Well, that was awkward. 

Of course, I’m talking about the GEICO and Astech partnership and setting prices. While pearl-clutching is an appropriate response, no one should be surprised by this. Now that the details of this agreement are out in the open don’t be surprised when other carriers follow suit. This has been coming for a while. 

The automotive industry has been undergoing a seismic shift driven by the rapid advancement of ADAS for years now. While these technologies promise increased safety and convenience for drivers, they also present unique challenges for collision repair shops. As systems become more advanced, the service requirement curve steepens. The increased need for equipment and technical knowledge will also steepen. The price for these services will steepen as well.  The recent partnership between GEICO and AsTech, aimed at standardizing ADAS scan and calibration, is not a surprising attempt at a solution; it is just a very bad one. 

The Stakes Are High

First, let’s get the obvious out of the way. The primary concern is insurers' increasing control over the repair process. By dictating which vendors and procedures are covered, insurers limit a shop's autonomy and put downward pressure on prices. This can squeeze profit margins and make it difficult for shops to compete and maintain profitability when properly completing ADAS operations. It would be disingenuous, however, to pretend this is new; we’ve had the same arguments over parts and glass for years. Astech is not the first company to set every other consideration aside for a national insurance agreement. They’re just the first in our industry to do it from a leadership standpoint as a servicer of some of the most complex safety systems available today. Et tu, Brute?

We’re No Longer Talking About Junkyard Fenders

The impact of these developments extends beyond ARX shops and Astech users. When cost control is prioritized over proper repairs, it leads to a decline in the overall quality of ADAS calibrations, compromising vehicle safety and increasing liability risks. The ADAS service requirements can vary wildly between makes and models. This means determining proper calibrations based on the actual scope of repair takes time and thought that a fifteen-dollar pre-scan can not capture. 

Proper calibration is more than following steps 1-5 of the procedure page and hoping the lights turn green. If it were, everyone would do it. Providing the correct set-up space to perform calibrations with a level floor and adequate lighting, the tools and software necessary to do each repair properly, and having a professional technician operating everything can not be covered in a simple, set-price environment. There is no one-size-fits-all solution to ADAS service, and forcing one ensures that the customer pays the price for missed and improperly completed operations. 

The Customer Is The Victim. Again.

The laws of supply and demand are always at work. Proper ADAS service is in high demand with high barriers to entry. Artificial price controls will slash the supply of vendors willing to supply the market with ADAS service done correctly. Participating in the slashed pricing and providing any semblance of proper work would be impossible. Every job would be a losing proposition. What is always left in a price-controlled market is the substandard product. Value pricing gives you the value brand every time. 

Every time a cost-saving measure is forced on the market, the customer is the one who gets punished. 

A Path Forward for Body Shops

So, as a shop, you must find ways to navigate the current climate around ADAS service. How do you do that and protect your customers? Dropping vendors that punish you for being loyal is a good first step. But that alone is not enough. As repairers, we have to be involved in our industry. Here are a few ideas for moving forward within your location.

• Embracing technology doesn’t mean investing massively and doing it all yourself. Find and partner with quality sublet vendors who demonstrate a desire and ability to do the job right. 
• Advocate for fair reimbursement rates for ADAS services based on the procedures' complexity, equipment, and training cost. Learning to document the procedure and everything that’s involved is critical to making your case. 
• Collaborating with industry partners is critical. Join forces with other repairers, industry associations, and technology providers to advocate for fair and transparent practices in the ADAS space.
• Education is key. Help car owners understand the importance of ADAS calibrations and the potential consequences of improper repairs. This can empower them to make informed decisions and discuss their repair situation with insurers. Remember, it is the customer that has the contract with the insurer. 

The future of collision repair is inextricably linked to ADAS. By proactively addressing ADAS's challenges and opportunities, body shops can survive and thrive in this evolving landscape.

Are you concerned about the impact of the GEICO-AsTech partnership on your business? We understand your concerns and have solutions to help. Contact us to learn more about how 1Source ADAS can empower your shop and protect your bottom line. Continue the conversation with us at https://www.1sourceadas.com/schedule-a-demo, or feel free to reach out to me directly at kirk@1sourceadas.com