Selling a collision repair shop
Collision shops are valued on referral durability and cycle time. Where the work comes from matters more than the volume: direct repair program relationships, dealership referrals and manufacturer certifications each behave differently, and each transfers differently to a new owner.
Written and reviewed by Antoine Campbell. Last reviewed .
Where the work comes from
Insurer relationships are the value and the risk in the same sentence. They provide volume and they compress margin, and they are not guaranteed to survive an ownership change. Buyers ask early what happens to each program on transfer.
- Direct repair program relationships with insurers, and their performance requirements
- Dealership and fleet referral arrangements
- Manufacturer certifications, which gate access to certain repairs
- Walk-in and customer-pay work, typically the highest margin
Operating metrics that set the price
- Cycle time from drop-off to delivery, and touch time within it
- Severity, meaning average repair value per job
- Technician efficiency and hours per repair order
- Parts mix: OEM, aftermarket, recycled, and margin on each
- Supplement approval rates and rework percentage
Capital intensity
Booths, frame equipment, welders, measuring systems and ADAS calibration all require ongoing investment, and certifications carry equipment requirements. A shop that has deferred that investment has a capital need the buyer will price in immediately.
Diligence items specific to collision
- Management system reports on cycle time, severity and volume by source
- List of insurer programs and certification agreements with transfer terms
- Paint booth, frame rack and calibration equipment with service records
- Environmental permits for spray operations and waste handling
- Technician roster with certifications
- Rework and comeback log
What Maurant needs to evaluate this
- Three years of tax returns and current financials
- Revenue by referral source
- Insurer program agreements and certification status
- Equipment list with ages
- Environmental permits and property information
When Maurant is not the right buyer
- Shops dependent on a single insurer program with transfer risk and no other work
- Facilities with expired certifications and deferred equipment investment
- Operations with unresolved environmental permit issues
Questions owners ask
- Do insurer programs transfer to a new owner?
- Not automatically. Each program has its own rules and it is one of the first things we verify.
- Is customer-pay work more valuable than insurance work?
- Per job usually yes on margin. Insurance volume provides the base load. The mix is what gets underwritten.
- What about my paint supplier agreement?
- Supplier agreements with volume rebates or prepaid incentives need review; some carry obligations that follow the business.
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