Table of Contents
Finding the right balance between which ADAS operations you’ll perform in-house vs outsourcing is a delicate balance. This decision impacts profitability, cycle time, liability exposure, and how smoothly your workflow functions.
As the growing complexity of ADAS changes the aftermarket landscape, you’re forced to choose between subletting calibrations or investing in equipment and training.
Consider this your guide to help you evaluate before outsourcing further or investing in ADAS equipment.
The changing landscape of the aftermarket: Higher stakes, higher expectations
Whether your shop performs some ADAS calibrations in-house or none at all, understanding these barriers and assessing the correct data before moving forward is vital.
Outsourcing ADAS calibrations: When it makes sense
Sometimes outsourcing ADAS still makes financial sense, but some scenarios warrant more investment from you.
If your ADAS volume is low today, subletting is still viable. However, according to a PARTS report, over 94% of cars model year 2023 or later are equipped with some level of ADAS. Soon, you’d be subletting a far larger percentage of all the vehicles you repair.
Facility limitations are another factor. ADAS calibrations require very strict environmental specs that not all buildings can support. For example, thermal camera calibration requires controlled lighting and the absence of background heat signatures, if you’re building can’t viably meet these regulations then outsourcing is the correct call.
You may also lack the expertise in your techs to tackle some calibrations. Luckily, certification programs, like the ASE ADAS certification is a quick way to keep any tech up to date. However, smaller shops with limited shops may not be positioned for that learning curve yet. If you’re a small shop with only a couple of employees, then outsourcing may be the right call.
Outsourcing reduces up front costs, shifts liability elsewhere, and can free up your shop for core repair. However, when the vehicle leaves, so does revenue.
When it pays off to bring ADAS in-house
Despite the initial investment, in-house ADAS calibrations pay for itself quickly. Signs that your shop is ready for more include a consistent calibration volume, environmental control, and a flexible staff.
If you’re already seeing a high volume of ADAS in your bays, don’t let these vehicles leave your building to get calibrated elsewhere. Chances are, you already perform some ADAS calibrations in-house, or have the means to do so. The costs of improving your calibration capabilities are dwarfed by the revenue increase by investment.
Having a versatile facility is a must for ADAS operations. Tight environmental specs put a strain on many shops, but if you can reasonably meet these needs then you are in a strong position. Shops that can meet OEM environmental standards are more profitable than those that are not.
Staff flexibility matters as much as staff size. Many younger techs already understand the nuance of ADAS and are eager to handle such tasks. A team that is open to learn and change makes the transition smoother.
The size of your business is also a deciding factor in bringing in-house vs outsourcing. If you’re a shop that has the capital to invest, then the ROI is compelling. The upfront cost is high, but so is the payoff.
Operational workflow considerations
ADAS changes your workflow.
Estimating platforms, VIN-based identification software, and the use of cutting-edge OEM equipment characterize the average ADAS calibration. Your workflow must be able to bend to incorporate these changes. Manual processes are being phased out as are shops that fail to adjust.
Ample space, lighting, documentation practices and floor conditions must be verifiable. If not, insurance payout claims will be denied and liability can swing back to you.
Shop efficiency is at the top of your mind constantly. Typical workflows leave no room for error, project turnover needs to be maximized, and insurance claim delays must be minimized or else revenue is lost. The goal is to add ADAS capability without slowing the shop down. The right implementation strategy and well-funded investment is how to avoid issues.
Long-term benefits of bringing ADAS in-house
Further investment in ADAS is worth the cost, even beyond the increase in shop revenue. Despite some short hiccups in workflow upon incorporation, your shop can expect to see:
- Improved cycle time without waiting on other shops
- Stronger insurer confidence and less bureaucratic hurdles
- Full oversight over all your shop operations and documentation
- More trust from customers when handled under one roof
These are all important factors to note before making any decision on the scope of your ADAS operations. Let’s now dive into associated costs.
Cost breakdown: Outsourcing vs. in-house ADAS
Now to discuss direct and indirect costs of ADAS investment to help you make an educated and measured decision, let’s compare shops that perform in-house calibrations and those who decide to outsource..
Outsourcing feels cheaper because costs are spread out, but the data tells a different story as our research report found.
According to our survey of 300 shops, those that are outsourcing at least one ADAS calibration feature are spending $23,990 annually, whereas shops that perform in-house generate $21,509 per month in ADAS revenue on average.
One of the biggest barriers to bringing more ADAS calibrations in-house is that investment has high initial costs and high maintenance costs.
On average, shops reported that they were investing an average of $55K to build out their calibration space with proper equipment and environmental conditions. Yes, this is a substantial number, as is the cost for ongoing equipment, tooling, and software maintenance costs. At the same time, when this investment is made carefully and accounts for the most common OEMs your shop sees, that initial investment can pay itself off quickly.
As an added bonus, 61% of shops that invest receive sublet work from other shops. Becoming an aftermarket leader in ADAS in your community increases your revenue and external trust from customers and insurers.
The role of software in either approach
Whether you outsource or bring in-house, software plays a huge role. Juggling a new workflow, OEM-requirements, and staff training all at the same time is a lot of work, but it doesn’t have to be stressful.
Choosing the right estimating software is key to accurate decision-making frameworks and building a strong relationship with insurers. Some well-regarded estimating software platforms include CCC ONE, Mitchell Cloud Estimating, and Audatex. These companies have great reviews and fit in nicely to any workflow, without breaking the bank.
An ADAS identification software is the best decision you can make at this stage. Revv is a software that instantly identifies any required ADAS calibrations through VIN-based and AI-powered tools. Revv also auto-generates OEM-compliant documentation that is accurate every time.
Revv has done the heavy lifting to limit liability, reduce workflow bottlenecks, and optimize revenue capture for your shop.
Choosing the right ADAS strategy for your shop
There is no one-size-fits-all answer for deciding to outsource or to invest in in-shop ADAS calibration. For some shops, it makes sense to outsource for a time but there are many shops that can capture more revenue by bringing more calibrations in-house.
The key is aligning your volume, facility, staff, capital, and your long-term goals in the same direction.
With all this in mind, you must match your calibration strategy to your shop goals. Set up a call with an ADAS expert at Revv to see how you can position your shop for long-term ADAS success.
