When you want to know how to choose an auto body shop, there are many things to consider. You are likely to receive several opinions about where you should bring your car. Most of those opinions are based upon the experiences of friends and family, or guided by your insurance company. The whole process can be confusing, and if you’re not careful, very costly. In this article, we will share with you some important points to consider before making a decision.
According to IBISWorld, the auto body shop industry is a $50 billion market, with more than 125,000 businesses in the United States. And while it is not unreasonable to believe that not all shops are equal in quality and performance, the average person may have no idea where to begin finding the right shop.
Let’s begin by defining a few terms.
MSO – Multi-Shop Operations. These are regional and national brands of auto body shops. They can be corporately owned, franchises or (in rare cases) independently owned shops. In most cases, these organizations have grown by buying up their competition. Their primary business model tends to be volume and profit driven. The most prolific MSOs include Gerber, Caliber, Service King and CARSTAR.
Dealer Owned Shop – This is just what it sounds like. Many car dealerships have multiple locations, spread across multiple brands. In order to keep their customers coming back to them, they often establish their own auto body shops. The challenge that they face is the sheer volume of vehicles that they sell often overwhelms the body shop’s ability to service their customers.
Independent Shop – These are typically single-owner body shops, and most often they consist of a single unit. Their primary focus tends to be quality over quantity, and what they lack in size is typically made up in specialization and flexibility.
DRP – Direct Repair Program. A DRP is a relationship between a body shop and an insurance company. Almost every insurer offers DRP’s to body shops (MSO’s and Independents alike). The nature of the relationship goes something like this: the insurance company promises to “recommend” their clients to DRP shops, and in return the DRP shop promises to follow the insurance company’s estimates and repair plans. (Many shops have several DRP’s with several insurance companies)
With these four terms now defined, the question of how to choose an auto body shop can start to be answered. And while it may seem fairly straightforward, the devil is in the details. We will explore some of those details below.
Your insurance company is not always a good neighbor.
According to The Zebra, in 2020, the estimated revenue for the automobile insurance industry is $288.4 billion. Automobile insurance premiums Insurers are profit-driven businesses, and since 2011, insurance rates have skyrocketed by 29.6% nationally.
When you file a claim with your insurer, they will always provide you a list of the “preferred” auto body shops (see DRP) to take it to for repair. The reason they do this is simple: they can now control the expenses of your vehicle’s repair. The DRP shops MUST go along with the insurance company’s recommendations for parts and labor. And in most cases, that includes using 3rd party aftermarket parts, because they are cheaper that the original manufacturer’s parts (OEM).
Think of it this way. You pay your premiums to the insurance company for years. THEY make huge profits off of these premiums. Then, when you take your car to a DRP shop, the insurance company cuts corners to save THEM (not you) even more money by only allowing used or third party aftermarket parts. That’s more profit for THEM (not you). And on top of that, the insurance company dictates the labor rate that they are willing to pay the DRP shop, which translates to THEM (the insurance company) making even more profit by keeping labor lower than a reasonable rate.
How can the insurance companies get away with all of this? Because they can afford it. They use terms like “industry standard”, which sounds right… but they use their relationships with their own body shops (MSO’s and DRP’s) to manufacture the numbers in their favor. And the unsuspecting consumer (you) have no idea of all of this happening behind the scenes.
So, when you are looking for how to choose an auto body shop, we recommend that you start by considering shops that don’t have binding relationships with an insurance companies. It’s as easy as asking them: “Do you have any DRP relationship with my insurance company?”
The next thing you should be aware of is the exact wording of your insurance policy. This goes beyond the few bullet points printed on your insurance ID card. If you do not have a printed copy of your policy, it would be advantageous to request one from your agent. Within the wording of that policy, you will find the specifics about what your insurer can or cannot do. For instance, is there a line in your policy that states that the INSURER can choose to use 3rd party, used or aftermarket parts? If so, you may be stuck having to pay the difference for OEM equipment.
And why would OEM equipment be important? Well, who knows the correct way to repair your vehicle better than the one who designed and built it? When it comes to structural and safety components, is “close enough” good enough? Would you cut corners on the very parts that could save your life – or cause you to lose it?
That’s what this article is all about. Knowing what goes on behind the scenes is super important. There are many, many great body shops out there. But when you know how to choose an auto body shop, armed with valuable information that can save your life… you can make the very best decision.