If you offer insurance replacement rentals, you’ve got a pretty good idea of how long those units are on rent. But you may have been in the dark on how your length of rental (LOR) stacks up against averages for replacement rentals in your state, other states and the U.S. - until now.

Enterprise Rent-A-Car supplied Auto Rental News with information from its Automated Rental Management System (ARMS) for average LOR for insurance-paid rentals by state. The numbers, based on millions of claims in the third quarter of 2012, include insurance-paid rentals for direct and non-direct repair estimates, including independent appraisers and staff appraisers.

Enterprise publishes this report every quarter. According to Frank LaViola, assistant vice president at Enterprise, “Enterprise Rent-A-Car first started publishing this report to give body shops much-needed information to improve performance where needed or to highlight their cycle times when they are below the market averages. Within the ARMS application, shops can compare their performance to other shops within their market as well as sort their results by insurance company.”

The report includes 49 of the 50 states, excluding Hawaii because of significant differences in per-island data.

This data was used by Mitchell International Inc. in its first quarter Industry Trends Report, a snapshot of the auto physical damage collision and casualty industries. Through its collision claims management software, Mitchell processes millions of transactions annually for insurance companies and claims payers for collision repair facilities. The report is authored by Greg Horn, vice president of industry relations for Mitchell.

Rankings By Nation And Region

According to Enterprise, over the past five years, third-quarter LOR has averaged 10.58 days nationwide, with a low of 10.02 days in 2009. The map above reveals an average LOR of 10.8 days for the nation in the third quarter of 2012. This number was previously reached in 2011 and 2008.

In general, several factors — including weather, climate, economics, parts availability, individual shop conditions and the age of vehicles — all play a role in LOR. Differences in frequency and severity of weather events generally account for year-over-year variations in LOR. This was the case in the third quarter of 2012, as a handful of severe regional storms helped to offset the mostly uneventful summer weather throughout the rest of the country.

Enterprise subsequently published information on LOR for the fourth quarter of 2012. Generally, LOR increases in the fourth quarter as weather worsens, and 2012 was no exception: Average LOR for the U.S. increased from 10.8 days in Q3 to 11 days in Q4. However, when looking year-over-year, average LOR for Q4 2012 decreased 0.1 days compared to 2011.

By region, the effects of Hurricane Sandy impacted LOR in the Northeast in Q4, which nonetheless ended up lower than the fourth quarter in 2011. However, this reversed the trend from the third quarter of 2012, when the Northeast had the sharpest decline in LOR of all regions. In relation to Hurricane Sandy, the number of claims involving “total loss vehicles” is not used in these LOR calculations.

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Rankings By State

Looking at the chart by state, we can extrapolate the states with the highest and lowest average labor hours per repair estimate and rental lengths in the third quarter of 2012. From there, the Mitchell report calculated the states with the lowest to highest labor-to-rental length ratios, a measure of operational efficiency.

Texas has the best labor-to-rental ratio in this study. The states following Texas are Idaho, Minnesota, Utah and Washington. The top five states are geographically diverse, with varying shop sizes and number of work bays, the Mitchell report states.

In terms of average rental length alone, Minnesota has the lowest, with 7.8 days. North Dakota has the lowest average labor hours per repair estimate at 17.6 hours.

The five states with the highest labor-to-rental ratios are North Carolina, Nevada, Alabama, Tennessee and Louisiana. The Mitchell report points out that these states are from the Southeast, with the exception of Nevada, and also notes that the body shops in that region have some of the largest average square footage and the largest number of work bays, according to a survey by Body Shop Business.

Why Minnesota?

While the state of Texas is ranked highest in this study in labor-to-rental ratio, Minnesota has the shortest average rental length by far (and is tied for second in its labor-to-rental ratio). As a state that sees its fair share of severe weather-related collision repairs, what accounts for its high position?

McKenzie Spalding, director of operations for Choice Auto Rental, has an idea. Choice has served the Minneapolis market in insurance rentals for 20 years.

“Minnesota’s leadership role as the state with the shortest rental length is no surprise, as the sophistication and caliber of these collision centers is extraordinary,” Spalding says.

“With a large percentage of Minnesota’s collision centers located in the Minneapolis-St. Paul metro, many are either large third- or fourth-generation body shops, or independently owned multishop operators (MSOs) with more than five locations.

“The market and its players promote competitive excellence, and the presence of a strong and proactive state chapter of the Alliance of Automotive Service Providers (AASP-MN) only furthers this effort.

“Our Minnesota customers benefit from quick turnaround times and exceptional service due to the collision center’s constant emphasis on technical school student development, staff training, increasing production efficiency, enhancing CSI scores and even aligning themselves with rental companies that model this same standard.

“It certainly is no secret that a long LOR is desired by any rental company; however, the opportunity to be a partner to these precedent-setting collision centers is desirable as well.”