New England Automotive Report October 2022

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October 2022 • Volume 20, No. 10

DEPARTMENTS

PRESIDENT’S MESSAGE

6 | Total Losses Shouldn’t Be a Total Loss for the Shop! by Kevin Gallerani

EXECUTIVE DIRECTOR’S MESSAGE

8 | Breaking Chains by Evangelos “Lucky” Papageorg

NATIONAL NEWS

12 | To Calibrate or Not: What a Dangerous Question! by Chasidy Rae Sisk

VENDOR AFFINITY PROGRAM SPOTLIGHT

18 | Auto Body Supplies and Paint (ABSAP) by Alana Quartuccio Bonillo

NATIONAL FEATURE

32 | Are Referrals “The-Right-Thing” Resistant? by Chasidy Rae Sisk

LEGAL PERSPECTIVE

36 | Should I Let That Car Go? by James A Castleman, Esq.

FEATURE STORY

20 | Is I-CAR Still Relevant? A Q&A with CEO John Van Alstyne by Chasidy Rae Sisk

COVER STORY

28 | Auto Sense: Breaking the Chains of Misinformation by Chasidy Rae Sisk

KEVIN GALLERANI

Total Losses Shouldn’t Be a Loss for the Shop!

Auto body shops make money fixing cars, so a lot of repairers have a really negative reaction to realizing that a customer’s vehicle is likely a total loss – but that’s only because they’re failing to see the opportunity!

Total losses shouldn’t cost your shop…you should still be making money when a car totals. After all, there are still administrative costs, blueprinting and storage fees that need to be paid. As a restoration business, our goal is always to bring cars back to life, but we shouldn’t sneer at total losses because honestly, totals can be more profitable!

Shops often disagree, but that’s only because they’re not charging enough. Here’s how you know: If you write a bill for an insurance carrier and they pay it without negotiating, you’re not charging enough. Surprise! If you actually charge for every operation you perform, most insurers will object. So, if they’re not complaining about your invoice, you’re probably missing some stuff.

Don’t get me wrong – I’m not suggesting that you do anything unethical whatsoever. But let’s look at the facts.

Insurance appraisers are trained to write such a horribly short sheet that nothing ever totals. They’ll write $1,000 on a $5,000 repair…or they’ll write $2,000 on an obvious total, which is

deemed a total loss only after we write a $10,000 estimate. Why didn’t they just total the vehicle in the customer’s driveway instead of wasting everyone’s time?

But they didn’t write a realistic estimate, so that car came into the shop where we spent a considerable amount of time dismantling the vehicle and analyzing the damage. The office staff dealt with the customer and the insurer, so there’s also an administrative cost associated with what we’ve done. And now that car is sitting on our lot, taking up space and creating a lostopportunity cost. Why should any shop give all that away?

Auto body shops should be compensated for the work they perform, and that includes total loss scenarios. If insurers are paying your bill without flinching, it’s time to re-evaluate what you’re asking for. BillableGenie.com is a great resource for investigating operations that you might be missing.

As this year comes to an end, it’s a great time to take a look at your costs and update your charges and rates based on your actual cost of doing business, and that includes when you’re dealing with total losses.

AASP/MA PRESIDENT KEVIN GALLERANI is president of Cape Auto Collision Center in Plymouth, MA. He can be reached at (508) 747-0316 or kevin@capeautobody.com.

AASP/MA

AASP

P.O. BOX 850210 Braintree, MA 02185

Phone: 617 574 0741

Fax: 973 235 1963

Email: admin@aaspma.org

AASP/MA member in good standing on the AASP/MA website for

repairs and assistance with the claims process.

(___ initials Date ___/____/2022)

MONEY SAVING BENEFITS:

processing � Grant writing/training

� All five

MA)

2023 as provided for in this contract.

Breaking Chains

Our industry is comprised of a mix of “body men” who run their body shops according to the old ways they were taught… and collision professionals who operate their collision repair businesses while trying to keep pace with the rapidly changing technology pervading all things automotive.

Sadly, the days of being able to run a body shop solely on a handshake and a price agreement have long since gone. Equally sad is the fact that some think they can continue to repair today’s vehicles using the techniques and equipment of those bygone days. Reinforcing this sad state of affairs is an insurance industry that is willing to sacrifice all manners of ethics in order to protect their bottom line at any cost. They blur the facts, preying upon the weak and those easily led astray under the guise of protecting the public from the spectrum of ever-increasing insurance premiums.

Many of those who have been led astray or forced into compliance are within our very own collision repair industry. These hardworking, compassionate individuals have been asked or forced to sacrifice tremendously for the better part of the last 34 years. They are forced to do so by “well-meaning legislation,” which has been bastardized by the insurance industry in an attempt to keep the collision repair industry cowering at the thought of having no customers and being forced out of business.

When the current referral system was forced upon the collision repair industry here in Massachusetts (through what some would say were some shady, very late-night backroom deals made on Beacon Hill), a wedge was driven into our industry. A wedge we have been seeking to remove for the past 34-plus years. A wedge that many of the body men turned businessmen saw for what it was at the time: a harbinger of bad times ahead. They saw that the insurance industry, rather than concentrating on the business of selling insurance, was instead inserting itself into the collision repair business – and not in a good way.

Insurers are not concerned with protecting the public as they claim. All one needs to do is to watch a few episodes of the “soap opera” which we call the ADALB, to see who is directing the “actors.” Yes, Oscar-winning performances by the chairman of the ADALB, the “esteemed” legal advisor and one of the singleminded insurance representatives on the Board leave no room for interpretation as to plot and motive. Together, they work in unison to murder any attempts by shops or consumers to be protected in the collision repair process. As if the months of selfimposed delays were not enough, the last meeting of the ADALB was an absolute disgrace. See for yourself by watching the video recording (especially the last seven minutes) on the Members Only section of aaspma.org

What has come from all the collision repair industry’s recent efforts? As I mentioned in my last message, we have sharpened and strengthened our political teeth! Another even more important outcome is that we have added to our numbers as an “ALLIANCE.” Not just in membership but also in the caliber and resolve of our members. More and more member shops are no longer being chain rattlers; instead, they have become chain breakers. That is to say, rather than try to survive while chained to a system of claims handling and insurance payments at a substandard and suppressed reimbursement rate, shops are breaking away.

No longer are they allowing themselves to be controlled by the “learned helplessness” of a circus elephant, who has been chained for so long with a short length of flimsy chain to an even flimsier stick in the ground. Shops are informing their customers that they can no longer subsidize the multi-billion-dollar insurance industry at the expense of their own shop’s liability and at the expense of the vehicle owner’s safety. More and more shops are educating their customers regarding the fact that “co-pay” is here to stay in the collision repair industry, just as it has been in the medical profession. The “ALLIANCE” continues to assist in educating shops and consumers alike as to why this is becoming a reality. The blame is being laid squarely at the feet of the insurers who continue to refuse to face the reality of changing technology, equipment and the training required to protect the motoring public and the increased costs to keep pace. All the insurers see is that, in order to protect their record-breaking profits, they may have to increase insurance premiums, which they surely intend to do in any case.

The “ALLIANCE” website, our new TV show Auto Sense (see page 28), our collective lobbying and educating legislators are all part of our multi-pronged attack on a decades-old abuse

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by Chasidy Rae Sisk

To Calibrate or Not: What a Dangerous Question!

CRASH! A typical fender bender once required a fairly basic repair, but today’s vehicles aren’t that simple – advancing technology has created ADAS, the ultimate co-driver. These systems’ ability to process information faster than humans prevents accidents, but if they are not properly scanned, calibrated and repaired after a collision, the repercussions can be catastrophic!

“ADAS calibration isn’t rocket science; it’s much more complicated than that!” quipped George Lesniak (Autel), who emphasized that it’s also a vital component to ensuring a safe repair.

“ADAS systems save lives…but once they are repaired, they have to be repaired the right way in order to do their jobs properly,” Chuck Olsen (AirPro Diagnostics) stressed.

That begins with pre- and post-repair scans. According to the October 2021 “Who Pays for What?” survey on scanning and calibrations, conducted by the CRASH Network and Collision

“The industry is missing about 85 percent of ADAS calibrations. That is, only about five percent of jobs have an entry for a calibration, when the number should be much closer to 33 percent,” shared Nick Dominato (Repairify). “If you’ve got a model year 2020 vehicle, there’s about a 50-50 chance that it requires at least one ADAS calibration.”

Unfortunately, less than a third of estimates for those vehicles included a line item for calibration, according to Repairify’s analysis. CCC Intelligent Solutions’ 2021 Crash Course Midyear Report indicated fewer than 17 percent of estimates on current year or newer vehicles included an appraisal line for “calibration/reprogram/ flash.” And although the majority of respondents to the 2021 New Jersey Automotive Industry Survey reported they perform an average of two calibrations on each vehicle, just 14 percent stated they run as many calibrations as is required by the OEM.

Advice, 85.2 percent of shops pre-scan “all” or “most vehicles;” that number increases to 92.9 percent for post-repair scans.

But when it comes to calibrations, which I-CAR defines as “aiming, module setup, relearn, zero-point calibration, initiation or calibration is a required step following the removal, installation and/or repair of many safety and driver convenience system parts,” a different story is unfolding, and although the exact metrics vary from source to source, the overall message remains the same: auto body shops aren’t calibrating every vehicle that requires it.

“Sixty to 65 percent of vehicles that should receive a calibration didn’t, so when we ask where the industry sits on this, the numbers speak for themselves…We’re behind!” claimed Frank Terlep (Auto Techcelerators)

“If you’re not following OEM repair procedures when you work with ADAS, you’re not calibrating the vehicle – you’re mis-calibrating it!” Dominato insisted.

“A calibration technician cannot rely on memorization; they need to constantly be researching and keeping on top of this evolution because things change continuously,” Olsen agreed. “From a workflow perspective, this work requires a different skillset.”

And the demand for that skillset is only going to grow with the government’s mandates related to vehicle safety forcing OEMs to include ADAS systems in virtually every new vehicle being manufactured. The Insurance Institute of Highway Safety (IIHS)

indicated that 60 percent of registered vehicles on US roadways were equipped with at least one ADAS feature in 2021.

Yet, only 30 percent of collision shops are capable of ADAS component replacement due to complexity, expense or perceived lack of demand, reported Chris Gardner (Automotive Aftermarket Suppliers Association), expressing concern about the number of shops “working on [ADAS-equipped] vehicles without staying upto-date on what’s changing. And that can be dangerous.”

AASP/MA Vice President Matt Ciaschini (Full Tilt Auto Body & Collision; West Hatfield) recognizes that vehicles need to be calibrated, which is why his shop utilizes “a program that scans all repair orders and informs us which recalibrations are required on every vehicle we repair. This is a must-have for all shops in our industry that want to make sure they are repairing vehicles correctly and safely. Although 75-80 percent of the cars we work on require some type of recalibration, most cars don’t tell you that they need to be recalibrated through scanning or DTCs; that information has to be sought through the OEM procedures.”

With a few exceptions, Full Tilt Auto Body & Collision sublets all calibrations to the dealer because “the space required for recalibration is way too large for us to dedicate to a permanent recalibration bay,” Ciaschini explains. “We use our local dealers for all recalibrations, towing vehicles to the dealership to ensure it is operating correctly before our technicians drive it.”

Although the shop can perform in-house recalibrations on items like seat weight sensors and dynamic seatbelt inspections, “getting insurers to recognize that we are capable of performing them and then compensating us for our time” poses a challenge, according to Ciaschini. “We perform those recalibrations every time they are required but are denied compensation over 50 percent of the time. Insurers also reject any markup for sublet recalibrations; for the most part, insurers will only reimburse us for what we paid the dealer, but imagine selling a product for what you paid in any other industry!

“The cars don't recalibrate themselves, nor do they set up their own appointments at the dealer or arrange for themselves to be towed to the dealers, yet most insurers blindly deny a reasonable markup to the sublet bill,” he continues. “Appraisers often ask, ‘Why do you guys send these cars to the dealer when no one else does?’ And that indicates one of two problems: Either shops really aren’t sending cars to be recalibrated when they should be, or they aren’t charging for it because they’ve allowed insurers to make them feel they are the ‘only ones.’ We cannot let them convince us we are doing too much because we follow vehicle requirements. They just pay the bill…We are the repairers; we are the experts.”

What’s the real story of calibrations? We don’t know…yet. We want to hear straight from the source – YOU! Please visit https://bit.ly/TGPADASpoll to share your thoughts in a brief reader poll. We can’t wait to hear from you!

EXECUTIVE

continued from pg. 8

of a controlling system. Our efforts to break the chains have been unrelenting. We must continue to rally together as an “ALLIANCE” and an industry to continue breaking the chains which have enslaved us for so long. We are just like any other retail business out there whose goal is to make a reasonable profit while being able to pay our employees a fair wage for their knowledge and expertise in a challenging and rewarding industry. The ability to pay employees enough so they can hold their heads high while they provide for their families. Pay a fair wage so that more and more of the talented youth in our vocational schools consider the collision repair industry as their chosen vocation. Breaking the chains is the only way we will accomplish this goal.

We can go from “learned helplessness” to “learned successfulness”... All it takes is knowing that you and your shop are worth it and making the decision to go for it!

When will you stop being a chain rattler and become part of the growing number of chain breakers?

AASP/MA EXECUTIVE DIRECTOR EVANGELOS “LUCKY” PAPAGEORG can be reached at (617) 574-0741 or lucky@aaspma.org.

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Auto Body Supplies and Paint truly delivers so much more than its name implies.

The company – often known by its acronym ABSAP – has been serving auto body businesses since 1976 when founder Kay Ryalls first got the company off the ground.

Initially, the company focused on being a R-M paint supplier, but soon after, R-M was absorbed by BASF, and ABSAP has remained a leading supplier of BASF products ever since.

Participating and supporting the association is an “indirect way to support the shops we do business with,” shares Hutchinson. It also lends a hand in backing up the work AASP/MA is doing to fight for labor rate reimbursement which is something Hutchinson hopes to see come to fruition: “We’ve been down this road a few times, and we really hope for a win.”

Although the company has four locations in Massachusetts, ABSAP was founded in Connecticut. As the company began to grow its footprint, it naturally made its way into the Commonwealth. Its Springfield location opened in 1991. They later set up shop in Worcester, Fall River and Wilmington. ABSAP has two locations in Connecticut – in East Hartford, where it all began and Bristol – as well as a location in Manchester, New Hampshire.

Their New England reach has extended even further with their newest location in Burlington, VT, which was set to open this past September.

Perhaps, the company should be called Auto Body Support and Paint because their role as a ColorSource jobber for BASF goes so much further than supplies. Support goes hand in hand with everything they supply to their customers.

As the auto body world evolves, ABSAP is evolving right along with it.

According to General Manager Rick Hutchinson, the company’s sales team has changed dramatically as it no longer consists of just salespeople – they send technicians out on the road too.

“It’s becoming more and more of a technical industry than a sales industry,” explains Hutchinson. “We supply ALL the technical support for the shops we deal with. In the past, we’d have a member of the sales team go into the shops to show them products, but now when we go in, the goal is on inventory management. When we go into a new location, we sit down with them to work on their processes and standard operating procedures. We work to fit the product to the procedures, helping them to establish an inventory.”

ABSAP is a partner to their customers. They want the businesses they work with to know “they aren’t on their own.” Both their sales and technical staff regularly visit shops.

“We are experts on our product – the BASF line,” affirms Hutchinson. “BASF is all we’ve ever carried. Our technicians know it inside and out. That knowledge makes us stand out.”

In line with their commitment to support the auto body business they work with, ABSAP has been a champion of AASP/MA for many years. Currently, ABSAP is a Diamond level sponsor of the association’s Vendor Affinity Program.

They always take part and lend further sponsorship to AASP/MA’s annual golf outing and other membership events throughout the year.

Perhaps one of the developments they are most proud of is their brand new training center in Worcester. The company invested over $1 million into this 4,200 square foot facility which houses a conference center, spray booth and class space, affording ABSAP the opportunity to offer training to their customers. Hutchinson says they are running two to three half-day classes a month currently. Although they can accommodate more, they are keeping classes to roughly 6-12 at a time to allow time for hands-on training.

Hutchinson also believes the family-run operation itself and a solid crew of long term workers has led to the company’s success and longevity.

The company has continued to be operated by the Ryalls family all these years with second generation members in the process of taking over. Hutchinson has been an employee for 30 years, and most of their principal members have been with ABSAP for 35 years or longer.

“The family is phenomenal to work for. Our team enjoys working here. They are here because they want to be here.”

by Alana Quartuccio Bonillo

ABSAP's brand-new training center in Worcester allows them to provide customers with hands-on training.

ABSAP's technical knowledge ensures they're providing shop customers with expert guidance on the products they sell.

Is

Still Relevant?

A Q&A with CEO John Van Alstyne

Training. Every profession changes and requires ongoing education to some degree, but these days, few industries are experiencing an incessant flux of advancing technology quite as dynamic as auto body shops have seen in recent years…which experts predict will continue for some time.

The best-known training option for collision repairers is I-CAR (the InterIndustry Conference on Auto Collision Repair). As “an international not-for-profit organization dedicated to providing the information, knowledge and skills required to perform complete, safe and quality repairs,” I-CAR’s mission is to “deliver increasingly accessible, on-demand and relevant education, knowledge, services and solutions for the collision repair inter-industry.”

According to their website, “Ongoing changes in OEM technology, materials, manufacturing capabilities and standards make I-CAR more relevant than ever to the collision repair Inter-Industry.”

But is that true?

After hearing several auto body professionals cast aspersions on I-CAR’s relevance, value and motivations, New England Automotive Report reached out to I-CAR CEO and President John S. Van Alstyne, who agreed to discuss some of the concerns shops have been voicing.

New England Automotive Report: I-CAR has been making a lot of waves lately. You recently opened the Chicago Technical Center, and at the Society of Collision Repair Specialists’ (SCRS) recent meeting,

Bud Center (I-CAR) mentioned soliciting industry feedback as part of efforts to enhance your curriculum. How is I-CAR using their customers’ feedback to make training more specific, detailed and relevant?

John Van Alstyne: I-CAR develops its curriculum in close collaboration with the inter-industry, significantly including collision repair shops, through our Voice of the Customer (VOC) processes. We engage members of the collision inter-industry (repairers, OEMs, insurers, suppliers, services and educators) to create loops for input and feedback. Through our Industry Knowledge and Skills protocol, we determine whether a course is needed, consider credentialing impact and build or update the course. Industry professionals help us test and pilot the new course for quality and relevancy before its launch.

At the end of 2019, we launched a complete overhaul of our educational program, developed directly based on feedback and input from the industry to ensure current relevancy, eliminate course-to-course redundancies and increase efficiencies through course design and new delivery methods with the goal of improving the overall student experience. We engaged different stakeholders, including a wide cross-section of SCRS shops and others across the country, to review our intended program and course adjustments –and we made significant enhancements to our previous offering.

We’re requiring more online courses, less classroom time and more in-shop training focused on the increasing number of skills relevant to complete, safe and quality repairs today and tomorrow. For a typical shop of nine employees in the four key roles (Structural, Non-Structural, Estimator, Refinish), the former curriculum would have required 236 hours’ worth of non-skills courses to reach ProLevel® 3, but by tightening efficiencies, we’ve reduced that time to 139 hours, allowing technicians to learn what they need to know with less impact to the shop workflow. Skills courses increase that time –and yes, we’ve added more, including MIG brazing and spot welding, at the industry’s demands. Our curriculum has been driven by advances in vehicle technology and repair methods, so we provide more training in the skills needed, while we cover the other knowledge areas in a much more efficient way

to save time for busy shops.

It’s also important to recognize that a single course is not representative of an entire portfolio or complete credential. Our program is designed to progressively and logically build knowledge and skills, equipping people to develop and do the right things. Our 2019 redesign implemented the foundational principle of “recognizing existing knowledge” before jumping into training. Technicians accrue knowledge through experience and training, whether with I-CAR or our Alliance partners, so we maintain their historical records, and since 2019, we now get direct data feeds from our Alliance partners. This combined history gives us the starting point for the technician and shop journey to Platinum™ ProLevel 3 and thus shops’ path to Gold Class. We also offer “In-Shop Knowledge Assessments” where an I-CAR assessor meets with students in-shop and extends credit for ProLevel 1 knowledge areas the student demonstrates competency in. This can shorten the timeline to Platinum and Gold Class, while ensuring we minimize the need for potentially redundant training.

NEAR: The biggest complaint we’ve heard from shops is that obtaining I-CAR Gold Class is too expensive and lacks value for the investment being made since I-CAR doesn’t publish a list, insurers don’t seek out Gold Class shops and consumers don’t know the difference. How do you respond to shops’ belief that I-CAR training is too expensive?

JVA: Over the past decade, the cost to repair has gone up for a number of reasons, largely related to advancing technology – and the industry’s interest in complete, safe and quality repairs for the ultimate benefit of the consumer. The cost of training has increased because of the same dynamics. Our actual pricing has not gone up…in fact, it has effectively gone down in most cases! We now offer an UNLIMITED training subscription option (excluding skills courses), allowing all shop employees to train as much as they wish and mitigating the risk of extra spending due to technician turnover – a cost savings for the shop while building broader shop-wide competencies. That said, there’s a different mix of courses with different pricing for online, classroom and skills courses, all of which relate directly to the associated costs for delivering that course. We require more skills courses that are taken in the shop to provide that hands-on training that techs need specific to their role.

Another factor impacting cost is the level of training now required. Whereas we previously only required one person to be credentialed in each of the four key roles (and one person could hold all four), the inter-industry deemed this inadequate, and we now require credentialing at a higher level: 100 percent of structural technicians and 50 percent of estimators, non-structural and refinish techs; one person may hold no more than two roles. So, while our pricing has improved, the total cost is up; however, benchmarking against similar educational programs indicates that we’ve stayed very competitive, and we remain focused on making it as affordable as possible.

Our informational services through Repairability Technical Support (RTS) are free to those who train with I-CAR. Also, we absolutely do publish a list of Gold Class shops (bodyshopology.com), which is used by insurers and OEMs to research for potential network additions. Over the years, we’ve collaborated with multiple OEMs to help them identify, engage with and build their networks by virtue of our Gold Class population, which today numbers just under 9,000 shops in the US.

by Chasidy Rae Sisk

NEAR: Shops are saying the opposite: They claim that the costs have increased, specifically for the welding program.

JVA: That’s true; the cost of the welding program has gone up, largely due to the level of training. Our 2019 updates included a revamp to our welding program, decreasing the period of reverification from five to three years since the five-year period was deemed too long given learning retention, age and health which can all impact welding quality. But after taking the base course, reverification is a simpler process, at a significantly lower price point (compared to taking the entire course again, as formerly required). Shops will also enjoy an associated savings from a production time standpoint since the reverification course is shorter, but shops likely aren’t fully seeing that yet. We did increase the base one-student price to cover our cost, but the upcharge for extra students dropped by 50 percent. As a result, for our average Gold Class shop with two structural techs, the cost to train both did not change. Implementing “scaling of training levels” in 2019 also impacted welding competencies required. Before, only one structural technician in a shop needed to be certified; now, 100 percent of a shop’s structural technicians must receive and maintain welding certifications for a shop to achieve or maintain Gold Class status. So, depending on the size of the shop, it may be more expensive, but VOC participants took that into consideration and determined that it was more important to elevate the level of training in collision shops. Repairers and OEMs advocated for scaling to ensure every Gold Class shop has an appropriate level of trained professionals. Our Sustaining Partners have helped offset the training costs, and through their support, we’ve been able to waive all shop fees for Alliance credits. And on a side note, our Sustaining Partners program has also allowed us to eliminate curriculum licensing fees for upwards of 250 Career Technical Schools that participate in our Fixed Training Site program for live classroom delivery, despite being shut out of these schools since March 2020.

NEAR: The Alliance and Sustaining Partners programs might be more beneficial to shops if a large number of OEMs participated. Shops feel they’re often duplicating efforts to take extensive training through an OEM…only to be required to take a less-focused version to maintain their I-CAR status. If OEMs are the experts, shouldn’t their courses be sufficient?

JVA: While we have a portfolio of resources available for shops, we are also focused on strong collaboration with OEMs. We rely on their expertise from an engineering and technical perspective and refer the industry to OEM repair procedures in all of our courses and technical messaging – we 100 percent advocate the use of current OEM procedures as the starting point for repairs. I-CAR collaborates with OEMs on many fronts, but not all OEs offer training, and even fewer offer a program as comprehensive as I-CAR offers; thus I-CAR performs a real value-added service for those that don’t by providing the core training that most have adopted as their baseline, or complete, training requirement for network participation. Other OEMs that do offer training often require Gold Class as a baseline which their courses build upon.

For the OEMs that offer their own training, we offer cross-credit through the Alliance program, but unfortunately, we don’t have all the OEMs in there yet. We’ve had a challenging time gaining OEM

participation in our Sustaining Partner program which has been our mechanism to also enable Alliance participation. Ford is a Sustaining Partner, and we have a total of 49 Sustaining Partners. We understand their reticence; and I-CAR does believe it’s important to engage more vehicle manufacturers in our Alliance program as a first priority, thus we’re actually planning to make changes in the upcoming months to attract more Alliance partners, OEMs included. We’re exploring offering Training Alliance independently to those that have not yet adopted the Sustaining Partners program, as an initial step toward Sustaining Partner. We hope this will attract more OEMs to the Alliance program, providing the opportunity to transfer more credits that repairers have already acquired and allowing us to better recognize technicians’ existing knowledge, one of our educational programming goals. We’re looking at different approaches to make it more appealing for the OEMs and more beneficial for the shops.

NEAR: While we’re on the topic of who best knows how to repair vehicles, some collision repair professionals also take issue with the emphasis on cycle time and being taught to work with “insurance partners.” If I-CAR is training collision repair shops to perform safe, proper repairs, why hire insurance representatives who emphasize following OEM procedures – only to deny those same processes on an estimate mere days later?

JVA: I sense some of this is a flashback to prior years. Since most of our courses are now online, we only have a handful of insurers doing (instructor-led, web-based) I-CAR training. Most of our on-site skills courses require technical skills like MIG brazing and welding, thus teachers are typically former technicians and welding experts.

As far as “cycle time,” we consider cycle time to be an important dimension of the business process, whether you’re operating a repair facility, a manufacturer or a restaurant. Customers only wish to wait so long, and cycle time impacts many operational and financial outcomes. I relate cycle time in our industry to my experience in the OEM world prior to my I-CAR days. We operated under lean principles that required us to gear all operations involved in meeting customer demand around the notion of TACT time (units of output/time), but while we had TACT time targets, these never superseded the prerequisites of technical accuracy, quality, etc., which were required to remain in business…you need to do it all in a balanced manner to have a viable business model. It’s about running an effective business and meeting customer needs.

In regard to the direction insurers may give shops, we’re not involved with insurers at that level. It’s kind of the great industry fallacy that I-CAR is in the back pocket of the insurers. It’s complete nonsense. We have three insurers, three OEMs and four repairers on our Board; our insurance reps are assuredly interested in having shops do good work, and they don’t unduly influence our programming to the detriment of repairers or OEMs. I-CAR stands for complete, safe and quality repairs, and our Board reads our vision statement at every meeting.

NEAR: So, how else does I-CAR create value for shops?

JVA: I-CAR does everything we can to help shops, and we remain committed to ensuring our program remains relevant, adjusting initiatives based on industry feedback. Now, could we do it better? Of

course we can, and we are committed to continuous improvement, a required component of our recently-earned IACET (International Accreditors of Continuing Education and Training Providers) accreditation, which requires us to follow strict process controls and undergo third-party audits to ensure we’re following best practices. As such, the industry can look forward to a few adjustments we will be announcing shortly, based on VOC garnered over the past year as the transition to our updated programming continues through the end of 2022 and then moves forward steady-state.

Our customer care team is our primary form of outreach to our customers, and they stay in contact with shops all year, though the second half of the year is usually focused on scheduling training to prepare for renewals. An obstacle we run into is a lack of responsiveness from shops; we leave messages, but call-backs often don’t occur…and we get that – shops are busy. But waiting until the last minute makes it difficult to react and support them effectively. Shops can also request to schedule face-to-face meetings with our field team, when necessary.

We also support the collision industry through RTS, which is free. While our online shop portal, MyI-CAR, offers business support, “Ask I-CAR” (our RTS portal and technical call center service) provides real-time technical support for shops that are struggling with a repair and need guidance. Through “Ask I-CAR,” our team coaches the shop through the process – they’ll even coordinate directly with the OEM to find any missing information and be the conduit between shops and OEs in that manner.

I-CAR recently announced a new initiative we’ve undertaken with the Collision Repair Education Foundation (CREF): the Industry Talent Programming initiative. We want to help the industry attract entry-level-ready talent across various channels by creating consistency in the industry’s image. We’ll offer marketing assets for shops and schools to use in their areas, create job boards and recraft our school curriculum to help schools improve (targeting to launch updated school curriculum in the 2023-2024 school year). We’ll also make the school curriculum available to shops that wish to develop their own entry-level technicians internally, and related, we intend to create an industry apprenticeship program. Since shops need help with retention, we also plan to offer HR best practices/training and mentoring programming, which we have found to be a key success criteria for entry-level technician success. As an industry, we need to attract more talent, but importantly, we need to retain our talent. To help offset the cost, we plan to pursue large foundation and government grants, and although it’s likely that there will be a nominal fee structure for shops and schools, we’re doing everything possible to prevent it from being burdensome or onerous.

When I-CAR coined the phrase ‘Technical Tsunami’ a decade ago, we knew that advancing technology would require a step up in knowledge, skills proficiency and business sophistication. That tsunami is rolling over the collision industry right now. At the end of the day, the level of training has increased as defined by the industry in response to the technological changes in vehicles. Training is an important component of running any business, but in collision repair, technicians need to be educated to perform safe and proper repairs. Ensuring customers’ safety and avoiding liability depends on those competencies. Shops that embrace training will not only survive – they can also thrive because they’ll be performing safer repairs and becoming better businesses along the way.

Auto Sense: Breaking the Chains of Misinformation

If knowledge is power, it stands to reason that a lack of information leads to an absence of power…possibly even a form of bondage. But rather than allow consumers and auto body professionals to remain imprisoned in a cell of misinformation, AASP/MA has taken its educational programming to a whole new level with its TV show, Auto Sense

“Our goal is to help vehicle owners better understand the claims process, why their vehicle needs to be repaired a certain way and how the insurers are shirking their responsibilities,” explained AASP/MA Executive Director and Auto Sense host, Lucky Papageorg. “Collision repairers are the consumer’s true advocate in the process – the shop seeks to perform necessary procedures that are required to ensure the vehicle reacts the same in a subsequent loss.

If the shop fails to follow those procedures, there’s no guarantee the vehicle will be safe for its occupants or anyone else on the road.”

Since debuting in June on Braintree’s BCAM TV, Auto Sense has sought to loosen the yoke of ignorance that has been inflicted upon the motoring public, and although only a few episodes have aired so far, the shackles are already weakening!

“After having a minor fender bender, I was researching YouTube for collision repair advice and found the first episode

of Auto Sense,” recalled one consumer, Maureen McCaughna. “I learned exactly what I needed to know – and even a few things I didn’t realize I needed to know! They covered the complexity of collision repair, insurance issues and most importantly, the need to be your own advocate.

“I was surprised to hear how the consumer should always be included in repair decisions,” she continued. “Now, I realize that the repair shops, NOT the insurance company, are the best resource for the vehicle owner. The casual, conversational format of the program made it much easier for me to understand the information. I’m looking forward to future episodes and hope that the presenters will elaborate even more on what insurance policies should cover when it comes to vehicle repair.”

Auto Sense has also provided Massachusetts vehicle owner Dianna Hopper with unexpected freedom delivered in the guise of knowledge.

“It was extremely informative to learn about the many things that happen behind the scenes in the insurance industry that consumers are unaware of. I was really impressed with the quality of information and plan to continue listening to future episodes. It’d be really useful to learn more about best practices on combining all home and auto benefits under the same insurance

by Chasidy Rae Sisk

company, and I’d like to better understand when it’s best to go through a third-party policy to avoid affecting our insurance score…because a lot of people don’t even realize that we have an insurance score!”

The first two episodes of Auto Sense featured special guest Jack Lamborghini (Total Care Accident Repair; Raynham) who joined Papageorg in educating people on collision repair claims practices and the importance of self-advocacy (episodes one and two are available at bit.ly/AutoSense-ep1 and bit.ly/AutoSense-ep2, respectively).

Massachusetts-licensed auto damage appraiser and insurance agent Nadine Nesbitt (WAITT! We’re All In This Together Marketing Group) appears on the third and fourth episode to offer advice on purchasing insurance, selecting the right agent and understanding the differences between first and third-party losses.

“Auto Sense will cover everything from insurance to ADAS, from repair procedures to legislative initiatives, as we attempt to educate the motoring public on becoming their own best advocate and assisting the body shop that will be properly taking care of them and their vehicle,” Papageorg promised. “We plan to do in-shop recordings to demonstrate the extent of equipment shops must invest in to help consumers understand everything we undertake to ensure the safe repair of their vehicle.”

As with most of AASP/MA’s initiatives, Auto Sense also strives to free auto body shops from the chains that hold them back.

“Repairers take on major liability when they repair a vehicle; they cannot afford to repair that vehicle improperly,” Papageorg emphasized. “Yet, the insurer’s only concern is their bottom line, and they look to mitigate their losses to the point that they’ll untruthfully tell vehicle owners that these procedures are unnecessary. But shops invest thousands in training, tools and equipment, and they deserve to be compensated for what they do.

“The collision repair industry has borne the brunt, performing procedures for free when the insurers refuse to pay for them, but we cannot continue absorbing this cost and subsidizing repairs. Shops hate to charge co-pays to their customers, but someone has to pay. By rights, the shop’s invoice should be covered by the indemnification policy the consumer bought…but insurance companies are shirking their responsibilities, and consumers deserve to know the truth.”

Papageorg also has a message for insurers:

“Insurers don’t fix cars; repairers do. It’s your job to indemnify the policyholder, and that means compensating shops for restoring the vehicle to its pre-accident condition, nothing more and nothing less!”

Shops are already seeing the benefit of using Auto Sense to educate consumers. One shop owner informed Papageorg that he’s

running it in his waiting room, while other shops have received calls from customers asking if they are affiliated with AASP/MA.

“General education for the crashing masses without promoting any specific shop…It’s a great way to get messages out to consumers with pertinent information and pictures to show the general public what’s under their car’s skin in a more in-depth way than we can explore at the point of sale,” Rob DelGallo (Factory Collision & Restoration; Weymouth) shared his thoughts. “By producing our own videos, with a little local flavor, to help consumers with questions, our industry is letting consumers know that they have more power than they think!”

“Auto Sense is a very informative show with a lot of pertinent information regarding the current state of the collision repair industry,” agreed Josh Fuller (Fuller Auto Body & Collision Center; Auburn). “Creating and maintaining awareness of our challenges can only benefit our industry in the long run, and I’m excited to see what topics are covered next.”

Fuller suggested that he’d like to see an episode on current regulations and best practices, and he thinks it’d be beneficial to share shops’ real-world experiences with customers and insights, possibly even adding an “Agent Spotlight” segment to offer an insurer’s perspective. DelGallo has a lot of ideas for future topics as well, including ADAS demonstrations or examples of scenarios that can occur when vehicles are improperly repaired or when an installed part is not like kind and quality when compared to the original.

“We should cover every topic that repair facilities deal with on a daily basis – from steering to the substandard work performed by some shops,” DelGallo recommended. “Let’s tell consumers the truth about why insurers employ these shops because we all know it’s not about proper repairs…It’s about saving the insurer money, even if it costs the vehicle owner.”

A new episode of Auto Sense airs on Braintree’s BCAM TV every two weeks, and episodes are being added to BCAM’s YouTube channel for on-demand access. The show is also distributed to nearly 350 additional public access stations across Massachusetts that may elect to broadcast it to their local communities as well. Contact your local station to request they add it to the programming in your area. (Visit bit.ly/ ask4AutoSense to find contact info for your local station.)

Papageorg is “really confident that consumers and shops will get a lot of useful information from Auto Sense. This platform allows AASP/MA to amplify our voices to make sure that accurate information about our industry is reaching customers’ ears. Stone by stone, we WILL tear down the prison of misinformation that has been erected around us!”

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Are Referrals

“The-Right-Thing” Resistant?

Should insurer referral and program contracts be canceled? Last month, several shop owners shared their opinions on this topic with New England Automotive Report (available at grecopublishing.com/ near0922coverstory), and a common trend developed: Many shops have extracted themselves from programs due to the belief that these contracts allow insurers to usurp control over their businesses – and prevent them from doing the right thing for their customers.

“You have to perform repairs correctly from a liability, quality and service standpoint, regardless of what the insurer says,” according to Jack Lamborghini (Total Care Accident Repair; Raynham). “Establishing a strong customer base begins with quality repairs, and honestly, 80 percent of a shop’s program and referral customers were already that shop’s customers to begin with…so, why do we, as an industry, allow insurers to continue to control us through this program/referral mechanism?”

“Anyone who owes you money shouldn’t be telling you how to complete the job,” emphasized Al Correia (A.P.C. Auto Body; Dartmouth). “Insurers are all about fast and cheap – but with severity so high, how can you lower costs of items that are only getting more expensive? The only ‘best interests’ they’re concerned with are the ones related to their wallets. Insurers need to control costs, but what entity controls ‘what the car needs to be restored to pre-accident condition’ if shops are dictating repairs? Insurance companies need to be removed from the repair process and recognize their only job is paying the bill.”

“Today’s vehicles are extremely sophisticated, yet our industry doesn’t even have basic standards,” Jeff White (North Andover Auto) lamented. “Technology is advancing by leaps and bounds, so we have to really pay attention to every aspect of the repair. Even a simple bumper cover replacement may require calibrations, but if a shop doesn’t know any better, they could send that car back onto the road without the forward radar being correctly calibrated…and someone could get hurt.”

“This is becoming a very specialized industry,” contributed Rick Starbard (Rick’s Auto Body; Revere). “I foresee some shops getting themselves into trouble by attempting to repair something that they should not be repairing. This will inevitably lead to some getting into

situations that they can't buy themselves out of.”

Of course, most Commonwealth shops cannot afford to buy themselves out of any jam, given the fact that they contend with the lowest labor reimbursement rate in the country, despite being located in a market with one of the highest costs of living. Are programs and referrals profitable?

“It’s profitable in the sense that it makes us more efficient,” offered Correia. “We can disassemble, photograph and keep going, but there’s not an additional profit from them sending more cars our way. Right now, the entire industry is so backed up that there’s plenty of work, whether a shop contracts with insurers or not.”

“I can’t see how it would be profitable, and it’s been many years since I’ve actually participated in any referrals or programs,” White acknowledged. “If you’re able to push repairs out like an assembly line, there might be money in the sheer volume, but today’s cars aren’t built that way…You can’t just whip them in and out of the shop. They require knowledge of the different materials and research on the OEM procedures. It’s hard to imagine a high-quality assembly line facility or how that could produce a profitable model.”

“There’s no way that programs and referrals can be profitable in Massachusetts with a $40 per labor hour multiplier,” Ray Belsito (Arnie’s Auto Body; Charlton) dissented. “You cannot begin to make money at that rate. In a functional market with steady volume where you can come to a meeting of the minds with the insurer on certain issues, it might be manageable at the right rate, but as an independent shop, we need every single dollar to stay operational.”

Labor reimbursement rate is such a prevalent problem in Massachusetts that it was identified as the most pressing issue impacting the collision repair industry by the majority of shops polled during New England Automotive Report’s inaugural survey (available at bit.ly/ NEARsurvey22).

"Insurance company referrals and DRP contracts have been the bane of the collision industry's existence since inception,” Starbard vented. “If shops didn't sign these things, we would not have a labor rate problem, a parts problem or many other problems that repairers

by Chasidy Rae Sisk

face. These contracts have caused all repairers to be held to the lowest common denominator of shops willing to sign on versus competition within the industry like most others. These contracts allow insurers to drive the bus when it is the repairers who should be driving it.”

“Fast and cheap and profits, that’s all they care about,” Correia bemoaned the current state of the industry. “They’ll give you a pat on the back for a fast, cheap repair, but they don’t want to talk about increasing labor reimbursement rates. Shops have to take their businesses back – insurers aren’t going to just hand it over. They created this problem, and it’s not going to be solved by politely asking them for more money. If AASP/MA’s legislation doesn’t get passed, the only option I see is for every shop to remove themselves from these programs/ referrals and balance-bill the customer. Getting the customers involved has been working for us; they realize that $40 an hour is obscene, even if the insurers refuse to acknowledge it.”

How did Massachusetts get stuck with such an offensive labor reimbursement rate in the first place?

“The biggest hurdle we have to overcome is the clause in Part 7 of the Massachusetts Auto Policy which the insurance industry had added in 2016 and which states that the most an insurer will pay is the amount for which they can secure those repairs from a licensed facility located conveniently to the customer,” Lamborghini explained. “When shops agree to a discounted labor reimbursement rate in exchange for being added to these programs and referrals, the insurer then controls the rate they’ll pay in that market. How can one industry determine the rate for another entire industry? It’s unethical and immoral, and I don’t understand how it’s not also illegal.”

While contracts between insurers and shops are legal, situations can arise that put the shop in jeopardy. On many occasions, Tim Ronak

(AkzoNobel) has warned shops about violations related to the Sherman Antitrust Act. The Sherman Antitrust Act prohibits anti-competitive behavior, including Hub-and-Spoke Conspiracies in which “a dominant purchaser (the hub) enters into a series of agreements with its suppliers (the spokes). The hub facilitates and enforces collusion between the spokes, often because they want to achieve a specific objective,” according to Ronak, using the example of a market where two of four shops signed an insurer contract agreeing to lower contract pricing.

“There’s no problem with a closed agreement to perform work at a lower rate – until customers don’t want to go to those shops. Now, the insurer enters an exchange with parties that aren’t part of their agreement, and they may insist that the prevailing rate is lower than the average market rate because they’re including contract rates in their calculations.

“That insurer could now be accused of a Hub-and-Spoke Conspiracy because they’re using this information to harm those outside their agreement. Further, if a referral or program shop surveys at their door rate and the insurer coerces them to change their survey to reflect their contract rate, that coercion gives the Clayton Act footing, so the shop could be sued. Shops should avoid complicity in any such conspiracy by always surveying at their retail rate.”

Insurers’ insistence on controlling an entire market’s rates based on contracts with a handful of shops has contributed to the stagnant rate in Massachusetts, and it’s also fueled the frustrations of shop owners who simply want fair and reasonable compensation for the difficult work performed.

“Everyone on a referral or program is part of the labor rate problem, and I used to be part of the problem too,” Lamborghini

admitted. “After recognizing the economics of how insurers used those contracts to control our rates, I removed my shop from all those lists and will never be on another one.”

“Shops invest too much into training, equipment and tools to collect such a low amount,” White objected. “Our jobs are difficult, labor-intensive and intricate, and it’s already nearly impossible to stay on top of this inflation. At the same time, we have to do what’s right for the customer, and that means making sure their vehicle is safe to drive, even if we have to bill them the unpaid balance.”

Lamborghini encouraged shops to “understand that the main reason we’ve been unable to collect a fair and reasonable labor reimbursement rate comes directly from insurers being able to point to shops working for a discounted rate…and then being permitted to impose that rate on everyone, which is ridiculous when you think about it. They simply point to that referral shop and say, ‘They fix the car for x amount, so we won’t pay more.’ I wish more shops would remove themselves from these programs, and I really respect my industry colleagues who are moving past the fear and trying to do the right thing.”

Doing the right thing is impossible unless shops are safely restoring vehicles to their pre-accident condition using the right parts, equipment and processes. For most shops in today’s environment, that means following OEM requirements and recommendations, and in recent years, adherence to repair guidance from vehicle manufacturers has become increasingly important as OEMs have become more interested in how their vehicles are repaired due to its impact on consumer loyalty to the brand.

Following that trend, industry leaders have suggested that insurer referral and program contracts may fall to the wayside as shops focus more on pursuing OEM certification.

“You need to be cognizant of the fact that OEs are playing – and will continue to play – a much bigger role in how their brand is being repaired, and that momentum will continue,” stressed Pete Tagliapietra (Datatouch, LLC) during a training session at SEMA 2021. “There’s an argument to be made that OEs will have greater influence over insurers as things move on.”

His predictions seem reasonable given that 38 percent of surveyed Massachusetts shops indicated that they had obtained at least one OEM certification, while another 27 percent were pursuing certification.

“I suspect that we’ll see more specialization,” said Lamborghini, whose shop has earned seven certifications and plans to add more in the future. “Since we rarely see high-end European vehicles, we’ve chosen to recommend those customers to a certified shop. It’s not worth assuming the liability or aggravation on those cars for $40 an hour, and the high cost of OEM certification will drive the industry to the point where we’ll be unable to afford the equipment and training to effectively work on every make and model. It’s just not viable.”

Belsito agrees.

“I’m 100 percent set up to be OEM certified, but I just don’t see any reason to do it. There’s no return on investment right now, but if something changes, we’re prepared with the tools, equipment and training to just flip a switch, write a check and get certified pretty quickly.”

Some shops have obtained certification, only to let it lapse due to the prohibitive costs associated with it.

“It costs tens of thousands of dollars,” Correia recounted. “Meanwhile, we’re so limited in funds due to the labor rate suppression

that I had to let go of the certifications we obtained because it just wasn’t affordable. We’ve had to pick and choose which makes and models to deal with since training is so expensive, not to mention the tools and equipment needed.”

White had obtained four certifications but is now down to one.

“Staying on those certifications didn’t make sense given the low return on those types of vehicles. We see a lot of Honda/Acura, so we’ve decided to specialize in those vehicles, and I can definitely see the benefit of that training and subscription. I think the incident in Texas opened a lot of repairers’ eyes to the importance of following OEM requirements, and hopefully, they’ll start to see the value of certification. Even though I can’t imagine referrals/programs going away completely, it’ll be a good thing if shops are forced to follow manufacturer procedures – and insurers are required to pay for them.”

Starbard’s shop has obtained several certifications and is considering adding more to their repertoire. He’s uncertain whether the push for certification will drive shops away from insurer contracts, but he believes there’s a definitive benefit to hopping on the OEM train.

“OE certifications allow you to train, equip and market yourself to brand specific vehicle owners. Frankly, I see the industry moving toward this model of operation. Various brands are very specific and require specific training and equipment. I am already seeing scenarios where repairers are referring certain clients to other repairers based on those facility's certifications. All of this will be good for the industry if we can just get shops to invest in their business and market accordingly so that they don't have to sign contracts to be beholden to the third-party payer."

Belsito’s hesitance to pursue certification largely relates to his concerns about whether “OEMs will make deals with insurers, leaving us secondary to the process. It feels like we’re never going to eliminate insurers’ control over the process, and though manufacturers issue position statements and requirements, it’s just a piece of paper until they step up and support shops for properly repairing vehicles. Until OEMs get more involved, it’s difficult for independent repairers to operate without some kind of insurer relationship.”

Despite the challenges, Lamborghini hopes that the industry is moving away from insurer contracts and toward OEM certification. “We’ve always had one entity that assumes the liability for repairing the car correctly, and we need to get paid appropriately to do that. On the other hand, we have an entity focused on cutting costs. And now, OEMs are getting more involved because it’s a way to solidify their relationship with the customer, and since they’re the ones who engineered and built the vehicle, it stands to reason that they have some idea of how it should be repaired.

“Anyone interested in surviving and thriving in the collision repair industry of tomorrow needs to look at OEM certification to keep their business moving forward,” he added. “If you’re not repairing cars to OEM requirements, there’s a problem, and insurers need to recognize their part in that problem.”

Although Correia foresees OEMs getting involved enough to require research and documentation, he doubts that will resolve the problem. “We’ll still have to deal with the insurers, and we’re already doing a ton of work that didn’t exist 10 years ago. When you’re on a program or referral list, you can’t even balance-bill the customer, and while I don’t want to charge the customer for administrative fees, I don’t see another solution to getting our industry back.”

Should I Let That Car Go?

I got a telephone call from a collision repair shop owner who had a problem that I had heard before, but this time with a big twist. The shop was in the middle of repairing a car that had been in a collision but was waiting for certain parts to come in. Since it was barely drivable, the car would be a danger on the road; however, the vehicle owner showed up and demanded the shop release his car immediately and let him drive it home.

The shop owner was beside himself. Because of the condition of the car, he was legitimately concerned! If he let the car go and the car got into an accident, could someone sue him for letting his customer drive off in a car the shop owner knew was unsafe to drive? Additionally, how was he going to get paid for the repairs if he let the car go?

The shop owner refused to release the car, but the vehicle owner became increasingly adamant and ended up calling the police. When the police arrived, the shop owner pled his case, emphasizing the safety issue; however, the police sided with the vehicle owner and demanded that the shop let the car go. After a considerable period of time and argument, the police actually – and bizarrely – arrested the shop owner for larceny, put him in handcuffs and grabbed the car’s keys to give to the customer, who then drove the car home.

Was the Shop Owner Right?

As noted above, this is not the first time that I have heard of this issue, nor is it the first time that I have heard of the police being called. But it certainly is the first time that I have heard of the shop owner being arrested. In every other similar matter in which the police were called, they have come to the shop, heard what the shop owner had to say and told the customer that because it is a civil matter, not a criminal one, there is nothing that they can or will do about it.

In my opinion, the shop owner was correct in what he was thinking. This truly was a civil matter and not a criminal one. And I also feel the police were incredibly wrong in what they did. Indeed, the shop could have faced a huge problem if it had let the car go and the car got into a collision, particularly if someone was seriously injured. The shop did not steal the car; it had been brought to the shop voluntarily, and the shop had a signed repair order in hand.

What Can You Do to Protect Yourself?

The shop owner in this case may have been correct in his thinking, but perhaps not so much in how he handled the matter. If you find yourself in a similar situation, consider the following:

The garage keeper’s lien issue. If you have not received full payment for the repair work yet, it may be more prudent to emphasize the payment issue, rather than the safety issue, when dealing with your customer or with the police if they are called. In Massachusetts, if you are in the business of repairing motor vehicles, if you are a registered motor vehicle repair shop, and if you have a

signed repair order that complies with applicable law, then you have a possessory garage keeper’s lien on the vehicle being repaired. You have a lien against the car “for proper charges due…for the storage, work and care of the same,” and you have a statutory right to keep the car until you get paid. And there is a written statute on point that you can print out and show to anyone who will look at it.

It does not matter if you have received partial payment or if you have obtained a signed “direction to pay,” instructing your customer’s insurer to pay you directly for the repairs being made. If you have not received full payment for the work that you have done, for storage charges that have accrued, for tow charges and for any and all other legitimate and “proper” charges related to the repair, work upon and care of that car, then you have an enforceable lien.

Further, you can let your customer and the police know that, if they really want to push the issue, then the customer can go to court to pursue the statutory civil remedy available to them and post a bond for the full amount that you are claiming to be due.

The safety matter. There may be times that you cannot, or do not want to, make the garage keeper’s lien an issue. Perhaps, you already have been paid in full for the work that you have done, or the customer has posted a bond. Or maybe you just want to get the car off of your lot and the customer out of your hair. If you want to protect yourself from being sued for negligently releasing a car that is dangerous to drive, then there are still alternatives that you can consider, although none of them can be guaranteed to give you absolute protection.

You can start by insisting that your customer sign a document that absolves you from liability if you release their car to them – a so-called release and indemnity agreement. It is not the purpose of this article to set out the specific language that should be in such a document; rather you should seek the advice of your own legal counsel, but essentially, the document should specify that you have advised your customer that their vehicle is not safe to drive, that you have advised them not to drive it, that you have advised them that driving it could result in further damage to the car, possible malfunction of the car while being driven, possible damage to other vehicles or property, and possible serious physical injury or death to anyone in the car, or to someone outside of the car (whether in another car or just walking down the street).

Further, the document should have language saying that, in consideration of you releasing the car to your customer, they agree to hold you harmless and release you from any liability or claims for any damage or injury that occurs. The document should also say that they agree to defend you and indemnify you if someone sues you as the result of suffering monetary damages or physical injury or death because of operation of the unsafe vehicle.

If your customer refuses to sign such a document, be prepared to physically hand them a written notice that you have determined

[LEGAL] PERSPECTIVE by James A. Castleman, Esq.

[LEGAL] PERSPECTIVE

continued from pg. 36

that the car is unsafe to drive, which warns them of the potential consequences of doing so. Any such document should include large lettering at the top, identifying the document as a “WARNING” (or similar language). The document should also include language that reiterates that you’ve warned the customer that operating their vehicle is unsafe and that you will not be responsible for any monetary damages or personal injuries that result from their decision to operate that unsafe vehicle. Make a copy of the written warning that you have given, as well as the date, time and to whom it was given, and keep that copy in your file. While not as good as a signed release and indemnity agreement, it may protect you.

Another alternative is to tow the vehicle to the customer’s house and leave it in their driveway. If you do so, you still should try to get your customer to sign a release and indemnity agreement, or at least give them a written warning about the dangers of operating their vehicle. By doing this, no one can claim that you negligently let your customer drive their unsafe vehicle off your lot, so there may be an added degree of protection for you. If you choose to do this, do NOT leave the vehicle on a street near your customer’s house or on other public or private property. It must be left on property that is either owned by your customer or over which your customer has the right to access and control.

As noted above, none of these alternatives can be guaranteed to give you absolute protection. Further, even if your customer signs a release and indemnity agreement, if someone else is injured and sues you, but your customer has no assets and not enough insurance

coverage (or no insurance coverage), then you still may be on the hook to the other person. Because of this, it is imperative that you have adequate garage keeper’s liability insurance. Make sure that you have purchased sufficient liability limits, and if possible, confirm that your insurance will cover you in such a situation. You may even want to ask your liability insurer up front if they have advice about how to protect yourself from facing a claim for release of an unsafe vehicle. It certainly would be in your insurer’s best interest to do so.

Conclusion

Release of a partially repaired car that is unsafe to drive can be a sticky situation, and it can potentially make you liable for any damages or personal injuries that occur as the result of operating that vehicle. Like the repair shop owner mentioned at the beginning of this article, it is possible that you could find yourself in this difficult position, uncertain how to handle it. If so, it’s important to know what your rights are, what the law says and what you can do to protect yourself.

Attorney James Castleman is a managing member of Paster, Rice & Castleman, LLC in Quincy, MA. He can be reached at (617) 472-3424 or at jcastleman@prclawoffice.com

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