Advanced driver assistance systems calibrations produce an example of what economics terms a “credence good,” CIC Industry Relations Committee Co-Chairman Jonathan Chase observed Wednesday.
A credence good represents a black box to the consumer buying it. They can’t begin to see the fruits of the labor they’ve purchased.
A consumer doesn’t know what quality appears like in a credence good, the amount of it they need or what it should cost, Chase told the virtual Collision Industry Conference on Wednesday. It leaves a “feeling of unease” despite one’s need to purchase that service, he explained.
Chase indicated such factors contributed to the difficulties which can arise between insurers and repairers when an ADAS operation is involved. Uncertainty on if the operation is even required is yet another question, he explained.
Chase suggested seeking to other industries’ examples. Plumbers have struggled with the concept, which industry has had steps to document what work they’ve completed, he said. The collision and insurance industries have already overcome the credence-good issue of alignments with strategies like compiling suspension photos and alignment specifications, he said.
Insurers struggle with ADAS calibration because “the work’s invisible,” Chase said. Unlike other body work, where the answers are clear, “this you can’t see.”
Chase and others participating in the Industry Relations Committee session Wednesday were exploring the topic of trust on ADAS. A casual CIC audience poll found 92 percent of respondents agreeing that “Trust Issues exist in the Collision Repair procedure that ought to be addressed.” Another informal audience poll found 69 percent declaring “Gaining alignment with parties re: repair plans, necessary operations / mistrust in process” to be among the top issues related to ADAS.
According to a California repairer and fellow Industry Relations Committee speaker Wednesday, documentation helps smooth the entire process of ADAS calibration reimbursement.
Sam Zamir, manager of Collision Consultants, said he encountered a scenario where his shop completed a calibration and submitted a bill, only to discover the insurer distrustful that the operation occurred or was needed.
Zamir said documenting with photos and a printout can come in “really handy.”
He said he has repeatedly discovered that “good communication” and “good documentation” solve the problem. He advised participating in conversations by having an insurer and providing documentation before the work is even performed. Then achieve this again after the operation, “putting everybody at ease,” Zamir said: There’s justification for the work and proof it had been done right, he said.
Chase asked Zamir for an illustration of documentation which had been approved by an insurer.
Zamir cited Porsche, a make his shop frequently repairs. Calibration of Porsche blind spot monitoring yields a screen confirming the completion of this process, he said. A screenshot or printout of that screen for the file was probably one of the “most tangible” pieces of documentation possible — combined with the invoice the shop had sublet and paid for that calibration, Zamir said.
Photos work very well, Zamir said.
Zamir also discussed the issue of the repairer’s trust in the party performing the calibration — even if it was handled in-house. Documentation might be relevant because well, according to Zamir.
According to Zamir, possible questions for the provider included: Was the work being carried out properly? Was the floor level? Was an aftermarket tool used just like the OEM version?
He described how his shop had quit one dealership for calibrations. Collision Consultants noticed the dealer was returning calibrated vehicles with no reference to the gas tank, despite OEM repair procedures mandating it's full for your operation.
“They type of brushed it off” as unimportant, and Collision Consultants ceased sending them sublet calibration work, Zamir said.
Zamir said he's found it useful to document the process with photos. Proof may include a printout from a tool, he said. One could even document an annual Hunter inspection of the alignment machine, he proposed.
Tune set for the 2nd day of the virtual Collision Industry Conference on Thursday. The event is an industry summit available to a person with a stake in auto body work, including shops, insurers, OEMs, suppliers and others. It is a chance for all those sectors to teach each other and debate various issues arising in the market. There's also a wide open mic that you should say whatever's in your thoughts.
The virtual event running 11 a.m. to 3 p.m. ET Thursday will take place survive Zoom and become liberated to everyone using a promo code on the sponsors page here. Sign up for the event with that code here.
