Alone or Together: Where the Industry Stands, New Jersey Automotive’s 2024 Survey Results

by Jacquelyn Bauman

The world has changed for everyone significantly over the past five years alone, but how has it changed for automotive repairers in New Jersey? Are we all still feeling the crushing weight of insurer interference? Has anyone’s labor rate gone up? Is anyone else struggling to hire new employees? What is the shop down the street doing to make their business more successful?

Being a shop owner in these uncertain times can be scary and lonely, as these questions and more weigh heavily on our minds. To try and alleviate some of these concerns, New Jersey Automotive has once again set out to get a finger on the pulse of the industry and bring you the answers you need to feel less alone. We hope that this information provides you with relevant insight to make better decisions for your business and shine some light on what’s going on behind all of our bay doors. 

What describes your primary business?

Collision Repair: 86%

Collision & Mechanical Repair: 12%

Mechanical Repair: 2%

Collision shops: Are you a DRP? 

Yes, 1-5 programs: 54%

Yes, 6-10 programs: 15%

Yes, more than 10 programs: 2%

No: 29%

Over the last few years, we have seen the percentage of survey respondents who are not a part of any DRP programs slowly increase as Garden State repairers see less and less value in partnering with an industry that willingly puts them on the chopping block. 

If you are not a DRP shop, is steering more or less of a problem than in the past?

Steering is MORE of a problem than in the past: 67%

Steering has remained about the same: 24%

Steering is LESS of a problem than in the past: 9%

In 2023, only half of NJA repairers who took our survey thought that steering was MORE of a problem than they had experienced in the past, with 40 percent of readers believing that the impact of steering had generally stayed about the same to their previous experience. This year, over two thirds of collision repairers in New Jersey are feeling the impact of steering more than ever before.

How many employees do you have, including yourself?

1-5: 28%

6-10: 33%

11-20: 23%

More than 20: 16%

What is the age of your OLDEST employee?

30-40: 2%

41-50: 7%

Over 50: 91%

What is the age of your YOUNGEST employee?

18-25: 70%

26-35: 18%

Over 35: 12%

Getting new blood into the industry has been a challenge for shop owners for well over the past two decades. Society’s shift away from the importance of learning a trade has made hiring new technicians a struggle for shop owners over the past few years. It seems, however, that there may be a light on the horizon. In 2023, our survey revealed that the youngest employee for over one fifth of our readers was older than 35 – a scary fact considering, at that time, 98 percent of readers also said their oldest employee was over the age of 50. This year, the majority of our readers now have employees under the age of 35, with 70 percent reporting their youngest employee is between 18-25. We hope to see these trends continue, as the future of this industry depends on it!

Do you have any involvement with local vocational/trade schools? 

Yes: 35%

No: 49%

No, but I’d like to: 16%

This upward trend of young people getting involved in the automotive repair industry can be directly tied to our survey takers’ response to this question, as over one-third indicated they have some involvement with their local vocational or trade schools. 

NJA readers indicated that they partner with their local schools in a variety of ways, from sitting on an advisory board for the school to providing expert advice to students to certifying equipment and providing internships and part-time work to students.

“We employ part time students in the auto body program at Bergen Tech Paramus,” explained one survey respondent from a North Jersey shop. “It feels good to know we’re helping provide the training for the talent that will be the future of our industry.”

How many employees have you hired in the past year?

None: 23%

1: 33%

2-4: 35%

5 or more: 9%

What has been your biggest challenge in attracting and retaining employees?

Even though we’re seeing new talent starting their careers in shops around the Garden State, finding and retaining employees is still a significant challenge for our readers. Just as in 2023, 58 percent of our survey respondents noted that finding qualified talent for their shops is nearly impossible.

“The skills just aren’t there,” explained one Burlington shop owner. “We have to take the time and invest in them by training them, but we don’t have the capacity to do so.”

For a lot of shop owners, finding a qualified employee is hard when they aren’t even getting an applicant pool from which to choose. 

“The biggest challenge is that even when we were looking, nobody applies,” shared a shop owner from Avon. “The younger generation does not want to work at a body shop. With rates as low as they are, as an owner, I just can’t run my shop and pay people what they are truly worth.”

“Compensation from third-party bill payers does not allow shops to attract talent compared to other industries,” another repairer from Livingston agreed.

When a qualified and willing employee does finally make it through the shop door, many owners are finding that they can’t keep up with the many demands of the modern workforce.

“We can’t afford to offer them the kind of health coverage and 401(k) that they’re looking for,” lamented a Newark-based repairer. “That, on top of all of the sick time, personal time, vacation time…you name it.”

What has been the most effective method for attracting new employees? 

For NJA survey takers who have been successful in hiring new employees in 2024, 19 percent have found that the most effective method for recruitment has been simply word of mouth.

“We rely on referrals from current employees,” shared a South Orange shop owner. “We take care of our current employees so they’re happy and are willing to tell others to come work for us.”

One shop owner in Augusta revealed that they have found the success of hiring new employees lies in what you’re able to offer them.

“For us, we offer a competitive pay scale,” he revealed. “That and offering benefits certainly helps.”

Others in the industry haven’t been quite so lucky, with one Ocean Township-based reader sharing that they “haven’t succeeded yet.”

What do you do in your business to promote a positive work culture? 

Although some shops have been successful in bringing in new employees, the ever-present struggle to find new talent weighs heavy on the minds of many Garden State repairers, meaning employee retention is more important than ever. So, how are shop owners cultivating an environment that makes their staff want to stick around? For many of our readers, building a good relationship is the foundation to promoting a positive work culture.

“We focus on a teamwork environment,” an East Orange survey respondent reported. “We do monthly catered lunches where we all break bread together, and I offer social outings twice a year where we all go out for a nice dinner.”

“We post all the customer feedback to the office, so the shop employees can see it,” one Roselle shop owner added. “We celebrate employee birthdays and invite staff and their families to events like Cars and Coffee, car shows and trunk-or-treat.”

In addition to crafting a warm, family-oriented environment, some New Jersey repairers are working to maintain a lower-stress setting to promote a positive work culture.

“I try to allow everyone to operate autonomously with very little micro-management or interference,” shared a Montclair repairer. “Our guys know if there is anything or any tool they want to better their job performance or the shop, just ask and we can order it.”

“We try to keep the pressure and stress low,” echoed a Mt. Holly-based reader. “We offer flex time, training and open lines of communication.”

What employee benefits do you offer your staff? 

Health insurance: 70%

401(k): 47%

PTO: 12%

No benefits: 28%

With the age of employees on the rise, it is no shock that a majority of shops prioritize health insurance and retirement benefits to their staff as an incentive to get them to stick around. Some shop owners are even going above and beyond to help lighten the load and provide perks for their staff, with some survey respondents indicating that they provide insurance deductible reimbursement, phones, bonuses, paid lunches, paid training, flexible hours and even profit sharing!

While many survey respondents are doing everything in their power to retain their employees through these benefits, there are still 28 percent who do not provide any benefits to staff – not because they don’t want to, but because they simply can’t afford it.

“The expense is something we just can’t absorb,” revealed a shop owner from North Jersey. “We can’t afford to provide benefits with the current prevailing rate.”

What do you think is the most pressing issue affecting shops today? 

Unless today is your first day in the automotive repair industry, it should be no surprise to anyone reading this article that the overwhelming majority of readers found the most pressing issue affecting shops is insurer control and insufficient labor rates. 

“Insurer involvement makes working in this industry almost impossible,” lamented a Paterson shop owner. “Between steering, denial for required repairs and downward pressure on reimbursements, it’s a miracle any of us are able to get anything done at all.”

“Insurance companies act like it’s the wild west,” another survey respondent from South Jersey sympathized. “They operate outside of the rules.”

In addition to the pressure of operating underneath insurer control and manipulation, 39 percent of our readers shared that their most pressing issue is the lack of qualified technicians entering the workforce.

“We won’t have a future in this industry if we don’t start getting qualified technicians in soon,” one Central Jersey shop owner confessed. “Unless something changes, I just don’t see how any of us will survive.”

How would you define the “future” of collision repair?

While there isn’t a crystal ball in the world that could reveal the future of the automotive repair industry, one thing is for certain – unless things change, with the current state of things, repairers in the Garden State aren’t too optimistic.

“Mom-and-pop shops won’t be a thing anymore,” predicted one repairer from Woodland Park. “Large MSOs will take control, and any owner that tries to compete will lose their shirts.”

“Consolidation will be the norm,” echoed a North Jersey shop owner. “Small, old school, non-certified shops will largely disappear within a few years.”

Consolidation isn’t the only fear for the future of the industry – NJA readers also see the rise of technology as a growing challenge for shop owners in the years to come.

“The vehicles on the road are already growing more complicated,” explained a Green Brook repairer. “It’s going to get harder and harder to repair these new vehicles with all their AI. I believe that there will always be a need for collision repair, but it’s becoming more difficult due to all of the lane departure and self-stopping features.”

Although the bulk of our survey respondents shared their concerns about the future of automotive repair, a few of our readers had a more positive outlook on the road ahead.

“There will obviously be challenges,” one West Orange shop owner shared. “But despite the challenges, I see a lot of opportunities out there. It will be tough, but I’m optimistic.”

How is your shop preparing for this future?

Whether their view of the future is bright or bleak, New Jersey shop owners are preparing for tomorrow however they can.

Training and obtaining OEM certifications were noted as priorities by over half of our survey respondents as their best defense against whatever is to come. 

“We’re focusing on maintaining and growing our OEM certifications,” shared a North Jersey shop owner. “If we’re known for our high-quality repairs, we have more of a leg up in providing customer education, which helps us push back against insurers and get paid what we’re worth.”

“We’re training our staff on technical skills, but also their soft skills,” another shop owner from Paterson concurred. “But we aren’t just training our staff. We spend time educating insurance staff whenever possible, too.”

In addition to training, New Jersey shop owners are also making an effort to address their workforce issues by investing in employee retention as much as possible. 

“Trying to retain our employees and our management is a challenging task,” explained a Piscataway-based repairer. “It’s tough, but it’s necessary for the future of our business.”

How would you rate your current state of business?

Despite being affected heavily by insurance control, a substandard labor rate, a dwindling workforce and more, NJA survey respondents in 2024 rated their current state of business higher than we’ve seen since 2021. In the last three years of this survey, Garden State shop owners hadn’t rated their current state of business over 6.7 on average. In 2024, that number has shockingly gone up to 7.3 – with 100 percent of readers rating their current state of business at a 5 or higher!

How does your shop handle ADAS calibrations?

Repair In-House: 39%

Sublet to dealership: 13%

Sublet to ADAS calibration center: 48%

If you calibrate ADAS in-house, who performs the calibrations?

Shop owner: 4%

Repair planner: 0%

Dedicated calibration tech(s): 44%

Whoever is handling that repair job: 4%

Sublet vendor: 48%

What are you doing to combat rising P&M costs?

With inflation running rampant over the past few years, the cost of everything around us has gotten out of control. In response, New Jersey shop owners are dealing with rising P&M costs however they can, with 48 percent of survey respondents noting that they use some paint and refinish calculator and 22 percent indicating that they’re passing the cost along to the consumer.

“We’ve raised our rates to reflect the increases,” shared a Belleville repairer. “There was just no way around it. We were eating the additional cost, but the lack of proper reimbursement was killing us.”

For those shops that haven’t raised their rates, many of them are using the paint and refinish calculators and other tactics to push back on insurers for proper reimbursement – to varying degrees of success.

“We’re pushing back hard on paint supplier increases,” a Maplewood shop owner said. “They actually caved on the last one. And we’re sending insurers information to help justify any rate increases.”

“We’re buying in bulk quantity,” a Central Jersey repairer explained. “We keep hammering insurers to face reality.”

Some repairers are using the same tactics but aren’t getting quite as far with insurers as their neighboring shops.

“We’re using the Mitchell Refinish calculator, but we’re getting a lot of pushback,” complained a Linden shop owner. “Not all insurers will pay.”

In your experience, which insurer is most difficult to deal with, and why?

Although almost every insurer you can imagine popped up in at least one survey respondent’s answer to this question (with quite a few of you stating that ‘all of the insurance companies’ are the hardest to deal with), for the past eight years of this survey, there have been three notorious culprits who have risen to the top of the list – Allstate, State Farm and Progressive.

What makes these insurers so hard to deal with? According to our readers, the reasons range from ignorant adjusters to lack of communication to inflexibility in paying for what needs to be done to properly repair a vehicle.

“Without a doubt, Allstate is the worst insurer out there,” a Newark shop owner shared. “There is no information on any of their estimates as to who is the adjuster or what is their phone number or how to contact them. They have outsourced many of their procedures out of the country, which makes dealing with them even more difficult. It’s hard having someone who has never repaired a car tell you how to fix it.”

“Neither State Farm nor Progressive have a Right to Appraisal in their policies,” explained a Camden repairer. “It makes it impossible to get anything done right. Because they have such inexperienced writers, it’s a constant battle on what is repairable and what needs to be replaced.”

One Verona shop owner has a theory that the more marketing to the public an insurance company does, the harder it will be to work with them.

“Any of the insurers you see on the TV are going to be garbage,” he revealed. “They put the money into marketing instead of doing things right. The staff and the adjusters hide behind their ‘higher authority’ and leave no room for discussion. It’s a ‘take it or leave it’ negotiation.”

In your opinion, how have insurer-shop relations worsened over the past year?

Dealing with insurance companies’ bad behavior has been a persistent issue for the automotive repair industry for longer than any of us can remember, but as times have changed, so have the challenges around this dynamic. With the introduction of technology and the shift to doing business for the lowest cost available, insurer-shop relationships have become even harder to navigate. 

“Insurers just have a complete and total disregard for proper repairs,” remarked one North Jersey survey respondent. “There’s no negotiation at all. The insurer’s goal is only to steer to direct repair shops so they can control how the job is done.”

For many of our readers, insurance companies’ lack of care for safe and proper repairs was the biggest way insurer-shop relations have worsened over the past year. 

“The insurance companies feel they can allow or disallow a repair process at the drop of a dime,” a Bloomfield shop owner continued. “They don’t care how it affects their customers. They don’t care about their customers or safe and proper repairs.”

While insurance companies refusing to allow what is necessary to properly repair a vehicle has been a persistent issue in the industry for decades, many of our readers believe recent advances in technology have only worsened insurance companies’ conduct.

“I think the age of instant access, remote computing and smart phones has reduced the need for any relationship between the insurer and the shop,” one Montclair shop owner informed. “In the carrier’s mind, they think the process is now ‘go take pictures, write an estimate, and then delay, deny and defend.’”

A Newton repairer shared these sentiments.

“None of the insurance companies deem it necessary to send out adjusters anymore,” he revealed. “They just have the customers take pictures, send them in and hope they take the check and cash it. There are a lot of unsafe vehicles on the road due to this practice. Then they have these unqualified insurance company employees reviewing these pictures and writing poor estimates. It is a battle to get the insurance company to send out an actual adjuster, which is very frustrating.”

How are you incorporating Artificial Intelligence (AI) into your business?

It’s all over the news these days – AI is beginning to crop up in every industry, and although the reviews about its impact are mixed, it seems inevitable that we will see more automated intelligence in every aspect of our lives in the near future. Although 60 percent of our survey respondents have indicated that AI isn’t something you’ll find in their toolboxes just yet, a few New Jersey shop owners are dabbling in this new technology.

A little under 10 percent of survey respondents who are using AI are trying out CCC’s new initial estimate functions.

“We’ve been using CCC for generating estimates for total losses,” one Camden shop owner commented. “It’s been helping some with tow-ins. It’s been good seeing how it can take some steps away from our staff.”

For others, they’re keeping AI away from the repair process but have found it helpful in other aspects of running their businesses. Thirteen percent of those who took our survey and are currently using AI are playing around with its communication abilities.

“We’re only using it for correspondence at this time, whether it’s email drafts and replies or for marketing,” a North Jersey repairer explained. “ It allows me to focus my time where it needs to be – on shop operations.”

What are your biggest concerns about AI?

With the rise of AI slowly becoming a reality, it’s hard not to call to mind the many movies and TV shows that have used the possibility of AI as a means of nightmare-fuel. From 2001: A Space Odyssey to I, Robot to Blade Runner to The Terminator to Westworld and so many more, media over the past few decades has warned against the potential negative impact of AI. What do New Jersey repairers think AI will impact the most in their businesses? Unsurprisingly, many of our readers’ concerns are centered around how this technology will be used by insurers to further their bad practices.

“Virtual estimates are already bad enough as it is; I don’t want to have to talk to AI to get any answers,” a South Jersey shop owner lamented. “I want to talk to an actual person on the other end.”

“I can’t see any other outcome except it being used against us,” a Piscataway repairer seconded. “The data will only benefit the insurers, and they’ll use it to nickel and dime all estimate line items. It’s going to be horrible.”

One thing all of our readers agreed on is that AI is only in the infancy stage, and there will be many more changes on the horizon. What those changes will be and how we will need to adjust – we can only speculate.

In your opinion, has the increase in consolidation been helpful or harmful to the industry?

Helpful: 26%

Harmful: 74%

There’s the old adage, “there’s strength in numbers,” but the question for many New Jersey shop owners is: does consolidation provide strength to the shops or to the insurers? Although some of our survey respondents were optimistic about the possibilities that consolidation could provide, the vast majority don’t have quite as sunny an outlook.

“It’s going to be harder for independent shops to compete, profit-wise,” a South Jersey repairer predicted. “Given the consolidators’ buying power and discounts they receive, we won’t be able to keep up.”

“My hope would be that the consolidators would eventually push to raise the labor rates, but I’m doubtful that will ever happen,” a North Jersey shop owner noted. “In the short term, though, we have gotten more claims when a local shop was bought by a big MSO and then lost all their staff.” 

A Bedminster-based reader shared these sentiments.

“They will lower the industry standards worse than what they already are,” he explained. “It will just be a numbers game, catering to the insurers. We already know they only care about the bottom line. It’s just going to get worse.”

In the past year, have you taken legal action against a third party on behalf of your shop or your customer?

Yes: 22%

No: 78%

What is your current labor rate?

$50-$60 per hour: 17%

$61-$70 per hour: 35%

$71-$80 per hour: 35%

$81-$90 per hour: 4%

More than $90 per hour: 9%

In last year’s survey results, we were happy to report that New Jersey shops were beginning to charge closer to what they are worth for their labor. Just three years ago, almost 70 percent of survey respondents reported that their labor rate was between $50-$60 per hour. In the following years, that number has steadily decreased, and we are pleased to share that now less than one fifth of NJA readers have a labor rate lower than $60. While there is still a long way to go in getting paid what we deserve, we are finally seeing some improvement in Garden State labor rates.

What do you think your labor rate should be?

Less than $90 per hour: 9%

$91-$100 per hour: 35%

$101-$120 per hour: 43%

More than $120 per hour: 13%

What is your current storage rate?

$50-$60 per day: 13%

$61-$70 per day: 9%

$71-$80 per day: 4%

$81-$90 per day: 13%

More than $90 per day: 61%

How do you educate your current and potential customers?

A prevailing cause of many of the issues repairers encounter with insurance companies comes down to the fact that customers are ignorant of the repair process and what their rights are. New Jersey shop owners are fighting a constant battle to provide this education and improve circumstances for their customers and their businesses.

“We interview our clients prior to agreeing to enter into a repair contract,” one North Jersey shop owner reported. “We reference New Jersey regulations, industry articles and more. We make sure the customers are well informed before we even get started.”

“We explain the issues we are facing with their insurance company and how they might be responsible for a portion of the repair,” an East Orange-based reader also shared. “We try to compare it to how medical insurance operates so they get the idea.”

A South Jersey survey respondent echoed these tactics. 

“We try to arm them with all the information we can,” he explained. “We inform them as well as we can about third-party tactics to be on the lookout for, what OEM procedures are and why they’re important, what safety inspections are required by their car’s manufacturers that the carrier is not willing to compensate, diminished value, etc.”

With how much time shop owners are spending educating customers, it’s a wonder anyone gets any repairs done at all!

What type of training do you feel your shop needs more of?

Although 26 percent of our survey respondents either didn’t feel they needed more training or weren’t sure what kind to seek out, almost three-fourths of respondents recognized that there is still plenty of room for improvement. OEM repair requirements were noted as an important area for training for 17 percent of our readers, with aluminum repair and electrical diagnostics coming in just behind with 13 percent each. In addition to technical skills, quite a few survey takers indicated that they could use training in “soft skills’”such as leadership, organization and communication.

If you could change anything about this industry, what would it be?

If you’ve made it to the end of this article, if you’ve read any trade publications over the past few years, if you have spent more than a week in this industry, you already know that there are more problems facing automotive repairers than could ever be listed in one lifetime. For NJA readers who responded to our survey, the things they would change in the industry touched on almost every issue we face today.

“I would reduce the friction between insurers and shops,” a Trenton-based repairer shared. “I would make the insurers responsible to follow the regulation by adding the ability to sue or penalize them for their actions.”

“A stronger adherence to the rules and regulations by the third-party bill payers,” a Montclair shop owner put on his wish list. “Also, a stronger presence of oversight (DOBI) with material penalties to ensure adherence of the rules.”

For 17 percent of our readers, holding the insurance companies accountable isn’t enough. These readers indicated that the thing they’d change about the industry would be to follow Massachusetts’ lead in discouraging shops from participating in referral programs and work toward bringing an end to DRPs in New Jersey. 

“There should be no association by any shop with any insurance company agreeing to any favoritism or special deals because you give them discounts/favors,” a North Jersey reader proposed. “Special pricing is – and always has been – the killer of this industry.”

Of course, the abysmal labor rates were prevalent in many of our survey takers’ answers as well, with 22 percent of shops noting the need for change in this area. Whatever your largest gripe is with the industry, one thing is for certain – things absolutely have to change.

Conclusion:

The tune may change, but the song remains the same. New Jersey repairers are still dealing with many of the old struggles (insurer malfeasance, poor labor rates and lack of new talent) while now also juggling many new challenges (increased cost of doing business and AI, to name a few). We hope that the results of this survey have provided you with new perspectives and insights into how your neighbors are handling these challenges and will help you feel more united as an industry. Thank you again to everyone who provided their feedback to NJA’s 2024 survey, and we look forward to positive changes on the road ahead! 

Want more? Check out the December 2024 issue of New Jersey Automotive!