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Thread: Consent Decree to be Sunsetted

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    So, Bill...... how many shop owners do you think there are that invoice insurance-to-be paid, labor based on total cost/profit expressed by an hourly rate? And do it without using any part of an insurer demanded estimating platform(less parts identification)?

    And by the way, did the shop mentioned begin invoicing on real cost/profit?

    Let me answer that......no. And why not? Because he/she/it knew two things: the cost in money and time to litigate in an environment where all the advantages are with the insurance industry (resources/influence), and he would be taking the tiger by the tail and soon his business would not exist.

    And let me add, the CD effort is based on hope without substance rather than factual, demonstrable damage to interstate commerce.
    Last edited by Roy Smalley; 09-09-2019 at 12:20 AM.
    Roy Smalley,
    Texas

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    Roy,

    I write my estimates in units of cost. (so many dollars per operation)
    I use the books as a guide for new models that I have not yet worked on, then I use my own judgment as how many units to write for.
    The book is also useful for the proper nomenclature of the part.

    When asked for my rate. I have it posted as one unit is equal to approximately one hour of time, ( plus or minus) @ $XX.00.

    I do not bill the insurance company, I bill the customer direct.

    The only reason that I allow the insurance company to view the vehicle is because the state law requires it. Rarely do I agree with their appraisal. I will though, give a copy of the invoice to the appraiser, when the job is finished.

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    Roger, again, you prove my point. How in the world can you say you write based on cost (at least that is what I understand) and in the next moment say you use the book as a guide on new models? It matters not if cost is based on old or new repairs. Your cost is the cost. I can't tell you how many times I have heard this statement by repairers. "I need the estimating platform....." It is usually because they are incapable of understanding costing completely so consequently they can't understand that ANY use of a guide (other than parts descriptions and numbers that come not form the guides, but the OEM's in the first place) validates the use of "the book" as you put it.
    Roy Smalley,
    Texas

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    I think we all know the answer to your question, Roy.....none. I think an hourly rate has to be at least considered as a measure of how to bill for the shop's time, even though it may not necessarily be disclosed. I know of no shop that determines actual cost of operation and adds the margin of profit that THEY deem appropriate, the method used by any other retail business to determine the value of the product being sold. In the case of collision repair shops, tangible products like parts and materials are being sold but an intangible product is being sold as well, the shop's time. I can think of no other way to determine the value of the time being sold but to apply a unit of measure, or rate, to each unit, or increment of that unit, in the form of a predetermined rate for each unit, as determined by the shop.

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    Labor, parts, materials all must absorb expense and each in turn should have a profit margin to continue to exist as a business. Simple example if you produce 10 units and the total cost for the period is $100, then the $10 unit cost is spread over each 'department'---- labor, parts materials and profit added to each to achieve the company goal. Too often, usually for simplicity, labor is assigned to absorb all expense and profit. Certainly the insurance industry pushes this theory and that theory forms the basis of the platforms they insist repairers use. The insurance industry itself completes the circle by providing a standardized labor rate a business can charge when they use the pricing platforms....as well as an 'acceptable' mark up on parts/materials........not to mention, they don't follow the pricing platform is it is not to their advantage!

    The programs used by insurers/repairers to estimate and invoice give no consideration to any labor cost except time to perform an operation. No profit, no overhead. Not only are those missing, actual complete operations are omitted. Yet somehow in some unknown fashion, but one that is clearly not scientifically or statistically supportable, they provide the actual time necessary to perform an operation all the while omitting all the operations. Repairers follow this path of destruction like Pavlovs' dog because of ignorance, and fear.

    It is a simple fact that everyone knows but have been unable to express in adequate fashion, price for repairs cannot be determined before the fact of repair, (much less account for the variances between each and every repair, environmental differences and so forth normally accounted for by statistical review with standard methods). And to establish a standard time that MUST be followed, in my opinion, by ANY entity violates the basic rule regarding establishing price in interstate commerce. EVERYONE in collision repair, in automotive repair acts the same. This practice has never been validated by the FTC or even addressed by the DOJ as far as I know. The practice establishing predetermined pricing with insurers and health care providers however, is legal, but that is another story and just as destructive since consumers have been eliminated from the pricing process.

    Can you imagine the collision industry getting together and decide what labor rates to charge and profit margins across the country? So what is the difference between how it is done, and that?

    There is no escaping the fact that repairers will not address the root cause: allowing others to determine the price they will charge. So existence/sunseting the CD makes absolutely no difference.
    Roy Smalley,
    Texas

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    Aren't you glad we are old and retired? I love a good fight more than most but not every damn day of my life. I have noticed that since I retired, I have to look for things to be mad about.

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    Bill LOL.... I haven't been angry in a long time particularly about collision repair. Ain't good for the elderly.

    But I am amazed at what I see.
    Roy Smalley,
    Texas

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    Roy,

    Quote "Roger, again, you prove my point. How in the world can you say you write based on cost (at least that is what I understand) and in the next moment say you use the book as a guide on new models?"

    Please notice that I said that I write my estimates using the guide sometimes. My invoice is another mater.

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    Roger, to summarize one final time, please don't take my comments as personal except to point out over many years, collision repairer's inability to recognize their own failures, failures that contribute overwhelming to their own demise. The most egregious is, repairers depend on those that have no legitimate information to support their data (except parts numbers) and are not part of the repair contract, then like you, still use the pricing platform. And, pay for it!

    Truly incomprehensible that virtually no repairer can see their own part in this scheme. My opinions through out.....
    Roy Smalley,
    Texas

  10. Join Date
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    Roy,
    No problem, I take nothing personal.

    The one thing that I find unbelievable (except for the fact that it is true) is that a business man would let a third party set the pricing on their invoices.

    I would compare that person to a pet dog that will take any scraps from his master and still be faithful to him.

    ( I hope no dogs take offence)

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