In CRASH Network's third-quarter 2025 survey of 300 shops, reported in November 2025, about one in four said an insurer was paying them a lower labor rate than it had in January, and State Farm was the insurer named most often. The explanation was almost always the same: that's the rate for your market. Ask which market, and what data the number is based on. Most shops never get that far, because nobody at the shop has ever pulled the auto body labor rate by state documentation that already exists for exactly this fight.
The Rate Cut Notice Doesn't Care What State You're In
The cuts are real, and they are not isolated to one region. One shop's State Farm rate dropped from $60 to $55 an hour, an 8.3% cut. Another shop reported two rounds in the same year: $74 to $70, then $70 to $65, a cumulative cut of about 12%. A third shop had USAA cut their rate from $72 to $68. About a dozen other shops in the same survey named carriers beyond State Farm making the same move. None of these numbers came with a survey attached, and none of the shops that reported a cut said they were given a documented reason for the specific figure.
SCRS flagged the pattern at the Collision Industry Conference in November 2025: carriers are moving away from paying a rate based on what shops in the market actually charge, toward a rate the carrier itself calls reasonable, without defining reasonable, without a documented survey, and without justification sent to the shop. That's not a negotiation. That's a number handed down with no paper behind it, and it's landing in nearly every region of the country at once.
A 2024 GMC Sierra 2500 with a bent frame rail can run 38 documented structural labor hours on its own. Spread an 8% rate cut across a repair order like that, and the shop loses hundreds of dollars before a single supplement conversation even starts. Run that math across a month of structural work and the number stops being a rounding error.
What's Backing Your Posted Rate?
Here's the part that should bother you more than the cut itself. CCC's own 2026 Crash Course report found the mean labor rate across all labor types rose 2.9% industry-wide in 2025, the slowest increase since 2021, but still a rise. The same report put total cost of repair at $4,818 and showed calibrations now appear on 28.3% of repairable estimates, and each one adds its own fee to the repair. Repairs are getting more complex and more expensive to perform correctly. If the documented national trend is up and your specific carrier's letter says down, those two facts don't agree. One of them is wrong, and it's worth finding out which one before you accept the number.
Run this test on your own shop. Can you name the specific source behind your posted rate right now, in one sentence? If your answer is "that's what we've always charged" or "that's what the DRP contract says," you're in red territory. You have a number with no file behind it, and a carrier can overrule a number like that with a phone call. If your answer points to a specific survey, a state filing, or a documented market report, you're in green territory. You have something a carrier has to argue against instead of announce around.
A 2023 Subaru Outback with an EyeSight calibration adds documented calibration and body labor hours on top of the base repair. Multiply a few unexamined dollars an hour across that labor pool, across every vehicle like it that comes through the shop in a year, and the red-zone number stops looking small.
