CLAIMS HANDLING NEWS: State Farm parts bidding system under test

More details are emerging about “PartsTrader,” the online parts bidding system State Farm has been testing with shops and parts suppliers in several markets. The system enables a shop to upload an estimate, giving both new and used parts vendors an opportunity to see all the parts on the estimate and offer a “bid” on the pricing they can offer for any of the parts.

Screen shots distributed recently by the Society of Collision Repair Specialists, for example, show an estimate with four parts. On one part on the sample job SCRS illustrated, two dealers reduced the list price by $54.42 (about 15 percent) and the margin by 2 percent; on this part, the dealer would make $25 less, and shop would make $29.42 less (compared to the part being sold at the full discount on the manufacturer’s list price). Two of the other parts on the job had “bids” with similar discounts, and a used part was bid for the fourth part on the job.

If the cheapest bid on each of the four parts was chosen, SCRS said, the insurer would save about $239, and the shop would lose about $95 in parts profit.

State Farm has not announced a roll-out of the program beyond the markets in which it is being tested.

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