Chapter 5

SALES

INTRODUCTION

Auto body repair shops generate business income by

providing and selling parts and services to the customer and the rebilling of subcontracted or sublet materials and services. Additional income may be generated by some shops through the purchase, repair, and sale of salvage vehicles.

The repair process in a body shop typically begins with the preparation of an estimate by the shop, either on the premises, or in the field if the car is not drivable. The estimate includes detailed categories of expense for labor, parts (at the retail list price), the cost of work to be done off the premises, and towing, if necessary.

If the owner of the vehicle is to bear the full expense of the repair and chooses to deal with the shop, a repair order is written reflecting the figures already on the estimate with any additions or deletions specified by the customer. The customer signs the repair order to authorize the indicated work to be done.

If there is an insurer, the company is notified and

dispatches an adjuster to the shop to make its own

inspection and estimate of repair costs. This estimate is often lower than the one written by the shop because the insurer may not allow the full labor rate customarily billed and may eliminate part of the standard time to repair as duplication. For instance, the time required to paint a fender and the adjacent door panel may be considered less than the sum of the times needed to paint each section alone. Further reduction can be made for "betterments" and the cost to repair rather than replace parts or the use of "after market" or used parts instead of new factory parts.

The cost of new auto body parts and the suggested

installation time are listed in the Mitchell Manual,

which is invariably used by both the shop and the

insurance adjuster, but judgement about what needs to be replaced and what does not often leads to substantial variation in quoted and approved repair costs. The estimates below, provided by a recent claimant, illustrate the differences possible. The insurer's estimate shown is the final figure agreed to by the

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