Market vs. Need

Members of the Automotive Service Association’s Collision Division Operations Committee have written an article about “Market vs. Need” that discusses auto body repair costs in relationship to insurer pay. The article was co-authored by Scott Benavidez, AAM, and April Hernandez, AAM, both volunteer leaders on the committee, and was written to ignite conversations about “Market vs. Need” within the collision repair industry.

“Every day I see vehicles that have been improperly repaired because repairers choose to repair by what they are told the market is charging versus what the manufacturer requires,” said Hernandez, owner of Hernandez Collision Center, Savannah, Ga. “This has become a consumer safety issue that affects the occupants of the vehicles as well as others they may encounter on our roads.”

“This is a topic the majority of shops, if not all shops, deal with on a regular basis,” said Dan Stander, ASA Collision Division director and co-owner of Fix Auto Highlands Ranch, Littleton, Colo. “Most shops have limited information and tools to cope with this problem. This is an excellent way to bring this issue to the forefront.”

Here is an excerpt from the article:

In the collision industry, we battle the age-old “market price” vs. “need” argument on a daily basis. Market price says we can only pay you “this much” to perform this repair, and need tells us how to repair the vehicle.
Market price: The process by which the prices of goods and services are established. Webster defines market price as “a price actually given in current market dealings.”

Need: Requires (something) because it is essential or very important. Webster defines need as “necessary duty or obligation.”

Now, need could be interpreted in many different ways …

1. We need to turn on our headlights when driving at night.
2. We need to pay workman’s compensation insurance.
3. We need to make sure we are in compliance with OSHA requirements.
But we are talking about need in a totally different way.

Let’s say you are replacing a quarter panel on XYZ vehicle and the manufacturer of this vehicle tells us to reapply corrosion protection (cavity wax) for the vehicle to meet the manufacturer’s safety standards. This would be considered a “need.” Now let’s say Johnny down the street at XYZ body shop does not charge for this and does not replace it. Is my “market price” now set by XYZ body shop, and can my repair facility continue to charge for reapplying the material? Should a repair facility get paid for procedures that need to be performed or parts that need to be replaced per a manufacturer’s requirements? Who sets the market price? Some say …

Read Full Article!
Go to the ASA website to access this article in its entirety. Visit www.ASAshop.org (click on Tools & Resources). If you would like to share your thoughts with ASA on this important topic, send an email with your name, contact information and comments to info@asashop.org.

ASA’s Trio of Refinish Fliers Available Free from www.ASAshop.org

If you have not yet downloaded the trio of ASA Refinish Fliers, now is the time. These tools compare the steps necessary for panel repair based on Repaired vs. New, LKQ vs. New and Blend vs. New.

ASA’s refinish subcommittee created these tools to help members educate individuals about the necessary steps needed to provide a quality repair. Download these free educational documents now at www.ASAshop.org (click on Tools & Resources).

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