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Welcome to Auto Repair Estimating. These lessons are designed to provide you with the basics to Auto Estimating. I hope you enjoy the lesson. Donnie
Lesson 8 – Generating an Estimate
Labor Time Allowed In Estimating Guides Are Not Set In Stone
“Any fool can know. The point is to understand” ~Albert Einstein
What This Chapter Covers:
This chapter covers analyzing auto damage and using the information to actually generate the estimate. It also covers what to do if the estimating guide does not provide adequate time for a procedure and how to determine if a vehicle is a total loss.
Why This Is Important:
An estimator must know how to use the information gathered during the inspection to generate an auto estimate. The estimator also needs to know if the vehicle may be considered a total loss.
Topics Covered In This Chapter Include:
• Analyzing The Damage To Complete Inspection
• Generating A Computerized Estimate
• Disputing Estimating Guide Operation Using DEG
• What Is A Total Loss Vehicle?
This chapter has been aligned with the following 2013 NATEF/ASE tasks:
•B:22 Interpret computer-assisted and manually written estimates; verify the information is current. HP-I
•B:23 Identify procedural differences between computer-assisted systems and manually written estimates. HP-G
•B:24 Identify procedures to restore corrosion protection; establish labor values, and material charges. HP-G
•B:25 Determine the cost effectiveness of the repair and determine the approximate vehicle retail, and repair value. HP-G
•B:26 Recognize the differences in estimation procedures when using different information provider systems. HP-G
•B:27 Verify accuracy of estimate compared to the actual repair and replacement operations.
Once you have all of the information you need about the accident, you may decide to assist the customer and help them with a rental car or offer to give them a ride back to work or their home. It may not be necessary for the customer to be there while you write the estimate, as it may take time, which many people don’t have.
Now the estimator can perform the thorough inspection, which may include the following:
• Visual inspection of all body gaps for misalignments, popped loose spot welds, cracked seam sealer, etc.
• Raise the hood to inspect the engine compartment.
• Raising the vehicle to inspect underneath the vehicle.
• Measuring to determine if any frame or unibody damage is present and determining the severity of the damage.
• Inspecting mechanical, electrical, and suspension components.
• Looking inside the passenger compartment and at the restraint system and interior components.
• Removing parts to gain access to possible hidden damage.
Starting at the damaged area and following the estimating sequence, inspect each part group before moving to the next group. For example, inspect the front bumper cover. If the bumper cover needs to be removed to inspect the impact absorber and reinforcement bar, then go ahead and remove it. Inspect all of the parts in the bumper section.
When performing the inspection, take photos of the damage. This is where high-quality photos are needed. The photos should tell a story on their own. These photos will be recorded with the claim and may need to be shared with the customer or insurance company.
As the estimator writes a thorough estimate, the vehicle may require disassembly of parts and/or raising the car off the ground to determine the extent of damage. For example, the estimator or a technician may need to remove the front bumper to determine what parts are damaged behind the bumper cover. By inspecting the damage this way, you should have a very thorough estimate when completed. After the inspection is completed and the estimate is generated, call the customer to discuss the repairs needed and the steps necessary to get started.
If an insurance company is involved, you will also want to discuss repairs with them. This will let the insurance company know that the customer has already authorized your shop to perform the repairs.
The main point of this lesson is to write a thorough estimate, as it serves many purposes. With today’s complex vehicles, the days of writing a visual estimate without tear down are gone. Cycle times and the lean process push to eliminate unnecessary work, which includes writing supplements on every vehicle that you work on resulting additional work for the estimator and delay the repairs of the vehicle.
A well-written estimate will also give your technicians a better idea of what all they need to do on the vehicle. The estimate serves many purposes, but a communication tool should be a vital purpose—a communication tool between the repair shop, the customer, the insurance company, and the technician.
Generating Computerized Estimates
Do you remember when businesses started using more computers? I kept hearing how much paperwork was going to be saved and how much easier the computers would make our work. Well, years later, I’m still not fully convinced of that opinion. It seems like we have more forms, files, and paperwork than we ever had before. I keep hearing paperless, but I am not seeing it. I think perhaps that for every item that goes paperless, there are two or three additional things that we must manage.
However, I do like the ways computers work and believe that we keep better records of everything. I think that we did not have a lot of the work before computers because we were not doing it. We really have all of our records at our fingertips even though it seems like a lot of work to manage.
It was painful getting to this point as an estimator. I remember the first computerized estimating system that Mitchell came out with. We had twice the number of estimating guides to pack around, and we still had to flip through the pages to swipe the bar codes. I did not like that system, but they have greatly improved through the years. The systems today make it much easier to write auto repair estimates. I mean, who can’t point and click?
One advantage of computerized auto repair estimates is that there are no errors. An auto estimator can still leave a lot of money on the table by not adding not included operations, but computers have eliminated all of the calculation errors because it calculates the totals for us.
Have you ever lost something? It is pretty hard to misplace an estimate when it is stored in your computer as well. Therefore, computers are more accurate and remove much of human error out of the equation, but this does require more work by backing up and maintaining your computer system.
Most computer estimating systems update their information monthly or weekly. This is a huge benefit, considering how quickly part prices can change. When we used the estimating guides, they were sent out every three months, and they would already be out of date before you received your new copy.
The computer also eliminates a lot of writing. Remember that I said to list each item separately? With a computer system, you may only have to type a few of the operations that are not in the system and you can point and click most of your estimate with ease.
The Internet has also made it possible to work directly with insurance companies. Both the shop and the insurance company can look at the same estimate and view the digital photos online. This was the birth of the Direct Repair Program (DRP). There are mixed emotions about these programs. I am not going to get into that in this book, but I have a video on the resource site that will explain more about the DRP.
First of all, we call the estimating guide a guide for a reason. The labor times are not necessarily set in stone. If you feel the labor time or other issues with a procedure are not fair, you can dispute the operation.
There is a website for submitting your questions at www.DEGWeb.org. Many times technicians and/or estimators do not feel that the estimating guide or computerized system allows enough time to perform the operation, but they just take it as the gospel, as they do not know how to challenge their concern.
The Problem Will Only Be Corrected If They Know About It
If you truly feel that the guide is not giving you enough labor time, go to the above website and submit your concern, which has caused many changes to be made to the different estimating guides. Estimating software companies will never know there is a problem with their database if we do not let them know.
Think about it. There is a lot of information available when it comes to providing a database that has the labor operations for every vehicle out there. Mistakes will be made in the database, or things may have been overlooked.
The best thing is that if an adjustment is made, it will add the additional time or operation every time any estimator is generating an estimate performing the procedure. If it is changed in the database, insurance companies will pay it with no questions asked.
The bad thing is that there are still many things that are missing. For instance, there may be a make or model that does not have any refinish time when replacing a front rail. Every shop performing this procedure is losing revenue. It then becomes very important to observe the procedures, listen to the technicians, and submit your concerns to DEG. You’re helping the entire collision repair industry if you help make a correction.
For more information about DEG, please visit the resource section of this book.
A total loss is when the cost to repair the vehicle exceeds a percentage of the actual cash value (ACV).
There are two misconceptions concerning a totaled vehicle. The first is that a vehicle is beyond repair. The second is that the costs to repair the vehicle will exceed the value of the vehicle. While there could be some truth in both statements, neither is entirely correct.
Some accidents result in the vehicle being severely damaged and not able to be repaired. You may hear someone ask how bad an accident was and they reply, “It was totaled!” This answer, though, does not tell you much. The replacement of a few parts on an older vehicle not worth much money could total the vehicle. If the vehicle happened to be a 2014 Ford pickup crew cab, however, a lot of damage would be needed before the pickup would be considered totaled.
In most cases, a total loss does not mean the vehicle is beyond repair, but that the cost of the repairs is too high.
Repairs Exceed ACV
This is almost an accurate statement and may be true in some states, but in many states repairs do not have to exceed the ACV, only a percentage of it. For instance, an insurance company may use 70% of the ACV as their percentage, which means that when a vehicle’s damage reaches 70% of the ACV, they classify the vehicle as a total loss.
Actual Cash Value
When a vehicle is bought new, it starts depreciating. The value become less with time and mileage. The insurance adjuster will look at such resources as NADA, Kelly Blue Book, or other reports showing what cars are selling for at local dealerships to determine the value of the vehicle. Another source to help determine the ACV is to look in your local classifieds for the make and model and in similar condition as the totaled vehicle was before the accident.
Insurance companies issue the vehicle owner the amount of the agreed ACV and then sell the car at auction. The salvage value will vary depending on the value of the parts that can be sold.
What Percentage Totals A Vehicle
There is not one correct answer for this, as insurance companies or states may set different percentages, but 70% is a ballpark figure that I’ve heard many insurance companies use.