By John Wolford, CEI director of client and network services
In most areas of business where people and companies want to get the best value for their dollar it’s common practice to seek three estimates instead of just one. It’s a practice that some fleets still follow for collision repairs, but the truth is it’s not necessarily the best approach and at times could just be the worst.
First, consider the time it takes to solicit, collect and evaluate the bids and notify the winner. It has taken some fleets weeks, and the staff time it absorbs could be put to better use doing other tasks, while the driver is less productive or the vehicle itself isn’t earning revenue.
Second, a fleet needs to assess whether it’s in a position to evaluate the bids accurately. With the increasing use of new metals, onboard electronics, and the computers that run them, vehicles and their repairs have become much more complicated. Most fleets don’t have personnel who have a deep understanding of the complexity of body repairs to compare the estimates and truly determine the best course of action.
Third, ask yourself: when my driver’s safety is at stake, do I necessarily want the low-cost provider? Your goal should be to obtain the correct estimate, not necessarily the lowest. That’s because there are ways for shops to keep an estimate low, and not all of them are good, like using inferior parts, materials or repair methods, or simply failing to recommend all the repairs that might be necessary. The latter is true when damage is deemed to be only superficial but hides damage that can later become a safety issue.
So here are some of the ways estimates could differ for the same repair:
- One calls for repairing a part, and another recommends replacing it.
- One specifies a new part made by the original manufacturer, another a new aftermarket part, and the third a used part.
- One recommends repair for damage that the other two shops don’t mention.
- Two quote the same labor rate, but the third quotes a lower rate.
The quote for each line item will have a higher or lower impact on the bottom line, but all the cheapest alternatives aren’t always on the same estimate.
So which shop do you choose? Let’s consider the risks that lurk in each of the above four alternatives.
Repairing a damaged part is in most cases the less expensive alternative than replacing it and is often the correct decision, but in some cases the damage is bad enough that even when repaired it can put the driver in greater jeopardy in a future accident.
Aftermarket parts are usually less expensive, and can be a good alternative but may not fit the vehicle precisely. Used parts can be a good source of savings but may require so much repair themselves that a new part is the better option. And a shop that is discounting its labor rates may make up the difference by charging for more hours than it estimated.
But what about when an estimate is cheapest because it’s missing one or more repair procedures? Selecting the low-cost shop in this case could lead to some unpleasant surprises. One is that the shop may not have been aware that the damage existed, only to find it while disassembling the vehicle, and sends you a supplement that raises the final bill, possibly to as high as or higher than the most expensive estimate. Or, worse, the shop never does find the damage and the neglected weakness causes another accident or makes one worse, with more damage to the vehicle and an otherwise avoidable injury to your driver.
But sometimes, especially when one of the bidders is known to be typically the highest-cost local shop, often a dealer repair center, competitors sometimes get to see its estimate and then bid just below it. In this case the fleet or its driver may be content that the second estimate from the independent shop was lower, when, in fact, both estimates were overwritten and they overpaid in the long run.
Why do such things happen? Put yourself in a shop’s place. In bidding contests, the shops have to find a way to compete and win, and that sometimes leads shops to submit a low and possibly inaccurate estimate, knowing they always have the option of writing a supplement.
These pitfalls are among the reasons the auto insurance industry has all but abandoned the three-bid process. In its place, the industry has created what it calls “direct repair program” networks of favored body shops in which they have confidence that they can be relied upon to do the job right for the right price as a sole-source provider. Because insurance companies closely monitor their performance, network shops work hard to meet insurer’s expectations for price and quality in order to keep its business.
The same holds true for fleet accident management service providers. They, too, assemble a network of preferred body repair shops that rely on them for business and so aim to make them and their fleet customers satisfied with pricing, quality of work, service, and lifetime warranties. Their performance is constantly monitored and those who perform are rewarded with additional business.
At CEI we go a step further and maintain a department of 15 field-experienced, licensed auto physical damage appraisers who are I-CAR, professionally certified. This staff reviews every estimate for accuracy, thoroughness, safety, proposed repair quality, and price. They carefully examine multiple photographs of the damaged vehicle and compare it to the estimate, their knowledge and several national estimating data bases that reveal prevailing parts prices and labor times for all geographic locations in the United States and Canada. CEI also monitors the shop’s labor rates to ensure that they are appropriate prevailing labor rates in their regions.
If you’re a homeowner and looking for a contractor for some home improvements, by all means get three estimates. But if you’re responsible for managing collision repairs for a self-insured fleet, unless you have extensive hands-on collision repair experience yourself, you’re far more likely to have a faster, better and more cost-effective repair teamed up with an accident management provider who requires only one estimate.