Auto body repair is a high-ticket, insurance-heavy business — and that combination creates one of the most painful credit card processing fee situations of any merchant category. Auto body repair payment processing costs hit hard because transaction sizes are large, insurance supplement payments increasingly come via card, and margins in the collision repair industry are already under pressure from parts costs, labor rates, and insurer negotiations.
Why Auto Body Shops Pay More Than They Should
The average auto body repair invoice runs $3,000-$4,500 according to industry data. At a blended processing rate of 2.75%, that’s $82-$124 in fees on a single repair. A shop completing 40 jobs a month at that average is paying $3,300-$5,000 a month in processing fees — $40,000-$60,000 a year.
That number gets worse when you factor in card type. Insurance supplement payments, rental reimbursements paid by card, and large out-of-pocket deductible payments are often made with premium rewards cards or corporate cards — which carry higher interchange rates than standard consumer cards. The effective rate on those transactions can run 3-3.5%, pushing your annual processing cost even higher.
And unlike a retailer who sees a mix of small and large transactions, auto body shops see almost exclusively large transactions. Every single job is a meaningful processing fee event.
Dual Pricing in an Auto Body Context
Dual pricing works cleanly in auto body for both customer-pay and certain insurance-related transactions.
For customer-pay transactions — deductibles, out-of-pocket repairs, detail services — the implementation is straightforward. Your point-of-sale or invoice system shows both a cash/check price and a card price. The customer sees both before paying. When they pay by card at the card price, your processing cost is covered.
For insurance-related payments, the picture is more nuanced. Direct repair program (DRP) agreements with insurers typically govern how payment is collected and may restrict how you present pricing to the insurer or their insured. Your processor and your DRP agreement terms should be reviewed together before implementing dual pricing on insurer-directed payments. For non-DRP work and customer-pay transactions, dual pricing applies cleanly.
The Insurance Payment Angle
One dynamic unique to auto body is the increasing use of virtual cards by insurance companies for claim payments. Insurers issue single-use virtual Visa or Mastercard numbers for repair payments — and those virtual cards carry interchange rates as high as any premium consumer card.
When an insurer pays your shop via virtual card, you’re paying processing fees on that payment just as you would on any card transaction. This is an area where many shop owners are unaware of the actual cost they’re absorbing on insurance payments.
Dual pricing and surcharging rules apply differently to insurance virtual card payments than to consumer card transactions. This is a nuanced area worth a direct conversation with your processor about your specific DRP relationships and payment mix.
Implementation for Auto Body Shops
Most auto body shops use shop management software — CCC ONE, Mitchell, Estimating systems — alongside a separate payment collection process. Dual pricing implementation typically works at the payment collection terminal level, independent of your estimating software.
A Dejavoo terminal configured for dual pricing handles the customer-pay transaction cleanly regardless of what estimating or management system you use. The terminal displays both prices, processes the card at the card price, and settles correctly. Your shop management software records the payment amount — which is the card price the customer paid.
Consult your payment processor regarding how dual pricing interacts with your specific DRP agreements and shop management software.
Frequently Asked Questions
Can I implement dual pricing on insurance deductible collections?
Yes, for customer-pay deductibles where the customer is directly paying you. The deductible is the customer’s financial responsibility, and dual pricing applies to that transaction the same as any other customer-pay transaction.
What about insurers who send payment directly to the shop?
Virtual card payments from insurers are a specific category. Whether and how dual pricing or surcharging applies to those transactions depends on your DRP agreements and the insurer’s payment terms. This requires a direct conversation with your processor.
Will customers push back on card pricing for a large repair bill?
Auto body customers are already navigating deductibles, rental car logistics, and insurance claims — they’re not surprised by financial nuance. A clearly presented two-price option is well within the norm of what they’re already processing emotionally and financially.
Does dual pricing work with mobile or tablet-based payment collection?
Yes. Mobile-capable terminals support dual pricing for shops that collect payment in the office, at vehicle delivery, or in the field.
Is DropTheFee Right for Your Auto Body Shop?
If your shop is processing more than $20,000 a month in customer-pay card transactions, the savings from dual pricing are significant and immediate. Visit dropthefee.com/autobody/ or request a free processing analysis to see exactly what your current fees are costing you.