Embracing Opportunity: Collision Shops Bring Calibrations In House

Published in New England Automotive Report – Thomas Greco Publishing

It’s no secret that the majority of new vehicles being sold today include ADAS.

In fact, around 95 percent of light duty vehicles manufactured in 2023 came equipped with automatic emergency braking, according to CCC Intelligent Solutions’ 2024 Q1 Crash Course Report (available at cccis.com/reports/crash-course-2024/q1) – and experts anticipate that number will continue rising as consumers increasingly rely on these types of safety systems. 

With cars being produced with a growing number of electronic components, it’s no wonder that the majority of repairs necessitate calibrations to maintain those components’ functionality following an accident, though the frequency of shops performing calibrations does not seem to be keeping pace with the influx of ADAS. CCC’s report indicated that just over a quarter of last year’s appraisals for 2023 model year vehicles included a calibration.

In response to this climbing demand, multiple ADAS calibration companies have popped up in recent years, yet some shop owners have chosen to take matters into their own hands, stepping up to the plate to address this concern by investing in the training, equipment and tools needed to perform these vital operations in-house. The primary drivers behind this decision? Convenience, liability concerns and profitability.

“We were subletting a lot of vehicles to various dealers and another collision shop,” shares Rick Starbard (Rick’s Auto Collision; Revere). “While the shop was always accommodating, sometimes dealers were booking weeks out. It became clear to us that we would be sending almost every car in the shop out for calibrations, so we decided to explore getting into the business ourselves.”

Shops performing calibrations in-house allows them to ensure procedures are being done correctly since the shop carries the liability, even when they sublet a portion of the job. “We wanted to make sure calibrations were done correctly,” offers Don Dowling (Marblehead Collision; Marblehead). 

Kevin Gallerani (Cape Auto Body & Service; Plymouth) agrees. “Originally, we sublet our calibrations to various dealerships. But as we learned more about the requirements of performing an accurate calibration – specifically as it relates to having a clean room – we realized that we were subletting the work to companies that did not have this type of set up. Most of them were calibrating vehicles in the middle of the shop, which had a pitched floor, improper lighting and toolboxes scattered all around, so it made us question whether the vehicles’ systems were truly being restored as intended by the OEMs. And if something went wrong with that vehicle, if those systems failed to perform properly after we returned it to the customer, we would be held liable because we handled the claim and the repair wasn’t done properly. The last thing this industry needs is for a driver to get hurt because someone performed a calibration they weren’t trained and equipped to do.”

Cape Auto Body started investing in training employees on ADAS repairs in 2017, and in 2019, the shop built a clean room to bring the majority of calibrations in-house. The process was somewhat daunting, Gallerani admits. “The floor had to be completely level, and we had to install special LED lights in a room that admits no sunlight, so it couldn’t have any windows. The walls had to be painted a flat gray color, and the room must stay clear of toolboxes and equipment that the radar could misinterpret as the target. Having clutter around the room is like buying an obstructed seat at Fenway Park; sure, you’re at the game, but you don’t really know what’s going on because you can’t see clearly, so you’re bound to miss something important.”

Conscientious of how much work would be involved to bring calibrations in-house, Starbard did his homework before making the leap. “We looked into it for quite some time. We spoke to just about every equipment manufacturer during SEMA ‘22 and asked them all if they had a system where we could perform alignments along with calibrations in one bay. Everyone said that it was impossible, including Autel, but a few months later, Autel announced their development of an in-ground alignment rack that could deliver what we were looking for. We spent some time with Gary Machiros at Applied Automotive Technology, who not only owned a calibration center but was also a distributor for Autel, as well as with the owner of a fairly large tire, suspension and calibration center in New Hampshire, who was happy and successful with their equipment for both alignments and calibrations. 

“After deciding to move forward, we went through the process of rearranging our mechanical shop by moving some lifts and a garage door opening and having the alignment rack installed in the floor so that it sits level with the floor when down,” Starbard continues. “This allows us the ability to perform calibrations on a level surface on the ground, but we can also perform alignments and/or repairs in the air. Because a properly aligned vehicle is the foundation for any calibration, it really makes sense to pull a car in, perform the alignment, scans and go right into calibrations. It also gives us the ability to do an alignment pre-check during vehicle check-in to help identify potential steering and suspension damage out of the gate. We also use multiple scan tools including some OE. When we need to have OE calibrations and programming, the system can be remoted with OE tools.”

Marblehead Collision dedicated a large bay to calibrations. “We have multiple ADAS systems: Launch, Autel and Snap-On. Launch is the main system we utilize,” Dowling explains. “I self-trained and had support from Launch while I was learning. I then trained our calibration experts.”

The process of invoicing to collect from bill payers can be challenging and requires additional considerations. Dowling established a separate business entity for his calibration business. “We were forced by insurers to open a separate company because they refused to pay the collision shop for these calibrations, but opening a separate company was not difficult. The calibration company rents a couple bays at our collision shop.”

Starbard also “set up a different company under a different corporation, and we operate the mechanical and calibration businesses in a separate part of our building. It is crazy that this is what has to be done to be fairly compensated.” 

Fortunately, shops seem to be encountering less pushback from insurers as these procedures become more widely accepted. 

“We have fought insurers for years with the need for calibrations, but at this point, they allow the required calibrations,” Dowling acknowledges. “However, we do need to provide a sublet invoice from the ADAS company since insurers tend to refuse to pay the collision shop a fair labor reimbursement rate.”

Gallerani agrees. “Every insurance company in Massachusetts, except one, seem to realize calibrations are a required safety procedure and pay the bill. When we have a claim from the one insurer that doesn’t pay, we educate the customer ahead of time, submit the invoice to the insurer and then bill the customer when the insurer denies it.”

“Most insurers are beginning to understand the reality of the many ADAS features in today’s vehicles and the manufacturer requirements following a repair,” Starbard suggests. “We don’t really run into a problem when we produce all of the documentation. As crazy as it sounds, things started to change once CCC added the Vehicle Diagnostics tab to their estimating system.”

Still, he worries, “While insurers seem to have a better understanding of ADAS, there are still many repair shops that do not. While we do perform a fair number of calibrations for other facilities, we typically only get those calls when there is a problem such as a warning lamp or something is clearly not functioning. If repairers are not planning to do calibrations themselves, they should at least be checking what the OEM requirements are following a repair and making sure that those requirements are carried out, even if there is no light on the dash.”

Shops properly performing calibrations in-house deserve – and need! – to be properly compensated due to the large investments needed to provide these services. 

The complexity of the process typically requires a dedicated resource. Cape Auto Body employs four ASE-certified ADAS technicians who underwent rigorous training and testing. “ASE requires technicians to be able to read electrical diagrams and know how they work before calibrating these programs,” Gallerani says. “You have to measure them to make sure they’re pointing in the right direction before you even place the target. Their tests are hard, and we’re really proud of our team for acing them.”

Starbard received training through Autel and performs some calibrations himself, but his son-in-law is the shop’s go-to guy for calibrations. “Shawn has been our in-the-shop appraiser for years, performing scans, writing cars and researching repair procedures for the techs in the shop while working from a mobile work station. He has always been more of a tech guy and really embraced the idea of performing calibrations. He has the patience to deep dive into the different systems when necessary. He did a lot of research on his own in addition to taking a multitude of I-CAR classes and spending quite a bit of time learning at our distributor’s shop.”

The employees performing ADAS calibrations spend a significant amount of time researching OEM repair procedures to ascertain the manufacturer’s specific requirements. 

“Manufacturer requirements should be followed for the calibration requirements,” Dowling insists. “The risks created by not doing the calibration could affect the functionality of the vehicle.”

“We need to find out how the OEMs want it done and follow those procedures because they made the car and know how it’s supposed to work,” Gallerani contributes. “Each OEM and each system has different requirements, and if you neglect to do the research, something important could easily be missed. There’s no cutting corners in this game; ADAS systems are safety devices that need to be repaired properly, or someone could be seriously injured.”

“Pulling OEM procedures has been one of the steps that we have followed for quite some time, even before doing calibrations,” Starbard adds. “Following repair procedures is a process. If you follow the processes as they are laid out and don’t allow yourself to become overwhelmed by them, calibrations are not so mysterious. If you think you can leave a step out or shortcut anything, you will become extremely frustrated because the calibration will fail. Similar to measuring equipment in the shop, the equipment is extremely delicate as are the cameras, sensors and modules that you are working with. 

“This is not a job for someone who lacks patience or is a bull in the china shop. I really think that computer-oriented people or ‘gamers’ may be ideally suited to perform many of these tasks. With the shortage of techs in the industry, I think that seeking out computer-oriented people for this role will become the trend,” he predicts.

Then, the dollars and cents required to purchase the tools and equipment need to be considered. Charges must reflect the cost of the equipment, the ongoing training/ upgrading of equipment and subscription costs associated with obtaining access to the repair information specific to the vehicle.  

“The equipment as well as software access is very expensive and vehicle specific,” Starbard points out. “We recently purchased one board just to perform front radar on newer Jeeps that cost $1,500. We also purchased target mats for performing surround view calibrations on Ford trucks that cost $2,500. We have some targets that we have never used, but if this is the road that someone is going to go down, you have to be equipped to do it. There is no telling how many times that you will use these targets and devices, which is something that must be added into your overall pricing. With the expense of equipment and training required to perform these procedures, the price for these services has to include the equipment and knowledge and should not be based on dollars times hours. 

“Another thing that must be considered is space,” he adds. “Many calibrations require a large amount of space to carry out, and it is not really conducive to doing in an active body shop environment. Anyone who is considering gearing up for calibrations should consult with the various equipment companies and find out exactly how much space will be required to perform the types of calibrations that you would like to perform and the make of vehicles that you typically repair.”

“We paid somewhere around $22,000 for a good target system several years ago, plus additional tools and equipment made the original startup costs around $30,000,” Gallerani calculates. “Then, we have to buy new targets and floor mats every year as we constantly add on manufacturers. At this point, we’re doing about 95 percent of our calibrations in-house.”

Dowling estimates that he has invested “roughly $70,000” into the equipment needed, but after the initial investment is paid off, “The cost for in-house calibrations is just the time you have into it. We perform roughly five calibrations per day.”

Although the initial cost may seem overwhelming, Dowling offers advice to shops that have not yet brought calibrations in-house: “All shops should invest in an ADAS calibration scanner. Even if you cannot do all the calibrations, start with the dynamic and radar calibrations. These have fairly low initial costs for the shop. Work your way up to doing the lane departure calibrations. These targets are costly, and calibrations typically require more space. If a third party can do calibrations at your shop, then the body shop certainly can.”

And there’s definitely money to be made for shops performing their own calibrations. AAA released a report in December 2023 indicating that ADAS can add up to 37.6 percent to the total repair cost, an increase of around $1,540. In Massachusetts, insurers reimburse at an average of between $44 and $45 per hour, which falls far short of the true cost of labor at my shop,” says Dowling, who estimates sales of nearly $30,000 per month. “By my calculations, I don’t even reach a breakeven point with my tech expense until almost $60 per hour – not taking into account associated costs from ‘non-production staff’ needed to facilitate the repair process, like appraisers or our administrative support team.”

“We have found it to be a worthwhile endeavor that has been helped by not only doing work for our shop, but we also do work for several shops in the area,” Starbard concurs.

Gallerani refers to it “as a good business decision. Any shop obviously wants to capture as much business on each repair as possible because that favorably affects our productivity and profitability, so why give part of the repair to someone else when we can get trained and do it ourselves? Calibrations is another income-generating opportunity for your shop, and it can certainly be a positive one if you go about it the right way.”

But doing it the right way is more important than earning a quick buck, Gallerani stresses, reiterating, “The goal of ADAS is safety, so calibrations need to be taken seriously and performed properly, or someone could get hurt…or worse. Shops can’t afford that liability, but I also like to sleep sound at night. Controlling the repair, rather than relying on an outside source that hopefully calibrated the systems correctly, gives me confidence that we’re doing the right thing for our customers and returning their vehicle in a safe condition so it will protect their families if they get in another accident.”