How Are You Surviving the Slowdown?

by Burl Richards, ABAT President

Slowly, slowly, the work is trickling in slowly. Industry-wide, shops are complaining about a lack of business.

There just doesn’t seem to be enough cars to repair! During ABAT’s most recent Board meeting, this topic came up, and 90 percent of attendees agreed that they’re slower than usual. 

Now, of course, certain markets haven’t missed a beat due to weather events or an absence of competition in the area. A handful of shops are still plugging along at the same pace, possibly due to their business model; shops that service multiple dealerships may have an advantage in pulling in steady work. But for most of us, business is as slow as a snail climbin’ a slick log. 

I’ve owned shops for nearly three decades, and personally, I haven’t seen it this slow for many years. During the pandemic, we were pretty insulated here in East Texas – my sales only dropped by a few percentage points, and it seemed like shops in the big metropolitan areas took a much bigger hit than we did. After the COVID-19 panic subsided, a lot of us enjoyed a busier time than ever, but industry leaders predicted it wouldn’t last.

In fact, Mike Anderson (Collision Advice) issued a warning at the 2024 Texas Auto Body Trade Show that stuck with me. He indicated that there would be some tough times coming over the next couple years, and although I was slammed with more work than I could imagine at the time, his caution stuck with me…for good reason since within just a few months, shops in the area started slowing down. Eventually, my shops slowed down too. 

A lot of factors play into the current slowdown, but one of the biggest is probably related to inflation, which has affected everything from grocery prices to homes and new cars. Body shops are likely feeling the direct impact of increasing insurance premiums which have risen by over 50 percent since 2020. As a result, customers are less likely to file claims; Progressive’s claim count is 30 percent lower than normal right now, according to a pretty reliable source. To lower that, policyholders are carrying higher deductibles – it’s not uncommon to see a $2,000 deductible these days! More vehicle owners are also paying out of pocket to prevent their premiums from increasing even more, and that means that many minor repairs aren’t being sought. ADAS may also be causing fewer accidents, though I doubt we can blame it entirely. 

At the same time, certain markets are being saturated with MSOs building new facilities or buying existing ones, so there’s more shops for the work to be divided amongst. Shops that operate on a DRP model are experiencing difficulty in attempts to sign onto new programs since the insurers don’t have as many claims and want to feed their existing shops. All of these things seem to be adding up to slow us down.

The current state of the industry seems really weird to me. Of course, it could work like a faucet where the work suddenly starts flowing out at any time, but I suspect that Mike’s prediction will be right – that we’re going to be experiencing this difficulty for a while, and that’s worrisome for many reasons. Beyond the obvious profitability concerns, we’re seeing technicians leaving the industry because they don’t have enough work, and we can’t afford to lose qualified talent in this field. I can’t help but wonder what this slowdown is going to do to the market and to competition. Will shops begin undercutting everyone else to try to get more work? What will that do to our industry in the long-term? 

What’s your workload like? How are you staying busy? What are your concerns about the slowdown, if you’re experiencing it? I’d love to hear your thoughts and suggestions!

Want more? Check out the April 2025 issue of Texas Automotive!