Lately I have been hearing some unique ways of describing what my marketplace area is from a few DRP insurers while discussing searches and ordering, especially regarding salvage parts. Here are a few examples:
1. The marketplace is anywhere we can order a part.
2. If it can be shipped to your shop’s door, that is the market area.
3. It is like Amazon — you can order anything from anywhere.
4. If you fixed the car in your (home) garage, you would order the part that is cheapest from "XYZ" state.
Most repairers who have DRPs have complained about this in recent years. Thanks to a number of automated search tools, it is relatively easy to shop all over our great country. What is not easy to do is deal with quality issues, returns, refunds, job delays and all the accompanying administrative work and expense. Far too often parts purchased from vendors afar require special payment (as we typically don’t have accounts with them), have quality issues, have clean-up time issues (they are less motivated since we don’t have relationships including frequent purchases), have return issues (for the same reasons) and have refund issues.
Some insurers will only pay the least expensive price found as long as the part located sounds like it may be acceptable. According to the Automotive Recyclers Association (ARA) website, there are about 9,000 auto salvage business locations in our country employing about 140,000 people and generating $32 billion in sales. Of course in such a scenario the key question is whether or not a located part is truly acceptable as described from the various vendors, most of which we have little or no experience with. When expressing our concerns to these insurers the following are some of their responses:
1. Your local vendors should/can price match the part.
2. Your shop does not need an account, they will take a credit card.
3. If you have a problem, let us know and we will take them off our list.
4. If you fixed the car in your garage you would order the part that is cheapest from "XYZ" state. (Which is a silly argument of little relevance. This is of little comparison with a professional collision repair from a legitimate business.)