Collision shops and ADAS: What do the numbers say?

“I’m just gonna send it to the shop down the street.”

These are sad words for collision shops when it comes to ADAS calibrations. They’re very happy words for all the shops down the street.

That doesn’t have to be the case. Collision shops are particularly well positioned to take advantage of the ocean of ADAS calibration work available today, and will continue to be in the future.

If they just would.

That’s easier said than done, of course. Collision shops that pass on ADAS work believe they have valid reasons. They may feel they lack the space, or the techs may think it’s too complicated or too great an investment — they’re plenty busy doing the work they currently have.

Yet they’re well positioned, nonetheless, when you consider a few numbers. And while numbers alone may not tell the tale, they tell a pretty good tale. It’s one of opportunity.

$283 million in calibration work was outsourced by shops in 2023. (Which side of that equation were most collision shops on?)

There is $4 billion in projected revenue generated across the industry from ADAS calibrations by 2030. (ADAS is not going anywhere but up.)

60% of vehicles registered in the U.S. have ADAS components that need calibration if touched, moved or replaced. (This percentage is well on its way to 100.)

This last number suggests where collision shops have a built-in advantage. ADAS components don’t have to be damaged to require calibrations. They only have to be moved out of position, even the tiniest bit. Many routine procedures, such as suspension work or replacing a windshield, will suffice.

Although it’s not hard to trigger a calibration, far from every vehicle that arrives at a service shop will need one. But a collision shop? Almost by definition, you can be assured that most vehicles arriving on a collision lot will need a calibration.

More likely, calibrations. A windshield replacement will bring one calibration. A smashed-up front or rear end can bring a whole bunch of calibrations.

Collision shops can do more calibrations than a typical shop, and do them more often. That is opportunity.

What if? And what if they did? How does all this translate into profitability? Again, some numbers.

Rates for a typical ADAS calibration can run from approximately $100 to $450, with $232 as a generally accepted industry average. If a collision shop were to do only a single calibration per day:

5 vehicles per week x 51 working weeks x $232 x 70% profit margin = $41,412 unrealized annual gross profit

That’s nice enough, but once a shop makes a commitment to calibrations, it can do quite a bit more than one per day. It’ll be able to do about as many as it cares to and, in time, may need to consider opening a separate facility dedicated to ADAS work, as some are now doing. There is and will be that much of it.

Opportunity lost, opportunity cost. Now, here’s the part of the story that the numbers don’t tell. Except in certain circumstances, subbing out calibrations does a collision business few favors. You lose control of the vehicle and all that comes with it.

You give up control over the quality of the work but keep the responsibility. You give up nearly all the profit but retain all the liability. You take on the time and trouble of transport and increase the cycle time — possibly a lot — with little offsetting gain. Should things go south, you pay the price for a damaged customer relationship, not the shop down the street.

Again, this doesn’t have to be the case.

ADAS is still relatively new, but it’s no longer a mystery. Calibrations are a service that can be approached like any other and performed like any other. The path to success leads through education, starting small, gaining experience and expertise, and confidently expanding as the ROI justifies it, which it will.

In time, you may even become the shop down the street others are sending work to.

When your business is ready to get started with ADAS, visit Hunter Engineering for guidance, support, training and equipment.