. “To Baton Rouge, LA, at the Automotive realize the result of our decisions Technology Center at Baton Rouge and the role that those play Community College in the safety of human be- Aug. 4: Mark Olson, CEO of Veings was really impactful. I hicle Collision Experts, will speak think it’s probably opened during the TCRA meeting at Chattasome people’s eyes.” nooga State Community College in A variety of education- Tennessee al classes were also offered during the event. For more information about the as“Education is important sociations and these events, contact and for the 90% of the in- Josh Kent at oregon.josh.kent@ dustry that doesn’t educate gmail.com.
Industry Speakers Share Insight During SCC A variety of educational classes were held during the Southeast Collision Conference, featuring top industry speakers. Here are highlights from three of the presentations that took place at the event, held June 2325 in Richburg, SC, and hosted by CCA, GSCA and TCRA.
44 AUGUST 2022 AUTOBODY NEWS / autobodynews.com
Consumer Communication and Sales Kristen Felder, COO of Collision Hub, offered attendees communication tips in her presentation, “Shut Up! Consumer Communication and Sales.” Felder’s advice is to “shut up” and “ask questions.” “We all seem to approach a customer with an agenda---a pre-planned speech with all the informa-
tion we think they must know in order to make the decision ‘we’ want them to make,” she noted. Instead, she recommends taking the time to make a personal connection and asking people how you can help them and really mean it. “Stop lecturing them and start getting to know them,” she said. “No one wants someone to tell
them what they should and shouldn’t know.” Then, she advises shops to do whatever they ask, rather than what the shop wants or thinks should be done. “If you are the helpful place they feel they can land, they’ll trust you,” she pointed out. “If you’re not, they’ll trust the insurer. Their commercials are better than ours.”
A variety of educational classes were held during the Southeast Collision Conference, featuring top industry speakers
Felder said regional focused tradeshows are the only future for the industry. “Shops are overworked and understaffed every day,” she said. “The shops need to be close and specifically target their region with real information they can immediately implement.” She said regional shows allow experts to dial
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in and speak to shops, rather than speak in terms of the general industry. “This is what makes the regional shows, like the Southeast Collision Conference, so important to the industry and what makes the shops that attend so special,” explained Felder. “They’re not there for the dinner parties or a golf tournament. They are there to learn and improve. A small group of focused individuals can accomplish what 100,000 generalists could never do.” Becoming the Employer of Choice Dave Luehr, owner of Elite Body Shop Solutions, talked about “Becoming the Employer of Choice in Your Market.” To become a magnetic business that attracts top talent, according to Luehr, it requires learning and applying the five key elements of a magnetic business. These include meaningful work, acknowledgement, measurement, teamwork and goal guidance. “After studying outlier businesses that do not seem to be affected by the so-called ‘talent shortage,’ we have learned that any business that applies the five keys that we teach can soon find themselves the market’s main attraction for the best employees,” he said. Luehr said it was really nice to be back with the industry at the conference. “It is a very special conference for me, since I
have become close to many of the attendees,” said Luehr. “There was an overall feeling of excitement and freedom in the air after such a long pandemic delay. Personally, I felt like a caged animal being let out of my ‘COVID cage.’”
Kristen Felder, COO of Collision Hub, offered attendees communication tips in her presentation, “Shut Up! Consumer Communication and Sales
He said Executive Director Josh Kent and the associations involved did an incredible job putting the event together while bringing in many of the top trade show vendors and industry trainers. “I’m so proud and grateful to the people in
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these associations working together in a spirit of harmony for the good of the independent collision repairer,” he said. “If this conference was this good already, I can’t wait to be a part of it next year!” Sustained Success for Collision Repairers David Willett, chief underwriting officer at Spark Underwriters, discussed “5 Keys to Sustained Success for Collision Repairers.” Recognized as one of the top leaders at Universal Underwriters, Willett said the intertwine between the five keys is what makes them so powerful. The third key—Shareholder Intimate—is a topic he said is often skimmed over and misunderstood. “One aspect of it is that everyone in business
creates value—any shop that delivers vehicles, any paint company that provides paint, any parts supplier that provides components, creates value,” he explained. “We can argue if the value is adequate, appropriate or enough another time.” The question, according to Willett, is how much a business is able to keep of the value created—usually in dollars. “The more imperfect your market(s), the greater percentage you usually get to retain as compensation,” he explained. During his presentation, Willett also discussed how to use the insight of thought leaders and business groups to develop a well-defined smaller unique market. He noted the fifth key is about de-
Monthly Car Payments Are Soaring by Steven Symes, Motorious
One of the areas where people have really been feeling the pinch in the past year or so is car payments. Unsurprisingly, the average car payment in the U.S. reached an alltime high of $712 in May, according to Moody’s Analytics. While some might just shrug at such a figure, for some households that’s a crippling amount to be shelling out month after month. Helping contribute to the rising monthly car payments is the fact
the average new car was $47,148 in May, according to Kelley Blue Book. It wasn’t that long ago the figure was just a little over $30,000. And as you likely already know, it’s not like household incomes have increased by an additional 50% suddenly. Worse, rising costs for fuel, utilities, groceries and other essentials are making plenty of people feel like they’re in a financial vice, getting squeezed more and more to the point of breaking. A recent Cox Automotive & Moody’s Analytics vehicle affordabil-
velopment—both personal and professional—and said the goal is to get 5% to 10% better each year. Willett noted events like the Southeast Collision Conference are important for the development of an automotive professional’s business and industry knowledge. “It was a successful event with Josh Kent’s leadership, the strength of the CCA and two up-andcoming associations, Gulf Coast and Tennessee,” observed Willett. “The attendees were treated to a strong line-up of thought leaders and suppliers. It is a good thing too as collision repairers were looking to get better, including the many top-tier multi shop owners (MSOs) and single site operators (SSOs) in attendance.”
course the constrained supply of new cars, thanks in part to the microchip shortage. Demand for new vehicles is strong, causing prices to continue climbing. All this means it would cost the average household 41.3 weeks of income to buy the average new vehicle. That’s a 19% increase from May of 2021. These are sobering facts. Surely the market can’t continue to sustain this kind of price inflation, so something has to give, if not multiple things. Exactly what those would be is up for debate.
ity index report painted an even darker picture. Thanks to higher interest rates combined with more expensive cars, Americans on average can afford less. Quite literally, their dollars are buying less when it comes to vehicle purchases. Plus, increased lending rates mean they qualify for even less expensive options, a double hit which might mean a lot of shoppers are downgrading from one vehicle class to another while paying just as much if not more than before. Compounding the problem is of
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Collision Repairers Actually Lament Lack of Insurance Adjusters in Shops by John Yoswick
Aaron Schulenburg of the Society of Collision Repair Specialists (SCRS) said he was surprised by one of the findings of the association’s survey earlier this year asking shops about what changes could have a positive impact on their business.
Kyle Bradshaw of K&M Collision in Hickory, NC, said repeated in-shop interactions with insurance adjusters gave his company an opportunity to “educate” them.
“I never in a million years thought the response from a collision repair facility would be: Have more adjusters come back out to my shop,” Schulenburg said, noting multiple respondents shared such statements. During a Repairer Roundtable
panel discussion of the survey findings this spring, Kyle Bradshaw, director of operations for K&M Collision in Hickory, NC, said he understands the sentiment.
ington Metropolitan Auto Body Association (WMABA) said when the law in Virginia was being changed in 2016 to allow for photo estimates, the association fought hard to make
“I never in a million years thought the response from a collision repair facility would be: Have more adjusters come back out to my shop,” — Aaron Schulenburg “We spend a lot of time trying to educate insurance appraisers,” Bradshaw said. “So if it’s somebody who comes to our shop frequently, I don’t have to explain the same operations on every single job. However, [with remote claims handling] it’s basically like playing roulette; you don’t know who you’re going to get. It’s burdensome. It takes a long time. Fortunately, in our state, physical inspections are required. Our members have started to lean back on the administrative code: ‘Listen, you need to physically inspect the vehicle.’” Jordan Hendler of the Wash-
sure a caveat was included in the legislation that “if there is any disagreement with the repairer, then a physical inspection is required.” “That’s something we pushed for, and I’m glad that we did because that’s become really important in the last couple of years,” Hendler said. But later in the discussion, when panelists were asked what they think will not return post-pandemic, Andy Tylka of the Tag Auto Group, which operates 15 shops in Indiana, kept his response brief. “Simple answer: Adjusters being in the shops,” Tylka said.
Schulenburg said he agreed photo-based estimating isn’t going away, but insurers need to recognize they
Andy Tylka of the Tag Auto Group in Indiana said he doesn’t foresee a widescale return on in-shop inspections by insurers.
may not “reap the gains and expect the process to work well” if they also do away with their knowledgeable staff. “That’s one of the things we hear quite a bit from our membership, about the length of approvals, because the process ends up going back into a human’s hands, and the technical acuity of the human who is handling it just isn’t the same as it once was,” Schulenburg said. “So it’s just leading to longer cycle times, longer interactions, that negatively affect the consumer experience.”
New-Vehicle Prices Set Record in June as Luxury Share Hits New High The average price paid for a new vehicle in the U.S. in June was the highest on record and marked the first time the average transaction price (ATP) surpassed the $48,000 mark, according to new data released by Kelley Blue Book, a Cox Automotive company. The new-vehicle ATP increased to $48,043 in June, according to Kelley Blue Book, beating the previous high of $47,202 set in December 2021. June prices rose 1.9% ($895) from May and were up 12.7% ($5,410) from June 2021. New-vehicle inventory days’ supply inched up to the high 30s in June after being in the mid-30s since mid-January. Customer demand remains strong given continued supply issues. These conditions enabled most dealers to continue selling inventory at or above the manufacturer’s suggested retail price (MSRP). The average price paid for a new vehicle has been “over sticker” throughout 2022. In June, new vehicles from Honda, Kia and Mercedes-Benz were transacting on average between 6.5% and 8.7% over MSRP. On the other side
of the spectrum, Buick, Lincoln and Ram were selling at nearly 1% below MSRP. The average price paid for a new non-luxury vehicle in June was $43,942, up $615 from May, the highest price for a non-luxury vehicle on record. Car shoppers in the non-luxury segment paid on average $1,017 above sticker price. Consumers have paid roughly $1,000 more than MSRP in each month of 2022 versus only $158 over MSRP in June 2021. “While prices for the industry are, on average, higher than MSRP, there are some non-luxury segments that are more affordable, such as compact cars and compact SUVs/ crossovers,” said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. “These segments are selling for more than 30% less than the industry average transaction price.” In June, the average luxury buyer paid $66,476 for a new vehicle, up $1,097 month over month, the highest price for a luxury vehicle ever. For comparison, luxury vehicles were selling for nearly $825 under MSRP one year ago.
Luxury vehicle share remains historically high and increased to 18% of total sales in June, up from 17.3% in May.
The average price paid for a new electric vehicle (EV) increased in June by 3.8% compared to May and 13.7% versus a year ago. The average price for a new electric vehicle—more than $66,000, according to Kelley Blue Book estimates—is well above the industry average and more aligned with luxury prices versus mainstream prices. Hybrid/alternative energy vehicles are selling at just over $39,000 in June, a $3,593 increase over May, and an $8,453 increase versus a year ago. High gas prices are driving consumers to consider electric vehicles, hybrids and smaller, more fuel-effi-
cient gas-powered models. New-vehicle average transaction price changes month over month by segment saw prices mixed in terms of increases and decreases. With an ATP of $39,040, hybrid/alternative energy cars saw the largest increase of $3,593. Hybrids have been in the lowest supply lately of any segment. With an ATP of $66,997, electric vehicles saw an increase of $2,444 in June, while vans increased by $658 to an ATP of $50,126. The different car segments showed nominal increases in average transaction price in June versus May. Also in extremely short supply, compact cars were up only $146 or 0.6%, while mid-size cars were up 1%, or $325 for the month. Luxury cars showed a 6.4% decrease in ATP and full-size cars showed a 0.2% decrease. Meanwhile, electric vehicles had the lowest incentives (as a percentage of ATP) of 0.4%, and entry-level luxury cars had the highest of 3.4%. Incentives dropped to a record low level in June, averaging only 2.3% of the average transaction price. Source: Kelly Blue Book
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