Prior to opening Exclusive Auto Collision in 2003 in Ramsey, NJ, Tony Lake was an auto damage appraiser for 20 years.
“I saw that high-end vehicles were not getting repaired the way that I thought they could be repaired back to OEM manufacturers’ standards,” said Lake. “There was a big gap between a quality repair and a non-quality repair going on in the industry.”
A body shop was for sale in an exclusive area of New Jersey, so Lake decided to purchase it and build a specialty business. He now repairs high-end vehicles such as Audi, Mercedes and Porsche.
Autobody News talked to Lake about the importance of OEM certifications and the steps he is taking to stand up to insurance companies to ensure vehicles are repaired back to pre-accident condition.
Q: Why do you recommend body shops invest in OEM certifications?
A: Hands down, the OEM training you get for your employees is the most important thing that the certifications offer. Soon after I opened my business, Mercedes-Benz had a certified collision program that I joined. I became one of the first certified collision centers for Mercedes in the state of New Jersey. Now, I’m certified by Acura, Audi, Cadillac, Ford, General Motors, Honda, Hyundai, Infinity, Kia, Mercedes, Nissan, Porsche and Volkswagen.
I tell the shops that are not certified and not thinking about getting certified to consider moving into a different career. There’s no way they will be able to repair these cars properly without having OEM training of some sort, especially on specific vehicles. They are way too complicated, and there are too many different metals and plastics utilized now. You can see by the recent lawsuit in Texas that you are putting your family, your customers’ family and your livelihood at stake if you don’t repair the car back to OEM manufacturers’ standards.
Q: How do you stay up-to-date with training?
A: We’re affiliated with all these vehicle manufacturers and they have training classes. As soon as they become available, I send my technicians. I also employ Larry Montanez, who was an I-CAR instructor and owns P&L Consultants. Larry is able to pass along a lot of the training to the guys in the shop. We’re currently working together to share OEM techniques and methodologies with all of our employees.
A few years ago, I ran seminars with Larry at my shop on a regular basis, and invited the insurance industry to show them the new methodologies that the OEM manufacturers had come out with and the new equipment you need to fix these cars properly, and to try and educate them to what is coming down the road.
Q: Congratulations on being named Stan Wilson/New Jersey Automotive Body Shop of the Year Award in 2015. Can you tell us about this honor?
A: Thank you. The yearly award is given out by the Alliance of Automotive Service Providers of New Jersey (AASP/NJ) to recognize the shop they feel has gone over and above to try to become a quality repair shop. Two years ago, they selected Exclusive Auto Collision, primarily because of the dedication I have to the industry [regarding] repairing cars back to OEM manufacturers’ standards. They also recognized that I’ve taken on the insurers because they are not willing to compensate the auto collision centers for the procedures, parts and OEM manufacturers’ repair methodologies.
Q: What steps have you taken with insurance companies to ensure vehicles are repaired properly?
A: Like many shops, I’ve found that the insurance companies are dictating more and more what we should be compensated for. As a result, I started initiating lawsuits against the insurance companies in order to get compensated properly for the repairs I’m doing. Over the last five years, I’ve sued several insurance companies and will continue to sue to ensure that proper and safe repairs are done.
Many times, I’ve found that the insurers refuse to pay you for the procedures and parts that are necessary to put the car back to pre-loss condition. I’ve felt that they force you into a corner, to do either one of three things: do the work for free, charge the customer or repair the vehicle improperly. I refuse to do any of those. The contract of insurance states that once an insurance company decides to pay the claim and money, that can’t tell a shop how to repair a car. It’s in every insurance policy from New Jersey to California, Texas to Utah.
That needs to be known by the collision centers. Once an insurance company decides that they won’t take the car and repair it themselves---which they have the right to do, according to the contract of insurance---and they pay with money, they give up their right to fix the car because they are not liable. The only person liable for that repair is the repairer. If you do the repair improperly and something happens, you can wind up like that guy in Texas with a $42 million lawsuit.
I see it getting worse and worse every day---the insurance industry trying to be so competitive with cutting prices and their advertisements about how much money they can save the consumer.
It seems that there is nobody in the governmental agencies that is taking a look at them because they have such a strong lobby group. Many shops feel that they don’t pay for the proper repair procedures, and people are getting hurt or killed every day on the highways. It’s sad that nobody is stepping in from our government.
Over the last 15 years in the state of New Jersey, I believe that most of our insurance commissioners have gone to work for insurance companies after they finished their term. From what I noticed, most of the employees that worked for the insurance companies wind up either working at a state level or back in an insurance company.
Q: How can collision shops stay educated about this industry?
A: First, I would tell them that they need to become businessmen. Most of the people in our industry aren’t businessmen. They were body laborers who wound up owning a shop. They need to know what it costs to run their businesses, and I believe they should stop bowing down to insurance companies to do these direct repair programs and put themselves in jeopardy for getting sued, such as the recent case in Texas. They need to educate themselves about the repair procedures necessary to fix the cars properly. The most important thing they need to do after they become businessmen is learn who their customer is. The customer is not the insurance company. It’s the person who owns the car.
Q: What will happen if shops don’t take the time to make education a priority?
A: Time is running out for them. By 2020, there will be a lot of companies out there that are going to do post-repair inspections. My facility has conducted about 10 post-repair inspections to date, and the re-repairs have been about double the amount of the original repair cost. The body shops have had to repay the insurance company for my bill. I’m in the process of opening a business that primarily focuses on post-repair inspections.
Q: Why do you believe shops should band together?
A: A lot of body shops are afraid to talk to each other because of antitrust laws. In this industry, if we don’t start standing together as one and fight together, we’re going to continue falling on our face because the insurance industry is going to win every time.
There are a few shops across the country that are doing what I am in terms of taking on the insurance companies, and every year more and more of us are starting to sue insurance companies. The shops that are doing the work for insurance companies the way they are doing it is only hurting the industry. They need to move out of the way.
The last thing I want to do is re-inspect a car and charge another body shop $15,000--$20,000, or possibly total loss a car that is $50,000 and make them write a check out of their account. I don’t want to do it, but they are forcing me to because they are the ones who are causing the problem in the industry. Everyone likes to blame the insurance company. It’s not the insurance company’s fault. It’s our fault for allowing them to do what they are doing.
I encourage other shops to join associations, and stand together rather than pick each other’s pockets. My business philosophy is that I want to fix fewer cars and make more money. I don’t want to fix 100 cars and make no money; I want to fix 50 cars and make some money.
I really hope that our brother shops across the country---about 40,000 of them---start standing together, because together, we’re strong.
Stacey Phillips Ronak