Study Reveals Efficiency Gains in Collision Repair With Collision Repair Scan Tools
The automotive collision repair sector stands at the intersection of technological advancement and operational complexity. In this dynamic landscape, the role of diagnostic solutions has become increasingly pivotal to the profitability and even viability of the modern collision repair shop. This paper explores the dynamics revealed in a recent Collision Industry study that examined how the right diagnostic solutions can help shops minimize issues related to the insurance reimbursement process, reducing disputes and delays, while augmenting their current shop capabilities to mitigate the impact of technician shortages and more efficiently service the modern increasingly complex vehicle.
Opus IVS presented an online survey to over 3,000 collision repair shop professionals during January 2024 that sheds light on the transformative potential of diagnostic solutions in addressing significant challenges encountered by OEM dealership affiliated/owned, MSO franchise, MSO corporate owned, and independent collision repair shops. While collision repair professionals strive to deliver high-quality repairs efficiently, our research found that they continue to face formidable obstacles such as insurance reimbursement issues and the persistent shortage of skilled technicians. Notably, the study found that an average of 33% of all repair orders (ROs) experience problems with insurance reimbursement, and over 70% of shops are short one or more technicians. The study also highlights that selecting the right diagnostic scanning partner can mitigate these challenges, potentially reducing the time to recruit capable technicians and the overall technician shortage at a shop by up to 40%. Choosing the right solution for diagnostic vehicle scanning has been found to deliver a reduction of up to a third in insurance reimbursement issues experienced by a shop.An average of 33% of all repair orders (ROs) experience problems with insurance reimbursement, and over 70% of shops are short one or more technicians.
Introduction
Vehicle collision repairs have undergone several remarkable shifts over the past decade, primarily driven by technological advancements– in an environment impacted by consolidation that enables higher efficiencies in order to compete. Against this backdrop, the strategic adoption of diagnostic solutions has emerged as a crucial factor in today’s sustainability and success of shops. However, not all diagnostic solutions are created equal in terms of mitigating these challenges, while propelling shops toward enhanced efficiency and profitability.
Historically, collision repair shops have grappled with insurance reimbursement problems, which stem from discrepancies in assessing repair costs, delays in processing claims, and disputes over coverage. Today, our study found that 33% of repair orders (ROs) on average encounter problems with insurance reimbursement, manifesting in various forms, including delays, disputes, and underpayment. This issue has its roots in the complexity of modern vehicles and the difficulty in accurately diagnosing and documenting damages and the repairs to correct vehicle damage. As vehicles continue to become more technologically advanced, accurately assessing repair needs has become increasingly challenging, exacerbating insurance reimbursement challenges. To address these issues, collision repair shops initially relied on manual methods and subjective assessments in the late 1990s and early 2000s 1 when diagnostic solutions for the collision shop were still in their infancy stage, leading to inconsistencies and disputes in reimbursement claims.
Additionally, with technician shortages being impacted by factors such as an aging workforce, insufficient training programs, a growing number of other technical workforce options, and evolving skill requirements, these shops have struggled to attract and retain technicians with the advanced skillsets required today. This results in outcomes detrimental to the business from staffing deficiencies and increased repair times. Over 70% of shops were without one or more technicians in 2023, which has not only strained shop resources, but also compromised the quality and timeliness of repairs, impacting customer satisfaction. What’s worse, it damages a shop’s overall reputation within its community, leading to lost business in the future.
In response to these challenges, the advent of diagnostic solutions specific to the collision shop has led to more complete documentation for the insurance reimbursement processes and helping to navigate the technician shortage. These solutions empower collision repair shops with advanced scanning tools and software, enabling them to conduct comprehensive vehicle diagnostics, generate detailed reports on repair requirements, offer remote support services to bridge the gap in technical expertise, and improve overall efficiency, all while integrated with the shop’s repair order management system such as CCC.
Data Shows Diagnostic Solutions Help Reduce Insurance Reimbursement Claims Issues
Selecting the appropriate multi-brand scanning solution capable of diagnosing issues across multiple vehicle makes and models can reduce insurance reimbursement issues by up to one-third (33%).
Insurance reimbursement issues have long been a major hurdle for collision repair shops, impacting their financial health and operational efficiency, as nearly 90% of collision repair revenue today comes from insurance-paid work2. With Opus IVS finding that 33% of repair orders (ROs) encountering problems with insurance reimbursement, as indicated earlier, this means a collision repair shop is affected by operational hurdles, such as increased workload and potential customer dissatisfaction stemming from these challenges.
The evolution of vehicle design, incorporating sophisticated ADAS features, further complicates the insurance reimbursement process which leads to discrepancies in repair estimates and delays in claim processing. Moreover, insurance providers often employ their own assessment methods and criteria, leading to disagreements and disputes over coverage and reimbursement amounts. This lack of alignment between collision repair shops and insurance companies results in prolonged negotiations, delays in repair approvals, and, in some cases, underpayment for services rendered.
The research also highlights a considerable variation in the prevalence of diagnostic solutions in mitigating insurance reimbursement issues, with multi-brand solutions offering a compelling alternative to OEM scanning where appropriate for the repair.
The study from Opus IVS indicates that selecting the appropriate multi-brand scanning solution capable of diagnosing issues across multiple vehicle makes and models can reduce insurance reimbursement issues by up to one-third (33%), demonstrating the tangible benefits of strategic diagnostic solution adoption.
Some multi-brand diagnostic solutions have evolved to match the performance of OEM scanning in resolving insurance reimbursement challenges, leveraging advanced diagnostic capabilities and comprehensive vehicle coverage to provide accurate and reliable results, thereby empowering collision repair shops to streamline the reimbursement process and minimize disruptions.
The difference in resolving insurance reimbursement claims issues depending upon the diagnostic solution utilized in the shop, as found by Opus IVS, shows how the landscape of multi-brand scanning solutions exhibits high variance, with differences in performance, functionality, and support offerings. Not all solutions are created equal, and the choice of diagnostic partner can alter the effectiveness of insurance reimbursement efforts.
Overall, the strategic adoption of diagnostic solutions has greatly improved the efficiency and effectiveness of insurance reimbursement in collision repair. By addressing the complexities of modern vehicles and enhancing communication between stakeholders, diagnostic solutions have transformed the reimbursement process, reducing disputes, delays, and underpayments, and ultimately enhancing the financial health and operational efficiency of collision repair shops.
The Impact of Diagnostic Solutions on Navigating Technician Shortages
Selecting the right scanning partner can expedite technician recruitment processes and reduce overall shortages by up to 40%.
Over the past few years, technician shortages have been a persistent challenge in the collision repair sector, impacting shops’ abilities to deliver timely and high-quality repairs. As vehicles have become increasingly complex and technology-driven, the demand for highly skilled technicians continues to outpace the supply3.
Even more so, demographic shifts and changing workforce dynamics have further compounded technician shortages. An aging workforce and a lack of succession planning has resulted in a dwindling pool of experienced technicians, while younger generations show less interest in pursuing careers in skilled trades like collision repair. According to a 2022 Collision Engineering Program (CEP) study, only 17% respondents were “very familiar” with collision repair or engineering4. Additionally, as projections for demand continue to increase despite this drop in technician supply, the expectation is that the U.S. will need over four times more automotive technicians than will graduate in the next five years.
The research of Opus IVS revealed that over 70% of collision repair shops today are facing a shortage of one or more technicians. Staffing deficiencies not only lead to increased repair times and customer dissatisfaction but also strain shop resources and profitability. In response to these challenges, diagnostic solutions emerge as a strategic tool, coupled with remote services to offer a promising avenue for addressing the technician shortage problem.
By leveraging advanced diagnostic capabilities and remote expertise, collision repair shops have witnessed a notable decrease in technician shortage, as they benefit from access to OEM Dealer Master Technicians who provide expert guidance and support.
Furthermore, the choice of diagnostic and remote partners emerges as a critical factor in addressing the technician shortage. 
Selecting the right scanning partner can expedite technician recruitment processes and reduce overall shortages by up to 40%. Partnering with a trusted diagnostic solution provider allows collision repair shops to access the resources and expertise needed to attract and retain skilled technicians, thereby ensuring long-term success and sustainability.
With this data in mind, diagnostic solutions are empowering collision repair shops to overcome staffing deficiencies and improve operational efficiency in an ever-evolving industry landscape.
In summary, diagnostic solutions represent a cornerstone of success for collision repair shops navigating the complexities of the modern automotive landscape. From addressing insurance reimbursement challenges to mitigating the technician shortage, these solutions empower collision repair professionals to deliver high-quality repairs efficiently and effectively.
Nonetheless, the efficacy of diagnostic solutions hinges on strategic decision-making and partnership selection. Collision repair shops must carefully evaluate their options and choose a diagnostic solution provider that aligns with their unique needs and objectives. By leveraging the insights presented in this white paper, collision repair professionals can unlock the full potential of diagnostic solutions.
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