Automotive & HD Business Management Articles.
Bob Greenwood. January 1, 2019. ( over 3 years ago ) 1,442 views



Vehicle technology is exploding today and over the next 2 to 3 years, it will change how a shop has to do business in terms of staffing, education and establishing its labor rates.

According to the American Automobile Association (AAA), vehicles equipped with advanced driver assistance systems (ADAS) such as automatic emergency braking, blind spot monitoring, and lane departure warning, can cost twice as much to repair following a collision.

Even minor incidents can cause damage to expensive sensors found behind windshields, bumpers and door mirrors. Removal and replacement (or repair) combined with the cost of calibration could easily add up to $3,000 in extra repair costs, AA reports.

With one-in-three Americans unable to afford an unexpected repair bill of just $500, AAA strongly urges consumers to perform an insurance policy review and consider the potential repair costs of these advanced systems if in an accident.

For the vehicles in AAA’s study, the repair bill for a minor front or rear collision on a car with ADAS can run as high as $5,300, almost two and half times the repair cost for a vehicle without these systems.

With that being understood, where does the average shop fit into all this in terms of how to charge for these repairs when a sensor fails and it has to be replaced and recalibrated during basic maintenance intervals?

Consider at this level of knowledge you are dealing with a “Master Tech” who clearly understands the ins and outs of these software platforms. His or her time is not cheap as they have very unique skills and knowledge. Their time must be billed out at a separate diagnostic rate. Management must understand the math of their business in order to calculate the correct labor rate to perform such a highly skilled function. It has nothing to do with any other shop and how they charge for this service. Your math is different than their math. If you or they don’t charge correctly they will not be able to afford the retention of these skilled technicians. Also the labor rate does not include state or local taxes, shop supplies fees or hazardous materials disposal charges.

As technology continues to evolve, clients need to be better educated and more aware of the vehicle they are considering obtaining and the vehicle’s capabilities. This includes understanding how the vehicle systems work as well as how much repairs may cost if damaged. How is your shop preparing to educate your clientele about modern vehicle systems? You can’t ignore it, you must embrace it. Remember, you are in the relationship business and you are being hired by the client to look after them. Education of their vehicle and how it must be looked after and what the potential financial costs are in “worse case” scenarios is part of the relationship.

Our entire industry must clearly understand the Trade days are done in our industry. This is now a true Profession as the skill level required to work “in” the business is dramatically different as well as the skill level required to work “on” the business is dramatically different.

What’s YOUR game plan for 2019 to make sure you are still in a strong position to retain your clients and their “trust” in you? 

Bob Greenwood

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Bob Greenwood
Surrey, British Columbia, Canada