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auto body
Hello all. Does anyone out there do auto body repair as well as mechanical? We are thinking about buying an existing auto body shop and are wondering how it’s working out for anyone. Thank you,
Patrick
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5 Replies
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I would think that the general public would like a “one stop shop” to take their vehicle to. What little I do know about the collision industry is that it is a whole different animal. Talk with SEVERAL collision shop owners in your state. How do they feel their industry is doing ? Are the Insurance companies dictating how they repair cars, and, at what price ? ( the insurance co price or your price matrix ) There have been new EPA regulations on painting. Is the shop your interested in compliant ? Are there Google comments about this shop ? And if so, are the comments good ? I hope this is helpful and I wish you good luck.
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We have had both a service business and body shop for over 35 years and it has worked for us. Some of the keys for us have been, it is all under one roof, we have built up relationships with insurance companies that has taken years to establish, the service department and body shop feed off one another in terms of repeat customers. Each dept. is managed differently, the techs have a different mindset. Massachusetts has one of the lowest collision repair labor rates in the country (as dictated by ins. cos.). It seems that survival is dependent upon high volume and good cycle times. Small body shops will struggle in Mass. as Direct Repair Programs (DRP) gain popularity.
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Our business had started as a mechanical only repair shop until 1990 when I took over. At that time I felt better use of our sq footage could be put to use as a complimentary service to the mechanical repair. The premise is a good one for all the reasons already mentioned ie. one stop and departmental synergy however the start up was longer than I anticipated. That said if you have the cash flow to help support an under performing department I believe that it is a good idea. One possibility to help shorten the start up would be to sell your soul to the used car dealers around you as they are always looking for discounted paint and body work. Do this only for the first one or two years and focus on converting existing mechanical customers into body repairs. It will happen but will take time.
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We have a Body shop at our dealership. At first, it was rough, but after a few rounds with different “body guys” we finally found good
people and it works out great.
Lee Smith
Johnson Dodge
Meridian, MS
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I would suggest researching your potential market, are there any MSO’s (Multiple Shop Operator’s), or franchises (ABRA, Carstar, etc…)? If they exist within the market you’re looking at servicing, not only will insurance referrels be difficult, but the margins will be lower as a direct result of their presence. What the insurance industry likes to refer to as PCP (Prevailing Competitive Pricing?. Another concern if you choose to pursue the business, Be sure it’s set up a as seperate business from your mechanical operation. If not the insurers will have a negative impact on your current margins, as they would expect you to lower your rates/parts margins to the PCP. By the way the PCP for the most part is established by the insurers and good luck getting the information they claim to use to compile their results. It truly is a different way of doing business and you’d be wise to treat it as such. Good Luck.
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