For most autobody and collision repair shops, the main income source is from insurance claims. Although it’s steady work for body shops, especially for those associated with franchised dealerships, the insurance claim process is tedious and resource-consuming, often with tens of hours of communication and many more hours of delays awaiting approvals. Profit margins are much thinner than in other departments due to lower labor rates and administrative costs.
However, autobody shops can be a profit driver, whether at a dealership or a standalone store. Where insurance claims are consistent work that pays the overhead, there are other opportunities that can elevate your autobody shop further into the black.
There may be investments to be made to successfully boost the bottom line, but the results are more than just profit. Customer satisfaction will be higher, and there’s less need for advertising with higher referral rates from those happy customers. Here are three ideas.
Paintless dent removal
Especially in the area known as Hail Alley, as well as many other states, hail storms can pepper vehicles across whole cities. They’re usually not write-offs, and it can take months for insurance companies to catch up on the volume of claims. Most of these vehicles will go through a dent repair specialist rather than a body shop, but there’s no reason that a certified autobody shop can’t do the work too.
Have multiple body techs trained in paintless dent removal, and acquire the tools needed to do the job. In most cases, these claims are paid per dent, and there can be dozens – even hundreds – of dents per car to repair. It’s relatively fast work, though detail-oriented, but is all labor. For cars that have dents that can’t be removed, the claim is captive for the body shop to complete the remainder.
|Related: Tools the service department should supply for techs|
Spray-in bed liners
No other department is better suited to applying spray-in bed liners, and it’s a far superior product to drop-in liners. Body shops can mask the truck bed and have the equipment necessary to prep and spray the material onto the painted surface. At an average of around $500 per spray-in bed liner, it’s profitable since it only takes a couple of hours on a new vehicle, and extra prep time can be charged for older vehicles.
With trucks remaining the hottest segment among new and used vehicles, there should be a steady stream of vehicles coming through your door.
High-quality restoration work
Most body shops shy away from working on high-end restorations and expensive paint jobs since the clients tend to be very particular. However, there are very few opportunities to showcase your company’s abilities than a restoration project. And the car doesn’t have to be a client’s vehicle – it could be a car that’s owned by you or the shop.
What’s important is that it acts as a billboard. It can attract some of the high-end clients willing to pay $20,000 for a pristine paint job, but it’s even more likely to draw in customers impressed by your quality and workmanship. This is a huge confidence-builder for customers looking for a trustworthy place to take their insurance claim as well as any paid repairs.
The collision shop shouldn’t be thought of as a department that’s successful if they achieve a paltry 10% profit margin. There’s much more that it’s capable of generating if the right work is sought out.
Did you enjoy this article from Jason Unrau? Please share your thoughts, comments, or questions regarding this topic by submitting a letter to the editor here, or connect with us at email@example.com.