...pick away at the estimate? Ten years ago, a gallon of house paint cost $30 and now it’s more like $100. Techs used to make $20 an hour, but how can they survive anywhere in this country at that rate? They need to be I-CAR trained so that they can work on the cars today, but it’s hard to pay them a fair wage with the cost of parts and materials and the insurers trying to save every penny.”
The labor rates need to reflect today’s prices with inflation and other factors, Rajczi said. With the high cost of parts added to the fact insurers will wrestle without exception on every repair, every body shop has to deal with low labor rates.
“They’re all over the road with these rates, it’s crazy,” Rajczi said. “State Farm is at $65; GEICO is $48, and Allstate is at $52. They say they poll shops in each area, but why shouldn’t State Farm’s rate be the standard? If you own a shop, you know that the rate should be more like $85 to $100. So before we even touch a car, we’re in a hole caused by our labor rates which are ridiculously low.
“I tell the young kids, don’t get into this industry because you’ll never get paid enough,” he said. “This is not a good career choice---go to college but do anything other than this. With costs spiraling and DRPs grinding away on each repair to save pennies, body shop owners won’t ever be able to pay their techs enough anymore.”
Another annoying pebble in Rajczi’s shoe is the quality of aftermarket crash parts and the way insurers try to incorporate them into his OE repairs.
“The car manufacturers should say no to aftermarket parts because they’re not road safe. They say they’re certified by the Department of Transportation (DOT) but in the end, they’re essentially counterfeit parts," Rajczi said. "You can file the holes or re-drill them, but you’re not going to get a perfect fit because they’re not the same. Techs will start hating their jobs for putting parts on a car that won’t fit right, and I don’t blame them. Give that same guy OE parts and he’s a happy tech---no stress and no arguing about what type of part to install.”
Racjzi is also done with DRPs, another way the insurance companies can control shops, especially MSOs. His biggest fear is DRPs will eventually lead to the demise of smaller, independent shops.
“DRPs are not a beautiful thing, let’s make that clear,” he said. “Smaller mom-and-pop shops will often say no to DRPs because they are family businesses and they value their reputations. But for the big chains, it all about volume, and their attitude is ‘get it done’ at any cost. The problem is you have to pay upfront on everything and the insurance company expects their check at the end of every month. So, they end up having to shuffle money around or borrow it to keep the DRPs happy.”
Can this industry turn it around, so we can all make money without sacrificing peoples’ safety and still do repairs correctly? Only time will tell, but it won’t happen until body shops start getting together and communicating openly with other shops, the OEs and the insurance companies.”
If you want to share ideas and concerns with Rajczi, he is anxious to hear from you at kensautobodyshop@gmail.com.
Ed Attanasio