The labor rates that insurance companies pay bodyshops to repair damaged vehicles aren’t high enough to cover the cost of repairs, according to a survey released today of nearly 300 collision-repair facilities across the state.
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The 2012 Florida Labor Rate Survey, commissioned by the Florida Autobody Collision Alliance (FACA), shows that while materials, labor and equipment costs continue to rise steadily, insurance company labor rates are not keeping pace and, in many areas, have not increased in nearly seven years.
“FACA is grateful for the participation of so many shops and we’re pleased to be able to provide this information to the collision-repair industry,” said Cathy Mills, FACA’s executive director. “But to most of us, this is not news—we’ve seen costs rise and margins shrink year after year with no movement on labor rates.”
Every year the cost of doing business continues to rise for bodyshop owners. Paint and material costs, for example, increase each year—sometimes twice in a year. Paint costs rose for bodyshops by at least 3.9 percent over the prior year, with some shops seeing up to a 7.8- percent increase.
Without reasonable and regular increases in the amount insurance companies pay to repair vehicles, bodyshops are finding it harder to recover repair costs. Shrinking margins make it much more difficult to attract and retain skilled technicians or to keep pace with the advanced equipment and training needed to work on today’s newer vehicles.