Vehicle Repair Costs Have Increased by 20% in the Past Year: Here’s Why

If you’ve recently had your car repaired and were shocked by the bill, you’re not alone. The cost of fixing cars has skyrocketed, with the latest consumer price index revealing a staggering 20% increase in repair costs. This surge is significantly higher than the overall 3% rise in other categories examined in the price index. So, what exactly is driving up repair costs at such an alarming rate? Experts point to multiple factors that have contributed to this increase, and unfortunately, many of them are here to stay.

1. Increasing Complexity of Cars

Modern cars have become far more complex in recent years. Bumpers and grilles now feature sensors that were not present in older models. While these sensors enhance safety and functionality, they also drive up parts costs and increase the time required for repairs. According to a body shop owner interviewed by CNBC, fixing an accident-damaged car that has struck a deer now costs $1,500-2,000 more than it did 15 years ago.

2. Supply Chain Issues

The pandemic has had a significant impact on repair costs due to supply chain disruptions. Parts have become harder to source and are often more expensive as a result. Additionally, people are holding onto their vehicles for longer periods, leading to a higher likelihood of parts needing replacement. Data from S&P Global Mobility reveals that the average age of cars and trucks in the U.S. has increased from 10.5 years in 2010 to 12.2 years in 2022. While the pandemic played a role in this trend, recent interest rate hikes have made it more expensive to purchase new vehicles, potentially further increasing the average age of vehicles on the road.

3. Increase in Crashes

The number of crashes has been on the rise, contributing to higher repair costs. According to the National Highway Traffic Safety Administration (NHTSA), the number of crashes increased from 5.3 million in 2020 to 6.1 million in 2021. More accidents mean more vehicles requiring repairs, putting additional strain on repair shops and driving up labor rates.

4. Decrease in Repair Technicians

There has been a decrease in the number of repair technicians available, leading to a shortage of skilled labor. With fewer technicians available, labor rates have increased. This shortage is a result of various factors, including an aging workforce and a lack of interest among younger generations in pursuing careers in the automotive repair industry.

5. Technicians Offering Additional Services

Repair technicians now offer additional services, such as sharing photos and videos of faults with customers. While this service helps build trust between dealers and customers, it also adds to the repair bill. According to Skyler Chadwick, director of product consulting at Cox Automotive, this service increases the average repair bill by $260.

In conclusion, the significant increase in vehicle repair costs can be attributed to a combination of factors. The complexity of modern cars, supply chain issues, an increase in crashes, a decrease in repair technicians, and additional services offered by technicians all contribute to the rising costs. Unfortunately, these factors are unlikely to change in the near future, meaning that car owners should be prepared for higher repair bills. It is crucial for consumers to stay informed about these trends and explore options such as regular maintenance and extended warranties to mitigate the impact of rising repair costs.