Do Lower Labor Rates Lead to More Repairs?

Mitchell Industry Trends Report Asks “Do Lower Labor Rates Lead to More Repairs?”

The feature article in this month’s Industry Trends Report from Mitchell International examines the relationship between labor rates and the number of operations on an estimate. The report details Mitchell’s data from the states with the lowest labor rates as well as the highest rates.

Greg Horn, vice president of industry relations, examined first-party collision estimates written in 2013 for all 50 states. The data included estimates written by independent appraisers, body shops and insurance company staff appraisers.

Horn’s analysis comes to three basic conclusions surrounding the issue:

  • Lower rates do not result in more operations on estimates
  • Lower rates do result in more panel repairs
  • Lower rates do not result in additional refinish hours

The complete report is available to read online or can be downloaded as an Adobe Acrobat file.

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