Calculating Car Workshop Labour Efficiency

The clock is ticking

‘Time is money’ in bodyshops and service workshops. Essentially, these operations buy and sell the time of panel beaters, painters and technicians. A service workshop, for example, might buy one hour from a technician for £10 and sell it to a customer for £40, and make a profit of £30. (These figures are, of course, notional).

Buying and selling the time of productives is, or should be, the major source of revenue and profit in bodyshops and service workshops. Profits from the sale of spare parts; oils and lubricants; paint and materials; and sublet and sundry are all subsidiary to the buying and selling of productives’ time. If you don’t sell time, you don’t sell any of these other things.

Just as you would take great care when buying and selling a spare part, you have to pay equal attention to buying and selling productives’ time – or even more so, because you cannot ‘stock’ productives’ time. In other words, if you don’t sell their time today, you cannot sell it tomorrow.

Time for sale

So once time is gone it’s gone, whereas a spare part will still be in stock. So it is a good idea to know how much time you have for sale. This would seem pretty simple. If you have six productives, and they are there eight hours every day, surely you have 48 hours for sale? Well, no, you don’t.

For a start, productives might be in the workshop for eight hours every day, but they don’t work on paying jobs for eight solid hours. For example, a customer could come back with a car that you serviced yesterday and complain that it keeps stalling. It will then be necessary for a productive to rectify the problem, and of course you cannot charge the customer for that. If it takes two hours, then you only have 46 hours left to sell, in our example.

Time sold

To complicate things further, you can actually end up selling more than 48 hours. Imagine, for instance, that a vehicle manufacturer’s standard time for a major service is two hours and you quote the customer on this basis. If your technician completes the service in one hour (unlikely, we know) then you will still charge the customer for two hours.

If this happened all day long, you could sell 96 hours less the four hours you could have sold if one of your technicians hadn’t spent two hours spent rectifying the engine stalling problem. (It’s four hours because you are selling two hours for every hour worked in this example.) So if your productives could halve the standard times all day, that’s 92 hours sold rather than 48 hours.

Three measures of time

What we are talking about here is the three kinds of time available in a bodyshop or service workshop:

Attended time – this is the time that panel beaters, painters or technicians are in the workplace available to work.

Work time – this is the time they spend actually working on jobs that, at the end of the day, a customer pays for. Clearly ‘work time’ does not include any time spent rectifying problems, or anything else they do that does not have a paying customer at the end.

Sold time – this is the time that you charge customers for. It could be the time quoted on an estimate for an insurance company, or a menu-priced service.

You could say that ‘attended time’ and ‘work time’ are both ‘real’, because you can almost see them. You can see when a productive is in the workshop, and you can see a productive working on paying jobs. What’s more, you can measure ‘attended time’ and ‘work time’ using a clock.

On the other hand, ‘sold time’ is not ‘real’. You can’t see it, and you can’t measure it using a clock. But at the end of every day you can add up all the time you have sold to customers from your job cards or invoices.

How fast and how long

If you measure attended time and work time, and add up sold time at the end of the day, you can then see how fast and how long your productives have worked during the day.

How fast they have worked is sold hours divided by work hours. In our example, that’s 92 hours sold compared to 46 hours worked, or 200% expressed as a percentage. That is, your productives are working twice as fast as the standard time.

How long they have worked is work hours divided by attended hours. In our example that’s 46 hours compared to 48 hours, or 95.8% expressed as a percentage. That is, your productives were working on paying jobs for 95.8% of the time.

Labour efficiency

What we have just worked out as percentages are two ‘labour efficiencies’:

Productive efficiency tells you how fast productives are working compared to standard times, or the estimate in the case of a body repair job – how many sold hours they produced compared to the work time it took them to produce these sold hours.

Labour utilisation (sometimes called ‘selling efficiency’) tells you how long productives worked on paying jobs compared to the time they attended the workplace.

As formulae, productive efficiency and labour utilisation are calculated like this:

Productive efficiency = (Sold Hours/ Work Hours) x 100%

Labour utilisation = (Work Hours/Attended Hours) x 100%

Overall labour efficiency

There is one other measure of labour efficiency and that’s called overall efficiency. This is a simple combination of productive efficiency and labour utilisation, and comes from multiplying them together:

Overall Efficiency = Productive Efficiency x Labour Utilisation

Or, another way of looking at overall efficiency is as sold hours divided by attended hours:

Overall efficiency = (Sold Hours/Attended Hours) x 100%

How labour efficiency affects profit

Obviously you will make more profit if you can squeeze more sold hours from the hours your productives attend. We have already said that if you buy one hour from a service workshop technician for £10 and sell it to a customer for £40 you will make a profit of £30. But if you bought one hour from the technician and then sold two hours, you will make much more profit – £70.

It is equally obvious that if you buy one hour from a service workshop technician for £10, and then the whole hour is expended rectifying a come-back job for which you can make no charge, you have lost £10. Less obvious is that you have lost the opportunity to sell two hours (in our example), and thus lost the opportunity to make a profit of £70.

So the reason for measuring time in a workshop, and then calculating the labour efficiencies, is very clear. It’s all about profit. And if you don’t measure time and calculate the labour efficiencies, it is absolutely certain you will not maximise profitability because you will not know:

How fast your productives are working as a team and individually, and whether they could work faster if they were better trained or had better equipment

How long your productives are working as a team and individually, and how much time they are wasting on work that customers aren’t paying for.

How time is measured

The most basic way of measuring time in a workshop is by using a ‘clock’ which stamps time on a ‘clock card’ for attended time and on the job card for work time. The times are then correlated manually on a ‘daily operating control’ sheet, and the labour efficiencies calculated.

However, computers have largely superseded this basic method, with the ‘clocking’ carried out using barcodes or magnetic swipe cards. The computer then completes all the correlations and calculations instantly.

Typical labour efficiencies for the Top 25%

In recent years, the labour efficiencies achieved by bodyshops and service workshops have fallen from what would have been considered the ‘norm’ a decade ago. The reasons for this are complex. However the top 25% of franchised dealer bodyshops and service workshops are still achieving reasonable levels of performance, typically:

For a bodyshop, productive efficiency averages 106%, utilisation 88% and therefore overall efficiency is 93.3% (106% x 88%)

For a service workshop, productive efficiency averages 115%, utilisation 92% and therefore overall efficiency is 105.8% (115% x 92%)

For 40-hour attended by a productive in a week, these translate as:

For a bodyshop – 40 hours attended, 35.2 hours working on paying jobs, and 37.3 hours sold or invoiced to customers

For a service workshop – 40 hours attended, 36.8 hours working on paying jobs, and 42.3 hours sold or invoiced to customers.

Why service workshops are usually more labour-efficient than bodyshops

bodyshops are clearly less efficient, but why? Firstly, jobs move between productives in a bodyshop – starting with strip, then panel, then preparation, paint, refit and valeting. Usually this means moving the vehicle physically around the bodyshop, which is far less efficient than the straight in a bay, job done and straight out situation of a service workshop. The result for bodyshops is a lower labour utilisation than for a service workshop.

Productive efficiency in bodyshops used to be higher than for service workshops, because sold hours were negotiated with insurance assessors – so-called ‘opinion times’. A bodyshop might get 20 hours for a job and the productives would finish it in 15 work hours, achieving a productive efficiency of 133%. Nowadays, the times in a bodyshop are set by computerised estimating systems with virtually no room for negotiation or ‘opinion times’.

service workshops, like bodyshops, have seen standard times fall, too. But their customer base is millions of motorists rather than a dozen insurance companies, so service managers can set whatever times they want – within reason, and of course, subject to competition.

Lost time

Obviously it would be great if you could get away with just paying technicians when they are working on paying jobs, but you can’t. What you actually pay them for is attendance, or ‘attended time’, and they don’t ‘work’ on paying jobs all the time they are attending.

The difference between attended time and work time is ‘lost time’, which is also called non-productive time – the few hours every week that technicians are paid for when they are not working on paying jobs. Three common things that make up lost time are rectification of faulty work (‘come-backs’), collection and delivery of cars, and cleaning and maintenance.

In addition to paying for lost time, you might pay bonus and overtime, and you pay for technicians’ holidays, sick leave and training. Then there is the employer’s contribution to National Insurance, and the cost of any perks technicians receive such as pension or health insurance contributions.

It’s tempting to throw all of these payments into the cost of buying the technician’s time in our example and calculate what you might see as the ‘real’ profit. If you did, the cost of buying the hour would probably be around £13, and therefore the profit falls to £27.

Accounting for time

The facts presented so far would seem to make calculating the profit when buying and selling technicians’ time quite simple. Apparently all you have to do for any period – a day, a week, a month or a year – is add up all your labour sales and subtract all your technicians’ costs (including basic, bonus, overtime, holidays, sick, training, perks and National Insurance) to arrive at your profit on labour.

You can, but it is far better to identify all your technicians’ costs separately in your management accounts, because you can then see how much you are paying them for not working. And by separating these payments to technicians, you can look more closely at the effects of labour efficiency on your operation, whether it is mechanical servicing and repair or body repairs.

The following example shows the traditional format for the management accounts of a service workshop or bodyshop. Here we have taken the results for one technician over 12 months, assuming basic pay of £12 per hour and hours sold out at an average of £60 per hour. Additionally, we have assumed that the technician attends 44 weeks per annum and 40 hours per week, working 37 of those hours with lost time of 3 hours. As a result of the technician’s efforts, the workshop sells 42 hours per week (or 1,848 sold hours per annum from 44 weeks x 42 hours), and this is achieved without any overtime or bonus pay.

Management accounts

Labour sales 1,848 hours sold @ £60 = £110,880

Less Technician’s pay for 1,628 work hours @ £12 = £19,536

Technician’s bonus pay (all bonus pay entered if earned) = NIL

Technician’s overtime pay (all overtime entered if earned) = NIL

Gross profit on labour sales (Labour gross profit) = £91,344

Direct expenses

Technician’s pay for 132 hours of lost time @ £12 = £1,584

Technician’s pay for hols, sick & training (40 days of 8 hours) @ £12 = £3,840

Technician’s National Insurance and perks = £3,744

Direct profit on labour sales = £82,176

Labour gross profit

In this traditional form of management accounts, then, the cost of the technician is divided up into no less than six lines. The first three lines appear straight after labour sales, and consist of all pay made to the technician for actually producing work that is then sold to a customer. This includes pay for ‘work time’, and all bonus and overtime pay. Accountants call these the ‘cost of sales’.

By subtracting these three lines from sales, you end up with the gross profit made from buying and selling the technician’s time – usually called the ‘labour gross profit’. The labour gross profit is often expressed as a percentage of labour sales, which in this example comes to 82% (£91,344 divided by £110,880 expressed as a percentage).

The remaining three lines appear in the direct expenses section of management accounts along with the cost of non-productive salaries, apprentices, consumables, courtesy cars, advertising, etc. The idea, as we have said, is to identify what you pay technicians for not working. In this example, the total cost of the technician is £28,704 per annum, and £9,168 is for not working. That is nearly one-third, and a far from unusual proportion!

Dividing up the technician’s pay

The way some of the technician’s pay is divided up is self-evident – bonus, overtime, holidays etc, and National Insurance and perks. That just leaves the technician’s basic pay, which is divided up according to ‘work time’ and ‘lost time’:

In our example we know the technician attends 40 hours each week and works 37 of these hours, which means that the technician works for 1,628 hours in a year (37 hours x 44 weeks), which at £12 per hour is £19,536.

That leaves three hours of lost time each week, or 132 hours per annum (3 hours x 44 weeks), or £1,584 at £12 per hour.

In fact, this split corresponds to one of the measures of efficiency we discussed earlier – labour utilisation. Labour utilisation is ‘work hours’ divided by ‘attended hours’ expressed as a percentage, or 92.5% in this case (37 hours divided by 40 hours). The split in the management accounts allocates 92.5% of basic pay as the cost of doing the work. The remainder (7.5% of basic pay) – corresponding to the technician’s pay for lost time – is allocated as an expense.

It should now be clear that labour utilisation has a direct bearing on how much gross profit is effectively produced from selling the technician’s time, and what is paid to the technician for not working.

Calculating labour sales

In our example, the workshop sells 42 hours per week as a result of the 37 hours the technician actually works out of the 40 hours attended. We have already seen that the labour utilisation here is 92.5% (37 hours divided by 40 hours). The productive efficiency can also be calculated as 113.5% (42 sold hours divided by 37 work hours), and the overall efficiency is 105% (42 sold hours divided by 40 attended hours). All these formulae were covered earlier.

The labour sales in our example are calculated by multiplying the sold hours in a year (1,848 hours) by the labour rate of £60 per hour. In full, this calculation is as follows:

Annual labour sales = 1 technician x 40 attended hours per week x 44 weeks attended per year x 105% overall efficiency x £60 per hour labour rate = £110,880

Increased productive efficiency

Now we can have a look at what happens to the profit on labour sales if labour efficiency increases. Let’s say our technician still works 37 hours out of 40 hours attended, but works faster (i.e. is more productive) and achieves 43 sold hours. The utilisation is still 92.5% (37 work hours divided by 40 attended hours), but the productive efficiency has increased to 116.2% (43 sold hours divided by 37 work hours) and the overall efficiency has also increased to 107.5% (43 sold hours divided by 40 attended hours). The effect is as follows (and we have assumed again that bonus and overtime are ‘nil’):

Labour sales

1 tech x 40 att. hours x 44 weeks x 107.5% overall efficiency x £60 per hour = £113,520

Less

1 tech x 40 att. hours x 44 weeks x 92.5% utilisation x £12 per hour = £19,536

Gross profit on labour sales (Labour gross profit) £93,984

Direct expenses

1 tech x 40 att. hours x 44 weeks x 7.5% lost time x £12 per hour = £1,584

Technician’s pay for hols, sick & training (40 days of 8 hours) @ £12 = £3,840

Technician’s National Insurance and perks = £3,744

Direct profit on labour sales £84,816

A small increase in productive efficiency – just about three percentage points – has resulted in an extra annual profit on labour of £2,640.

Improving labour utilisation and productive efficiency

So far, we have explained how to measure time in a service or body repair workshop, how labour efficiency is calculated, and how management accounts are designed to highlight the sources of labour profit. We have shown how productive efficiency affects profitability. Next, we look at the effects on profit of improving labour utilisation, and then both productive efficiency and labour utilisation at the same time.

Increased labour utilisation

Taking the same example discussed earlier, let’s improve labour utilisation by assuming that our technician manages to work 38 hours out of 40 hours attended instead of 37, while leaving the productive efficiency the same (113.5%) as in the original example. This means that utilisation goes up to 95% (38 work hours divided by 40 attended hours), and even if the productive efficiency is the same at 113.5%, then our technician will produce 43.1 sold hours (38 hours worked x 113.5%). That is, the technician’s overall efficiency has increased to 107.8% (43.1 sold hours divided by 40 attended hours).

The effect on labour profits is then:

Labour sales

1 tech x 40 att. hours x 44 weeks x 107.8% overall efficiency x £60 per hour = £113,520

Less

1 tech x 40 att. hours x 44 weeks x 95% utilisation x £12 per hour = £20,064 Gross profit on labour sales (Labour gross profit) = £93,456

Direct expenses

1 tech x 40 att. hours x 44 weeks x 5% lost time x £12 per hour = £1,056

Technician’s pay for hols, sick & training (40 days of 8 hours) @ £12 = £3,840

Technician’s National Insurance and perks = £3,744

Direct profit on labour sales = £84,816

The improvement, from one extra hour worked per week, is £2,640 in a year.

Do both!

But what would happen if both utilisation and productive efficiency improved at the same time? That is, the technician still attends 40 hours, but works 38 hours at the improved productive efficiency of 116.2% (from Part 2) thereby producing 44.2 sold hours (38 work hours x 116.2%) and hence an overall efficiency of 110.5% (44.2 sold hours divided by 40 attended hours). The calculation looks like this:

Labour sales

1 tech x 40 att. hours x 44 weeks x 110.5% overall efficiency x £60 per hour = £116,688

Less

1 tech x 40 att. hours x 44 weeks x 95% utilisation x £12 per hour = £20,064

Gross profit on labour sales (Labour gross profit) = £96,624

Direct expenses

1 tech x 40 att. hours x 44 weeks x 5% lost time x £12 per hour = £1,056

Technician’s pay for hols, sick & training (40 days of 8 hours) @ £12 = £3,840

Technician’s National Insurance and perks = £3,744

Direct profit on labour sales = £87,984

The improvement is £5,808, multiplied by (say) seven technicians is a sizeable £40,656 extra profit per annum.

This shows how significant for profitability only relatively small increases in labour efficiency can be. However, labour profits can also fall just as significantly if labour efficiency falls by an equally small amount.

Hidden lost time

If small improvements in labour efficiency translate into big improvements in labour profits, but any slight reduction means big falls in profit, then you need to know what levers to pull to make sure you are on the side of big profits. So what’s the secret? Or is it about managing the minutiae?

There’s no secret. The trick is managing every aspect of a workshop. Managers have to do everything they can to make sure technicians, panel beaters or painters are working as fast as possible for as long as possible. In other words, you must do everything to minimise lost time, and provide your productive staff with every means to support faster working like training, power tools… and even placing certain jobs with productives who are the most experienced. If you have a clutch job, then give it to the clutch expert.

But there is one secret worth knowing, and that’s ‘hidden lost time’.

As we have shown, lost time is a killer. But then lost time, if it’s measured at all, is usually about the most obvious elements such as rectification of faulty work, collection and delivery of cars, and cleaning and maintenance. However, there is a lot more lost time hidden away within jobs. Technicians may seem to be working hard, but too often they may be waiting for spare parts at the back counter of the stores. Or a technician may be waiting in line to use a piece of equipment like a wheel alignment rig.

The outcome of ‘hidden lost time’ is a fall in productive efficiency, but labour utilisation is unaffected because you haven’t measured the losses. But, as you have seen, the effect on profits can be huge. So apart from attending to the obvious and direct influences on labour efficiency, which affect how fast technicians work (productive efficiency) and how long (utilisation), workshop managers must also attend to anything that can slow them down when they are supposed to be working.

Helpful Tips for DIY Car Radiator Flushing

Once you turn the key, start your vehicle’s ignition and begin to drive, your internal combustion engine starts producing a substantial amount of heat. In order to remove this heat and prevent your engine from overheating, a functional radiator is needed. A car radiator uses thermal heat exchange to eliminate high temperatures and heat to keep a vehicle’s engine in working condition. This means that larger vehicles require larger radiators to facilitate the same effect.

For radiators to be effective and stay cool, they must be cleaned regularly by means of flushing. Solid deposits, residues, and other sediment buildup can cause a cooling system to clog or fail entirely. Flushing a car radiator is one of the most important routine maintenance jobs and must be done to keep vehicles operational over time. Fortunately, it can be done on your own. It’s also quick and inexpensive to do. Continue reading to learn some tips that can help you when it comes time to flush your car radiator.

Get Started With the Right Supplies

The first thing to do when it comes to flushing a car radiator is gather up all the necessary supplies and materials. It is never a fun situation to get halfway through your project, only to discover you are missing a key element. Going back to the store could pose a problem; especially if the radiator has already been drained. Ideal provisions for radiator flushing includes a funnel, cloth rag, coolant, radiator flush solution, Phillips screwdriver or wrench, separate container for old coolant, and extra rags for accidents and spills. When you have determined that all your supplies are in place, you can begin the process of flushing the radiator.

Here’s What To Do:

Before you remove the radiator cap, be sure the car engine is COMPLETELY cool; otherwise you run the risk of spilling hot coolant on yourself. And this really burns!

Next, flush the used coolant out of the radiator. Do this by locating the radiator drain plug. It is typically located at the bottom of the radiator. If you have trouble finding it, refer to your owners’ manual or look online for pictures and instructional videos. You can also contact a professional mechanic for over-the-phone assistance.

Once you find the drain plug, place the container for old coolant under the drain and open it up. Let the old coolant flow out for a few minutes; if it seems to be moving slow, check to see if the plug is all the way open.

When the radiator is empty, replace the drain plug and open the radiator cap.

Next, pour the flush cleaning solution inside. Fill the remaining space inside the radiator with room temperature water.

Now you are ready to replace the radiator cap; just be sure it is screwed on tight. It is possible for caps to fall off, which allows coolant to escape from the radiator.

Let the car engine run until it reaches its normal driving temperature. Then turn it off and let it cool completely.

Once the car engine is cool again, you are ready to flush the solution from the radiator and add fresh clean coolant. Use the same emptying process as before.

Use a 50/50 solution of coolant and water to get optimal and safe results. You can find pre-mixed coolants at your local auto store. This is sometimes more convenient.

You Will Have to Undergo Some Driving Lessons Before You Are Allowed to Drive a Car on the Road

To anticipate spending too much money on medical expenses and car repair, purchasing insurance coverage is a good idea. In the event of accident, other people can be in danger too. If you are at fault, other people who are involved in the accident may file lawsuits against you. This particular circumstance will direct auto insurance company to handle all the necessary requirements, for example providing a lawyer, paying court fees, etc.

Insurance company eliminates the hassles, so you will be able to do your everyday activities without worrying about the issues too much. Another reason is that driving without insurance is basically against the law, and there will be penalties for that. Please put in mind that penalties vary between states. The difference can only be in terms of specific details, as instructed by the DMV of your state. All states have the same penalties, but there are differences in the amount of fines, procedures to reinstate insurance, etc. Some of the most common penalties are briefly outlined below.

Driving Ban & Suspended Registration

If you are caught driving without valid insurance, you will be banned from driving and your vehicle’s registration will also be suspended. There is a very simple rule: if the car has no insurance, the vehicle has no plate as well. Commonly you have to turn in the vehicle’s plates to the local DMV. In certain states, such as in New York, car insurance must be provided by a licensed company, meaning your insurer has to be listed or licensed by New York State Department of Financial Services.

Every state has a local insurance department where you can obtain a list of licensed insurers. Please make sure you only purchase coverage from the listed car insurance companies to get valid proof of insurance. In New York, insurance coverage provided by any insurer from any other state will not be considered valid. It makes sense since every state has different details in traffic regulations. If you are driving without insurance, the New York State will suspend your vehicle’s registration until certain time period.

If registration suspension exceeds 90 days, your driver license will be suspended too, meaning you cannot drive any vehicle anymore until your driver license is reinstated. In New York, you have to pay a fee of $25 – $50 to reinstate the driver license. It is better to turn in your plates to the New York DMV before your insurance coverage ends; you will then get a receipt to proof that you already turned the plates in. This rule also applies even if your car is in the storage or parked at public road.

Car Gets Towed

Excluding New Hampshire, all states in the United States penalize uninsured drivers. However, each state implements different set of rules concerning the fines and other penalties. If you commit any traffic offense, your car will be pulled over and the officer will ask you to produce driver license, vehicle titles, and proof of insurance. You will be fined based on the offense. In most states, if you fail to produce proof of insurance, your car will be towed away and impounded.

Because you were driving the car when it was pulled over, you will be responsible for paying the storage fees and fines to get the car back. Depending on the state where you live, the total amount can be thousands of dollars. Considering you have to also purchase insurance before you can repossess the car, it is safe to say you will spend more money in addition to the fines and storage fees. Usually, you will need at least liability coverage to take the car back. However, if your driver license is suspended due to traffic offenses such as DUI (Driving under Influence) or other violations, you may have to take someone with a valid driver license.

You can bring the original insurance document, the copy of it, or simply fax it depending on the DMV. Please also make sure that you bring enough money to pay all the charges. Instead of paying thousands of dollars, it is best to purchase insurance coverage which is probably way less expensive. You can use online car insurance calculator to estimate the price of insurance policies from almost every insurer.

SR-22 Requirements

Once again, depending on the state where you live, proof of insurance can be in different forms. One of the most common is SR-22 document, which basically shows you have the least minimum liability requirement to be considered legal for driving. There are some situations where SR-22 is obligatory such as when you are caught for driving under influence, at fault in the event of accident, you commit too many traffic offenses, or having non-valid driver license.

If you are required to obtain an SR-22 document, you will have to maintain the minimum insurance requirement of the state in which the document is issued and keep the document for usually 3 years, even if you move to other states. If in any case your insurance lapses or is cancelled, your vehicle registration and driver license will be suspended again. SR-22 requirements can be different from state to state, but you can ask your local DMV or insurance company for more details.

Besides SR-22 document and insurance card issued by your insurer, there are two more valid proofs of insurance that you can use. In some states, the preferred form is electronic database sent by your insurer to the DMV. Even if your insurance company uses this procedure, you must always keep the insurance card with you as backup. It is worth mentioning that some people choose not to be insured, yet they use a different form of responsibility, which is a large amount of deposit. Surprisingly, many states allow people to use this form indeed.

There are two possible methods you can use if you choose not to purchase insurance policy from any company. First, you have to make large deposit but the amount varies depending on the state; it is usually from $25,000 to $100,000. Another way is to purchase or secure a bond with a surety company. The surety bond company should be an authorized one in your state. If you prefer to use one of those methods, please make sure to keep the certificate of bond or deposit with you.

Fines

The car is indeed yours after you purchase it, but you are not allowed to drive it on the road unless you also buy insurance coverage for it. The car should be covered by at least liability insurance before it can get to roadway. When you are pulled over due to any reason, the police officer will ask for insurance card or any other valid proof of insurance.

If you cannot produce it, you will receive a ticket in addition to the actual reason why you were pulled over in the first place. For example, if you are being stopped for speeding or driving in the wrong lane, and you are currently not insured, the tickets you receive will include all those offenses. Again, depending on the states, you will probably be able to dismiss the ‘driving without insurance’ ticket.

The other violations have been committed, and there is no way to dismiss the tickets. If you can produce the proof of insurance within the time period indicated on the ticket, this specific offense can be dismissed. This is possible only if you were actually insured at the traffic stop, yet for whatever reason you did not bring insurance card or any other proof of insurance. Based on this, even the best car insurance companies in the world will not be able to save you from the fines.

In case where you were not insured at all at the traffic stop, you have to deal with an exceptionally high fine. In Ontario, for example, the minimum fine for this offense is $5,000. According to NAIC (National Association of Insurance Commissioners), the exact amount varies by state, but it typically starts from $5,000 to $10,000. There is also a 25% surcharge added to the actual fee. Driving without insurance doesn’t make any sense, since you can get cheap auto insurance easily from many companies.

Jail Time

Jail time is usually for repeat offenses only. Uninsured driver will be put in jail for a maximum of 30 days depending on the situation. To make things worse, you still have to appear in court and pay the fines based on the offenses you committed. You will therefore are penalized with both penalties. Based on a study conducted by IRC (Insurance Research Council) in 2011, one out of seven drivers in United States is uninsured.

The main reason is that insurance policies are expensive, which is not a good excuse after all. If you do a little online research, you will find numerous websites providing car insurance estimate services for you free of charge. The websites usually access some of the most reputable insurers in the state and perform the estimation based on the personal data you provide such as age, car model, address, mileage, etc.

Such estimation will not be 100% accurate, but you can at least predict the actual amount you need to pay. If you won’t use independent estimator, you can ask for car insurance quotes from almost every company in the state. Those companies nowadays provide the quotes for free, and you can get it without buying their policies.

What happens if the other driver has no car insurance?

No Pay No Play

This is a relatively new penalty, and it is currently only implemented in 8 states across United States including Oregon, North Dakota, Alaska, Iowa, California, Michigan, Louisiana, and New Jersey. The law basically states that uninsured drivers are not allowed to receive compensations from insured drivers regardless who are at fault in the event of accidents. In Montana, for example, uninsured drivers are allowed to file a lawsuit against their insured counterparts to obtain compensation for non-economic damages.

With ‘no pay, no play’ law, uninsured drivers are prohibited from doing so because they basically are not providing the same benefits to others. In the simplest way, uninsured drivers are considered cheating on those who are insured. Those who do not have insurance will not be allowed to collect compensation for non-economic damages from other drivers who actually have insurance policies.

This can be a good idea, since there are cheap auto insurance quotes all over the market, and some people simply don’t want to purchase it even if it is against the law. The only way that uninsured drivers can file a lawsuit is when they pay large deductible (usually around $10,000). Only after that they can sue for property damage.

Buying a Used Car Part Wisely!

Each time you want to buy a used car part, insist on a great deal. Don’t think you will count on luck though – no way. There are a few things you need to do for making sure you don’t end up with a bitter deal.

Spend a little time now to save you serious money in the future. Make sure to check on Consumer Reports on the safest car parts out there. Appearance is one thing, but safety takes the priority.

Use a credible car yard shop and find out if you can bring the car for on-site fitting. Ask what cars they normally repair most frequently. Get details about the scope of inspection and, how long it takes, including the price. Have this information written as a precaution.

After car part inspection, get a written report with all costs involved for repairs. Also the vehicle’s make, model and VIN must be mentioned in the report. Read through every single small print and where in doubt seek for clarification. Your final offer should be based on the estimates if you ever decide to bargain for the car.

Why you should not buy used part from an individual?

Individuals or private sellers are not covered by the Used Car Rule. They also do not have to use the Buyers Guide. But, you can rely on the Guide’s list of an auto’s major systems to do your shopping. Do not be enticed by the outside look of the used car part, instead depend on the inspection by an approved mechanic.

A private sale is likely to be on an as is basis, the only exception is when your purchase agreement with the seller states otherwise. If a written contract exists, the seller has to live up to their full responsibility. Consider the manufacturer’s warranty or any other purchase contracts. The issue is whether these warranty and service contracts are transferable or not. Prior to the car part purchase, enquire if it’s still under warranty or service contract.

Car Title Loans For When Your Car Breaks Down

We all know how it feels, when your car just does not sound right and you know you need to bring it into the shop, but you fear what the mechanic will say. If only you had the money, you would buy a new car. If only you had the money, to fix your car, or get that new transmission the mechanic said you needed…

These days, most people are opting to fix their cars instead of buying new ones, because it’s less expensive and just makes sense in this economic environment. You would think since you own this car, fixing it is definitely cheaper than buying a new one, but auto repairs can be very expensive. And if you have bad credit, where are you going to get the money to cover all of the mechanic’s bills?

Here’s an idea you may have over looked – car title loans. With title loans, you can apply easily and all you need to do is have a clear title on your vehicle. That way you can use the equity you have in your car as collateral to secure the loan. If you can apply online, the lender will not know if the car is running or not.

Car title loans are often used to help people pay for emergency repairs to vehicles. Before you apply for the loan, get an estimate on the repairs so you know just how much you need to cover all the costs. Then fill out the application online. It’s quick and easy and you shouldn’t take long to find out if you’re approved.

The lender will run a credit check, but you can get approved whether you have good credit or not. The loan amount will be for a percentage of the value of the car. But remember if you fail to make payments, the lender can repossess the vehicle.

This type of loan is a secured loan so you won’t be subjected to those insanely high rates of the unsecured variety. Once your car is fixed, you get to keep the car while you pay off the loan. So, you don’t have to rely on others for transportation. Because your car is so important for getting to jobs or interviews, you’ve got to keep it in good working condition. Just because you have to drive an old car doesn’t mean it has to look it.

Get enough cash from car title loans to not only fix what’s broken, but give it a shiny new paint job as well. Change the color, give it some character. It’ll be like having a new car without the new car payment. Depending on how much you borrowed, you can have it paid for in two years or less.

Car title loans are great for those emergency situations when you need fast cash. When you’re car goes kaput, don’t give up on it. Apply for car title loans, get it fixed and get back on the fast track in no time. You can’t afford not to.

How to Know When Car Brakes Need Work

It would be a perfect world if our cars and trucks never required routine maintenance and upkeep, but unfortunately that is not reality. Our vehicles require a specific level of care to preserve and sustain appearance, performance, and most importantly, safety. Routine maintenance such as windshield wiper blade replacement, radiator flushes, tire rotations, oil changes, tune-ups, and more, are critical to overall vehicle preservation.

Pay Special Attention to the Brakes

One of the most important components to keep in a safe and functional condition is the braking system. This system requires special attention in order to keep you safe on the road and protect your investment. If you neglect your car brakes, not only can it cause extra damage to your vehicle, it can lead to your car being a total loss. That is because, in many cases, when an entire braking system needs replaced, the cost can exceed the total value of the vehicle. In this situation, a person’s best bet is to sell their totaled car to a junk car buyer, purchase another vehicle, and then stay dedicated to a routine brake maintenance agenda to avoid vehicular damage.

As soon as you start to notice signs of brake problems, bring your car into a professional automotive body shop for an inspection before the problem can cause overall car damage. Don’t know the signs that suggest your car brakes need some work? Continue reading to learn the most common ones to keep an eye out for while you drive!

Repair or Replacement?

To understand how to identify or look out for brake problems in your vehicle, first it is helpful to understand the basic components of a car brake system. There are four general parts: the hydraulic clamp, brake fluid line, brake pads, and brake rotors. Some may argue that brake pads and rotors are actually part of the wheel, but in this case, we will still include them because they can influence the need for brake repair. In most cases, the brake lines and hydraulic clamp will not experience much wear and tear; they are built to last a long time. On the other hand, brake pads and rotors are susceptible to wear and tear at all times and will need replacing every few thousand miles or so.

They are exposed to deterioration every time you drive because the pad presses against the smooth metal rotor every time the brake is applied. Over time, this pad is worn down and will make a recognizable noise to warn you that they are low. Brake pads squeal or hiss when they get low. The noise is actually the result of the bare pad scraping against the metal rotor (the metal disk that spins on the wheel) and causing friction between them. It can start out as a faint squeak, and turn into a high-pitched squeal if neglected. If you hear grinding then the pad is most likely worn completely thin and is grinding against the rotor. This can really damage the brake rotors. The thickness of the brake padding, the amount of driving you do, and the way you drive all influence the amount of times you will need to replace them.

Selling a Junk Car for Cash

If you discover that your car brakes are shot and need to be replaced, but the cost exceeds the total value if your vehicle, you can still make it profitable by selling it to a junk car buyer. Choose a company that has premium electronic scales that can accurately assess the value of your junk car. Then use the cash toward another vehicle!

Insurance Totaled My Car – What This Means

“Your vehicle is a Total Loss.” These words, more often than not, spark immediate controversy between an insured and their insurance company. The main cause of controversy between an insurance company and an insured as it relates to total loss is that most people feel their vehicle is worth more than it really is.

A vehicle, though historically not a good investment, is very personal to us. Many of us spend a great deal of time in our vehicles each day and grow attached to our car. Many others ”trick out” their cars and inherently feel that their modifications enhance the value of the car.

I thought it might help some folks if they heard exactly how an insurance company views this and how they go about compensating you for your car should it be determined to be a totaled. There are typically two main things involved in understanding this process: What exactly is a Total Loss and how is the value of a car determined. In this article I am going to discuss and define a Total Loss from an insurance companies perspective.

So, what exactly does it mean when your insurance company deems your vehicle a total loss? In general, there are two types or measurements if you will when it comes to making this determination: Financial or Economic Total Loss and an Obvious Total Loss.

Financial or Economic Total Loss

A vehicle is often declared an Economic Total Loss when the cost of repairs exceeds the value of the vehicle, plus sales tax, less your deductible. I am sure you have heard that there is a percentage used to determine if a car is an Economic Total Loss. You have probably heard numbers from 50% to 70%, or more. This is true, however, it is important to know that not all states set an actual percentage and that for the states that do not set percentages, it is up to the insurance company to determine what that will be.

Although all insurance companies that are free to set this number themselves are all different, a common number you will hear is 70%. What exactly does that mean? I thought a quick illustration might help:

Market Value $15,000

Plus tax $ 1,050 (7% used as example)

Sub-total $16,050

Less Deductible $ 500

Total Loss Value $15,550

Cost of Repairs $11,662

Repairs are 75% of the value

In the example above, your insurance company would likely determine your vehicle to be an Economic Total Loss. One thing to remember is that if you are paid the value of your vehicle, the insurance company will retain the salvage or damaged vehicle and then sell it to a vendor. Most insurance companies have negotiated contracts with salvage buyers and will use that avenue to recoup some of the money paid out for the total loss. In the example above, your insurance provider would know that your car had a salvage value of $3,000 (example). So, when making their total loss decision, they would factor in this amount and subtract it from the total amount paid of $15,550, bringing their net cost to $12,550.

One other brief point to make that is worth noting is that your insurance carrier will also factor in estimated supplemental damages were your car to be repaired. From my experience as an adjuster and claims manager, there are often supplemental or additional damages/repairs identified once a car begins the repair process. These damages are often discovered on “tear down” or after parts of the vehicle are removed and additional damages are more visible. In many cases it is almost certain that there will be additional damages based on the visible damages, however, an adjuster will only write for what they can see and note that additional damages are likely.

Obvious Total Loss

An Obvious Total Loss or OTL is in which the damages to a vehicle are so extensive in terms of repair and/or putting the structural integrity of the vehicle at risk with a repair, that the car is determined to be an OTL. Some examples of an OTL are:

  • Fire Damage
  • Rollover
  • A theft
  • Extensive Water Damage
  • High impact front-end collision
  • T-Bone or hard hit to the side of a vehicle at the center-point

In most cases, a claims adjuster will not have the direct authority to determine a vehicle to be an OTL. The two insurance companies I worked for required a manager approval to make this call. With today’s technology, that can be done easily in the field by simply sending some detailed photos to a Claims Manager or Property Damage Manager. In this case, there isn’t a cost of repairs necessarily but the valuation process is the same.

Hopefully this helps you understand what is meant when you are told that your car is a total loss. Your insurance claims adjuster should explain all of this to you, however, having a basis understanding will certainly help should you find yourself in this situation.

7 Scenarios Wherein a Car Insurance Claim Might Get Rejected

Car insurance is a mandatory investment as the law. Therefore, a large number of car owners opt to pay a premium for a car insurance policy to safeguard their cars against a possible collision. However despite this, a majority of their claims are rejected by companies. This is because people are unaware or rather ignorant to the intricacies related to car insurance. Therefore, a major chunk of car insurance claims are rejected. To stop this from happening, let’s go through a list of reasons where a car insurance claim might get rejected:

1. Intimating your insurer late or not at all: Please be informed that your claim is destined to be rejected if you fail to inform your insurance provider in the stipulated timeframe. On an average, you should update your insurance company within 48 to 72 hours from the time of accident or collision.

2. Driving under the influence of alcohol or any other drug: This one is a no-brainer but still most people are negligent about it. If you are driving when you have consumed alcohol not only are you breaking the law, but even your insurance company will refuse to cover in case of an accident.

3. If your car is being used for commercial purposes: If you have a private car and it is being used for any commercial use such as being used to carry goods or passengers than your car insurance provider can reject your claim. This is because there are different policies for Private car and commercial vehicle policies.

4. If you drive without a valid license: In case you or anyone driving your car is driving valid license and face an accident then your coverage becomes null and void. Therefore, ensure you renew your license on time.

5. Starting the repairs before inspection by insurer: When you intimate your insurer about the collision or accident, a surveyor will visit you to inspect the condition of the car and authenticate your claim. Without this inspection, the insurance company will be unable to trace the degree of the repairs and estimate the cost involved. Therefore, your claim is bound to be rejected.

6. Failing to transfer the policy from the previous owner: There is going to be some verification during the claim process. In case, the car insurance policy is not in your name then your insurer has the right to refuse your claim.

7. An Electrical or Mechanical Breakdown: In case your car is damaged without any external collision due to some electrical or mechanical breakdown then you are not covered by your car insurance policy. In this case, you will have to shell out some money from your own pocket.

Next time be more careful of all these reasons and ensure you make maximum utilization of your car insurance policy.

Different Types Of Car Repair Services

Whether we like it or not, chances are that we’ll have to take in our auto for car repair at one point or another. It may be for simple maintenance and service such as an oil change. In the case of a collision or accident, damages may be more extensive and require more care including dent removal and auto body work. Let’s take a look at some of the most common types of car repair.

Auto Body Repair can restore a vehicle to its original condition after a serious collision. A certified technician performing auto body repair may perform simple tasks such as replace the bumper or fix minor dents. In case of a serious accident additional work may include straightening the frame.

Daily usage can give a worn appearance even on the most well-maintained cars. Detailing involves a very thorough cleaning inside out. The technician may use polish in order to smooth out tiny scratches and wax is applied to achieve a glassy showroom quality shine. Additional procedures may involve cleaning the engine, shampooing the carpets and even neutralizing unpleasant odors. It’s a good idea to detail a car before you decide to sell a vehicle because it boosts up the car’s value.

Many people also find themselves having to replace auto glass at one time or another. It is illegal to drive with a cracked or broken windshield due to the fact that it obstructs the view of the driver. It is actually very dangerous to drive with a cracked windshield; any force to the windshield can cause it to break. It’s important to have auto glass replaced as soon as possible if there is any damage in order to avoid bodily harm.

No one likes unsightly dings or dents on their car. “Paintless Dent Removal” is a process where tools are used to repair the dent. This technique can also be used to fix repair caused by hail damage. This process only works on minor dents.

Always ask for an estimate before you have any services performed on your automobile. In some cases you may opt to purchase your own parts online since that may be cheaper than purchasing it through the repair shop. It is a good idea to make sure that all the technicians are properly certified. Car repair and auto body services enable us to keep our cars running smoothly and looking great for many years to come. Taking good care of your auto also assures that you will be able to fetch a good price once you decide to sell it.

Car Repair – Drive To The Best Mechanic To Receive Topnotch Maintenance

When we are in an accident or if our vehicles start making funny sounds, it can be a worrisome time. Not everyone knows of a reliable auto shop to go to and we all would rather not have to pay mechanic bills. Every now and then, some kind of car repair is necessary, so it is best to know beforehand who to go to. Keep reading to find out how to locate the best auto garage near you.

In the event that you are in need of muffler, brake, tire work, or just an oil change, make sure to take your car to the best workers in the business. There is nothing quite like knowing exactly who to take your car to, being fully confident that you will receive quality service and great estimates. Start looking today, so as to be sure this is what you can rely on in a time of need.

Few personal belongings are as important in our lives as our automobiles. This is why knowing of a great and affordable car repair mechanic is such a big deal. Plenty of us may be paranoid of being overcharged or of receiving less than desirable repairs when we take our cars to a servicing garage, but this is not how it has to be. All you have to do is find out about the shops nearby by asking some routine questions.

It is great to ask about standards in regards to mechanic training and qualifications. If you need to know, inquire about how well experienced the workers at a particular location are. In addition, you may want to ask who specifically will be attending to your vehicle. This is important in case your car has certain problems that need explaining. With any type of repair job, it helps to assist the person who will be working for you. Help them to help you best.

Furthermore, find out about the shop you are looking into seeking help form. How long have they been in business and what is their reputation? These questions can be answered by people you trust, so ask friends and family members if they have sought help from a certain business you have in mind. Knowing a little bit about a particular place can end up saving you a lot when the time comes for assistance.

It is impossible to know when a major accident will occur or when/if your automobile might break down, so know who to go to before you are in a bind. This can cut down on the stress of having to look for certified, quality repairs later on. We need our cars up and running as soon as possible, so take care of business ahead of time.

Great mechanics are waiting to help you offer discounts for routine services, so look around. Plenty of auto shops are happy to take care of regular tune up jobs or even tough engine work. No matter what services you need, it saves to know where to get them.