Several years ago in Australia, the government approached the country’s collision repair industry with concerns about making the estimating process more transparent. (Down Under, They call it the “Smash Repair Industry” by the way.) The Australian Productivity commission has been pushing the auto body repair industry to create a more realistic approach to labor times which match an hour of labor time to an hour or actual work. In the United States the labor unit method allows for labor to be padded and is not based on real actual hours.

A major auto repair trade association in conjunction with a large Australian insurance carrier helped develop a new method to determine real actual labor times. The new program is called NTAR ( New Times and Rates ) and started late 2007.  Collision repairers, insurance staff and trade associations meet and review and adjust labor times and issues on a regular basis. 

The methodology in creating the new “real hours” was based on the following.

1. Completing time studies on every repair operation would be too time consuming and would not be effective.

2. Actual times would be defined for major operations at first. The key operations would be defined and then smaller operations as time goes on, all the way down to removing a bolt.

3. Once major operations are identified then the “actual time” to complete them can be defined.  This would include the ancillary operations involved as well. 

The results according to articles and research conducted, indicates that with this new method of using “actual” hours, the labor rate per hour to collision repair shops will have to go up to compensate for the new changes. The benefit though would be that labor times on U.S. estimates would go down considerably.  In tests in Australia, with adjusted labor rates and the “actual” hours method utilized, The bottom line repair totals did not vary with any significance. 

For more information on how they are moving to this process in Australia, Click Here.