If you’re seeing your margins on collision repair work declining over the years, you’re not alone. That why I contend that the successful collision repair businesses moving forward will be those led by owners who recognize that trend — and take steps to respond.
Owners like Jason and Dee Mignogna are doing just that. This husband-wife team run The Collision Shoppe in Greensburg, Pennsylvania, 30 miles east of Pittsburgh, a business I’ve watched from its start about a decade ago. One of the keys to their success, I believe, is the Mignognas’ determination to capture more of the work that in the past they may have sublet out or allowed others in their market to do.
“My wife and I talk about what we still have to sublet,” Jason told me recently about their business philosophy. “Our new vision is that we’re going to keep everything in-house. We’re looking at revenue sources that we’ve been giving away.”
I think part of what has inspired that effort has been The Collision Shoppe’s success in making truck and fleet repairs a profitable addition to their business. That helped keep the business humming during the pandemic when there were fewer cars — but a lot more trucks — on the road.
“When other businesses closed, those trucks were still running,” Jason said. “That end of the business picked up and carried us.”
“We have a state trooper we talk to, who, in the early days of COVID-19, asked us how things were going,” Dee said. “He said he had not been called to a traffic accident in two weeks, and he was usually called to multiple — three or four — a day. We could tell him things had slowed down some, but we were okay.”
Jason acknowledges that truck work wasn’t really on his radar when he started the business. But his shop building had the 14-foot doors and other capabilities to work on larger vehicles. He had some connections at UPS, and inquired about their truck repairs and it took off from there.
“All it takes is for someone to see a wrecked truck sitting in your parking lot,” Jason said. “And then everybody starts saying, ‘Oh, you fix wrecked trucks?’”
Doing a mix of work within the same shop worked for a time, but as the shop’s volume of both truck and passenger vehicle repair grew, some obstacles became more clear. So Jason and Dee kept their initial location, with its visibility on a high-traffic road, but leased another space in which to handle the truck repair work.
Working out of two buildings also has its challenges, so they decided after three or four years that it was time to bring that work back to their main location — in a 6,000-square-foot addition to the shop.
“The whole addition was geared toward truck work, with high ceilings and an open platform,” Jason said. “We do fix some cars on that side, but most of it is truck work.”
Truck work now accounts for about 20 percent of The Collision Shoppe’s business, the Mignognas told me. In addition to helping them through the worst of the driving slump last year, they see a number of advantages to it. Though trucks are not far behind passenger vehicles in terms of technology, Jason said, they tend to be simpler and more similar to one another than cars. There’s less haggling over “three-tenths of an hour of labor and an aftermarket parts that’s available in Texas for $3 less,” he said.
“On the fleet side, a lot of them self-insure,” Jason said. “So we’re not waiting for approvals, and your turn-around time is better. They care less about what it costs than getting it fixed and moving forward.”
Even when there is an insurer involved, the fleets often handle that portion of the process — no doubt with more prowess and leverage than a typical consumer who has only one or two cars covered by an insurer. That alone has to be a breath of fresh air for anyone working in this tough industry.
There’s some challenges with truck and fleet work, and I’ll share what Jason and Dee told me about those in my next column. And also share what else they’ve done to keep more collision repair dollars in-house.