Business Profitability Explored
Article by Kurt Lammon
Plastic repairs is an untapped opportunity on self-pay jobs and can expands revenue opportunities with self-pay customers but also helps reduce repair costs in borderline total-loss cases.
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At the last Collision Industry Conference (CIC) in Philadelphia, the theme was “Total Losses.” CIC Chairman Dan Risley noted that about 25% of non-comp claims are now total losses — up from 16% a decade ago — and he expects this trend to continue as older, non-ADAS vehicles age out of the fleet.
Meanwhile, American consumers are facing increasing financial pressure from rising food and housing costs, putting strain on family budgets. As a result, many are making tough choices about their car insurance coverage and deductibles to save money.
Suspecting that such people might be inclined to pay for minor body repairs out of pocket, I surveyed six shop owners at the conference to ask what percentage of their customers pay out of pocket for minor repairs. Responses ranged from 15% to 25%, with all agreeing that the proportion of self-pay customers has grown in the past couple of years. One reported a jump from 5% to 25% in just one year.
Many consumers avoid filing claims due to high deductibles or fears of premium hikes. In response, one prominent shop owner I talked to said that he has started offering financing options for self-pay customers — a smart move to meet this growing need.
Self-pay customers present an opportunity for shops to book profitable cash sales while helping customers save money — all without any third-party payer hassles. Offering flexible, creative solutions that help people in their time of need can also enhance a shop’s reputation and drive more word-of-mouth business.
Repair Planning
One prominent industry professional with many years of experience as an estimator told me at CIC that repair planning is the best time to explore cost-saving options with customers, such as essential repair-versus-replace decisions. Given that many minor-collision parts are made of plastic, proficiency in plastic repair is crucial for building repair plans that benefit both the shop and the customer. Bumper covers, involved in nearly every collision, offer the most obvious opportunity.
Another major area is headlight mounting tabs. With headlights now costing thousands of dollars, repairing broken tabs instead of replacing an otherwise functional unit can dramatically reduce costs — and even prevent a borderline total-loss estimate. Even the repair of minor cracks in polycarbonate headlight lenses, normally off-limits in an insurance-paid repair, would be an option for self-pay jobs. As always, the repair planner should first research the OEM guidelines when considering headlight repair.
One point of contention regarding bumper cover repair specifically is that some OEMs have put out repair guidelines that prohibit it due to the possibility that the ADAS sensors may be affected by the repair material, or even the paint itself — especially in situations where the radar signals pass through the plastic. However, these make- and model-specific prohibitions are often misunderstood to be blanket bans, leading many technicians and managers to dismiss bumper repair altogether. This may reflect a preference to avoid the added complexity of repairs, but with 25% of business now coming from self-pay customers, creative cost-saving solutions — like bumper and headlight repair — shouldn’t be overlooked.
Making the Decision
A practical decision-making framework for bumper cover repair might include the following considerations:
- If the OEM prohibits repair for a specific bumper cover, replace it.
- If there’s no OEM prohibition, but the damage is within 12 inches of a radar sensor, replace it.
- If repair is not prohibited and no sensor interference is likely, repair the bumper when it benefits both the shop and the customer.
Mastering plastic repair not only expands revenue opportunities with self-pay customers but also helps reduce repair costs in borderline total-loss cases. It’s a strategic capability that creates win-win outcomes — for both customers and collision centers.
Article Credit to BodyShop Business
What is your view on the potential of plastic repairs as an additional revenue stream for your shop? Let us know in the comments below. Also, if you found our content informative, do like it and share it with your friends.
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