‘Best states for shops’ impacted by age of vehicles, percentage of uninsured drivers
Portland, Ore.—Are some states better than others for collision repairers?
There are any number of ways to rank any state in relation to others in terms of where collision repairers have it best. But here are four factors that likely have some impact on the body shops in each state, offering some measure of how the collision repair may be faring state by state.
Average age of vehicles
Although an older vehicle population in a state may be a boon for the mechanical repair industry, those are the vehicles most likely to be declared a total loss when they arrive in a body shop. An AudaExplore study found that vehicles 10 years old or newer account for more than 85 percent of collision-damaged vehicles that are repaired rather than totaled.
IHS Automotive reports that the average vehicle age in the U.S. is about 11.6 years of age. But on a state-by-state basis, that average ranges from a low of 9.6 years in Massachusetts to a high of 15.4 years in Montana. Other states with an older vehicle population include Idaho (14.4 years), Oregon (13.7 years), Washington (13.6 years), Wyoming (13.6 years) and Alaska (13.5 years).
Along with Massachusetts, the states with vehicle populations averaging under 10 years are Vermont, Oklahoma and New Hampshire.
Looking at just the states where Parts & People is read, the best states for collision repairers in terms of average vehicle age are New Mexico (10.1 years), Illinois (10.7 years) and California (11.1 years).
Percentage of insured drivers
A consumer is more likely to get a vehicle repaired after an accident if it — or the driver responsible for the damage — is insured. So higher rates of uninsured drivers in a state could make doing business in that state somewhat less attractive for collision repairers.
The Insurance Research Council estimates that about one in eight drivers on the roads in the U.S. is uninsured. But, again, the rates vary widely by state. Only 4.5 percent of Maine drivers are uninsured, according to the council’s report, compared to a whopping 26.7 percent in Florida.
Among the states with uninsured driver rates topping 15 percent are New Mexico (20.8 percent), Washington (17.4 percent), Indiana (16.7 percent), Alaska (15.4 percent) and California (15.2 percent).
The best states for collision repairers — those with uninsured rates below 9 percent) — include Iowa (8.7 percent), Idaho (8.2 percent), Wyoming (7.8 percent), South Dakota (7.7 percent), Kansas (7.2 percent) and Nebraska (6.8 percent).
Number of registered vehicles
The more vehicles there are in a state— particularly in denser, urban locations where those vehicles are more likely to “meet up” with one another — the better that state likely is for collision repairers. But ranking states purely on vehicle count doesn’t take into account the wide variations in state populations as well.
To look at which states seem to offer a potentially better market for shops, it may be more useful to compare the registered vehicle count in each state to the number of collision repair employees in each state. How many people are working in the industry is one indication of that state’s “repair capacity.” A state with lots of repair capacity — many people trying to earn a living through collision repair – but low vehicle count could indicate the state has a glut of repairers. Conversely, states with a higher number of vehicles for each collision repair employee are those in which shops may well be doing better.
States with seemingly a lot of competition for collision repair work (based on employee-to-vehicle ratios) include Illinois, California and Missouri, all of which have under 1,000 registered vehicles per collision repair employee.
Using this measurement, shops may be faring better in Kentucky, Idaho and Wyoming, which are among the states with more than 1,640 registered vehicles per collision repair employee.
CRASH Network and Collision Advice track the backlog of work shops report on a quarterly basis. A strong backlog of work is obviously an indication of a good market for collision repairers. Using this factor for comparison, shops in the Pacific Northwest and Mountain regions reported the largest backlogs last fall. Shops in Oregon, Washington and Idaho were, on average, scheduling work out about 2.2 weeks, while those in Montana, Wyoming, Colorado and Utah reported backlogs averaging 2.6 weeks.
At the other end of the spectrum, shops in Oklahoma, Texas and New Mexico averaged backlogs of just over one week. California, Nevada and Arizona shops reported backlogs averaging 1.3 weeks.
Combining those four factors into a single score for each state offers another way to rank states in terms of which ones may be better or worse for collision repairers.
By that measure, California shops may have it the toughest. Only six states have fewer registered vehicles per collision repair employee in the state, and only 10 states have a higher percentage of uninsured drivers, which may account for the low backlog of work reported by shops there.
Conversely, shops in Wyoming may be among the best off. The state’s vehicle population is among the oldest, but its uninsured motorist population is low, and only two states have more registered vehicles per shop employee. Shops there are among those with the highest backlogs of work in the country.
Iowa, Idaho, Kansas and South Dakota also appear to be among the top 10 states in which to be a collision repairer by these measures. A higher percentage of drivers there are insured, offsetting the older age of vehicles (particularly in the Midwest), and shops there tend to report higher backlogs of work.
Colorado, Nebraska and Kentucky also are in the top half of the state rankings. All have an older vehicle population (12.6 years in Colorado, 12.7 years in Kentucky, 13.3 years in Nebraska). But that’s offset by other factors, such as Nebraska’s low uninsured rate and a strong backload of work (1.9 weeks).
States in the bottom 20 by these measures include Indiana, New Mexico, Missouri, Illinois, Oregon and Washington. Indiana, for example, in addition to a relatively high uninsured driver rate, has the 12th oldest vehicle population (averaging 12.2. years, just one-tenth of a year younger than Missouri’s), and 33 states have a higher vehicle-to-employee ratio.