Who would have thought that fewer auto accidents would have a downside?
Fewer auto accidents and increasing repair costs are proving to be a double whammy for collision-repair shops in across the nation.
Despite a 53 percent increase in vehicles on U.S. streets since 1980, the number brought in for collision repairs nationwide has declined.
In 2004, the most recent year for industry figures, 17 million cars and trucks were repaired. In 1980, according to industry estimates, 18 million to 19 million were fixed.
Although most streets and highways don’t feel safer today than they did 10 or 20 years ago, they are statistically safer in some ways. The percentage of vehicles involved in accidents each year has dropped from 20 percent in 1980 to 16 percent in 2004, according to industry figures.
The decline is mostly attributable to equipment such as high-mount third brake lights and anti-skid braking systems on cars, as well as stricter enforcement of driving-while-intoxicated laws and better-designed roads, said Bruce W. Cooley, director of marketing at Sherwin-Williams Automotive Finishes Inc.
And sophisticated "accident-avoidance" equipment is being added to new cars each year.
"I tell shop owners that it isn’t likely that the business will go away," Cooley said. "But what I’ve tried to tell them is trends in the industry don’t suggest that things will get better, and in fact, things will probably get worse."
While there has been a decline in the percentage of people involved in accidents annually, the number of vehicles totaled in accidents has increased dramatically, as has the number of people who choose not to fix their cars after an accident, he said.
Safety equipment such as airbags has substantially increased the cost to repair cars after an accident, officials said. Consequently, the annual number of total-loss vehicles has increased from 4 percent of the vehicle population in 1980 to 20 percent in 2004.
As insurance premiums rise, drivers are increasing the amount of their deductibles. After some accidents, they just don’t get their cars fixed, Cooley said.
"It used to be that people had a $100 deductible, so if they got a dent or a ding, they could afford to fix it," said Bill Davis, owner of First Class Auto Body in Great Falls. "Now, people have a higher deductible to keep premiums affordable. Of the people in an accident where the car still functions, 70 percent just take the insurance check and put it in the bank."
This all adds up to less work for body shops. In fact, Cooley said, the number of body shops has declined from about 100,000 nationwide when he began his career in 1969 to about 40,000 today — and that’s probably still too many, he said.
"I think the industry really has room for about 25,000 shops," Cooley said.
Less repair work means smaller shops need to add services to stay afloat. Davis, who has always sold horse trailers, started selling used cars and recreational vehicles last fall.
"That part of the business is doing pretty well," he said. "You have to diversify in this business or close your doors."