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IGA Open Letter Regarding NAGS May 2014 Benchmark Pricing

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  • IGA Open Letter Regarding NAGS May 2014 Benchmark Pricing

  • #2
    Does anyone remember these now infamous quotes from the IGA 2008 conference?

    “We’re constantly adjusting information,” Oliver said. “Anyone who wants to send their cost data is welcome to do that.”

    "Faced with many questions about discounting from insurance carriers, Patterson noted that when NAGS develops its benchmarks, a profit margin is included."

    “We don’t take that profit margin away,” Patterson said. “The market does.”
    Best Regards,


    • #3
      NAGS Announces Benchmark Pricing For 1999

      Perhaps this article that is 16 years old will amuse some of you.

      The original story can be found by CLICKING HERE.
      1998 -

      NAGS Announces Benchmark Pricing For 1999

      January 1, 1999 the Auto Glass pricing based on NAGS starts a revision. Touting it's new "Benchmark Pricing", NAGS has re-evaluated it's published prices, drastically reducing the list prices in order to get "closer to existing competitive prices". The auto glass industry has long been plagued by 'deep' discounts off of artificially high list prices.

      At the same time, NAGS has revamped the labor hour time, in order to be more in line with it's parent company Mitchell's Collision Estimating Guides. The average NAGS hours have been reduced approximately 20%, but are supposed to represent a more accurate time in real hours.

      According to NAGS, the new prices have resulted in an average drop in windshield list price of 68% (from $1223 to $392); and tempered parts have been reduced an average of 53% (from $672 to $358).
      To get an idea of how the list price change will affect discounts, shops will have to evaluate price structures from their suppliers and their selling market. As there is not a price increase coupled with the 'revaluation', the approximate formulas (see chart below) to get your new 'adjusted' multipliers are as follows. For windshields, take the "multiplier" x 3.2, and for tempered, take the "multiplier" x 1.96 . In theory, by applying your new "adjusted multipliers" to the new list prices, will get you the same net prices as using your "old" multiplier on the 'pre-benchmark' list prices.

      This is an average, and NAGS will be including a suggested "conversion chart" in their New Benchmark Calculator.

      Formulas to Figure New Discounts On Benchmark Pricing (aprox.)

      (80% off) Mult. of .20 x 3.2 = Mult. of .64 (36% off)
      (70% off) Mult. of .30 x 3.2 = Mult. of .96 ( 4% off)
      (65% off) Mult. of .35 x 1.96 = Mult. of .69 (31% off)
      (55% off) Mult. of .45 x 1.96 = Mult. of .88 (12% off)

      Official NAGS Statement on Benchmark Pricing:

      Benchmark Pricing Information

      Along with our customers, NAGS has recognized the need for realistic pricing and labor times. The traditional methods NAGS uses to establish the NAGS List Prices™ have resulted in escalating benchmark pricing and ever increasing discounts. We at NAGS are responding with a REVALUATION of our benchmark pricing along with adjustments in the NAGS Labor Times™.

      Effective with the FALL 1998 Calculator publication, NAGS will inaugurate new benchmark pricing based on a complete and comprehensive analysis of all available manufacturers’ pricing sources. The purpose of this change is to provide a NAGS Benchmark Price that is closer to existing competitive prices. We at NAGS believe our new benchmark will more closely predict realistic, fair aftermarket glass dealer prices. As with any pricing guide, the subscriber is the final judge of value.

      Along with this change in the benchmark pricing, NAGS will also align all labor times to the Mitchell Collision Estimating Guide, factoring in appropriate cleanup times as indicated by the Mitchell labor time studies.

      In order for these changes to work effectively in resolving the pricing issues facing this industry, certain changes in the industry pricing practices will be required. These include:

      ◾Reduction of the NAGS Benchmark Price

      ◾Realistic hourly labor rates

      ◾Fair pricing for additional materials used in installation

      ◾Re-negotiation of trading partner agreements
      Last edited by Gary Hart; 05-06-2014, 08:07 AM.
      Best Regards,


      • #4
        Originally posted by Gary Hart View Post
        Does anyone remember these now infamous quotes from the IGA 2008 conference?

        “We’re constantly adjusting information,” Oliver said. “Anyone who wants to send their cost data is welcome to do that.”

        "Faced with many questions about discounting from insurance carriers, Patterson noted that when NAGS develops its benchmarks, a profit margin is included."

        “We don’t take that profit margin away,” Patterson said. “The market does.”
        "~~Anyone who wants to send their cost data is welcome to do that"

        That is true I was a NAGS contributor for many years.


        • #5
          the legislators and enforcement officials such as Attorneys General and Insurance commissioners seem to have forgotten the rights of independent repair facilities and the laws that address fair competition.

          Steering is when an insurance company herds the consumer to favored repair facilities. This is bad because of other conflicts of interest. Corporate profits versus policyholder interests now comes into play. Also involved is the sometimes adversarial tendency when getting a claim satisfied. Usually, “favored” means the repair facility has signed a pricing agreement with the insurance company. Last, but not least, policyholders are concerned that their policy may be canceled, premium will increase or their claim will be denied and they may have to spend time in court to get a fair resolution. A subtle form of coercion is now in play.

          So when an insurance company or their TPA says that a shop is not “favored”, the policyholder feels they are being told not to use their chosen shop. The question is, does the insurance company have the best interest of the policyholder in mind or the best interest of their stockholders? Repair facilities do not have to sign pricing agreements with insurance companies, but do so only to get on the list of “favored” vendors. Most of the small independent repair facilities do not get to negotiate prices. The insurance company makes their offer and the shop either accepts it or is bad mouthed by the insurance company when a policyholder chooses a shop that has not “signed on the dotted line.”

          When it comes to auto glass repair or replacement, the insurance company never invokes their right to contract for the repair seemingly leaving it up to the policyholder and consumer choice. But when the consumer has been bombarded with radio and tv commercials all day long mentioning Safelite this and Safelite that and then ending the ad with a sing song jingle, “Safelite repair, Safelite replace”, calls to their insurance company to report a simple rock chip repair claim, are met with an automated attendant which ascertains that it is a “glass only” claim and the call is rerouted to Safelite!

          Most insurance companies require the Safelite CSR to notify their policyholders right away that the call is being answered by “Safelite” Solutions which has been contracted by their insurance company to administer glass claims and that “Safelite” Solutions is financially affiliated with “Safelite” Auto Glass, Inc. which only further establishes the “Safelite” brand and suggests to the policyholder that they need to use Safelite to do their glass work. In actuality, it is a disclaimer made by the insurance company knowing that they are putting their policyholders in an uncomfortable position especially if the policyholder wants to use an independent shop or doesn't want to use Safelite due to a previous bad experience. If the first call to the insurance company is made from an independent repair facility, it is forced to deal with Safelite, a direct competitor, during the claim process. If that isn't a violation of the fair trade laws, what is?

          To make matters worse, Safelite CSR's are scripted to advise policyholders that have chosen a repair shop outside of the “approved network”, to use words like, “while you may choose any shop that you wish to provide service to your vehicle, the one you have chosen is not on our list of approved shops that agree to your company’s pricing and you may be responsible for out of pocket expenses and you should also verify what warranty, if any, your shop offers. Do you still want to use that shop?” If that isn't bad mouthing I don't know what is! Even Safelite in its court case testimony suggests that it is aggressive and caddish to do so!
          Sometimes the Safelite CSR will even try to steal the customer by offering to schedule the job with one of their technicians at the policyholders home or place of business. If the independent shop owner isn't listening in on an extension, sometimes the customer will tell the shop owner never mind (thinking they are required to use Safelite) and walk right out the front door!

          That is a clear example of how one company is allowed to run rough shod over its competitor. Other examples include, denying requests to join the network with a form letter with no other stated reason than Safelite (which controls the network) feels that there is already enough representation in that particular region (Barrier to entry?). In other words, Safelite doesn't want the extra competition. There is absolutely no justification for that kind of abuse of power! Other examples include Safelite telling the customer that they cannot find that particular shop on their list. Another example, is when the Safelite CSR invokes the right to inspect the damage. This is usually done when the customer is already at their chosen shop but the inspection is a delaying tactic that gives Safelite a chance to actually go out and do the inspection and then steal the job. Early this spring, after a particularly bad snow storm in the Northeast, there was a thread on an internet auto glass forum suggesting (NOT CONFIRMED) that policyholders were scheduled up to four weeks out just so Safelite could keep all the business instead of suggesting other independent shops. For the independents in the auto glass business it is a constant battle.

          to be continued