Why Car Repairs Are Getting So Expensive

Summary

The cost of vehicle repair is increasing due to factors like heavier, more complex vehicles, a shortage of skilled technicians, and pandemic-induced supply shortages. Newer segments like EVs are particularly expensive to fix, but automakers are motivated to reduce costs. Repair costs have risen faster than inflation, with a significant increase post-pandemic. The complexity of modern vehicles, including advanced safety features and new materials, contributes to higher repair bills.

Takeaways

• 📈 The cost of vehicle repair is rising significantly, with repair costs increasing 4.1% per year compared to the overall inflation rate of 2.8%.
• 🚗 Newer vehicles, especially electric vehicles (EVs), are more expensive to repair due to their complexity and the use of new materials.
• 🔧 A shortage of skilled technicians, exacerbated by the pandemic, has contributed to higher repair costs.
• 🌪️ The industry is at an 'inflection point' where various factors are combining to drive up repair costs.
• 💼 Auto manufacturers are motivated to reduce repair costs to maintain vehicle sales and affordability.
• 📊 Repair costs have increased sharply since the pandemic, with a jump to about 10% in 2022.
• 🔧 The distinction between maintenance and repair is important, with maintenance involving routine checks and replacements, while repair addresses broken parts.
• 🚙 Modern vehicles are heavier and more powerful, leading to more severe crashes and higher repair costs.
• 🛠️ Advanced safety technologies in vehicles have reduced minor accidents but have also led to a shift towards more severe crashes.
• 💡 The increasing use of lightweight materials like aluminum and new manufacturing methods has made repairs more complex and costly.
• 🔌 The high-voltage batteries in EVs require special handling and safety measures, adding to the repair costs.

Q & A

What is causing the increase in vehicle repair costs?

The increase in vehicle repair costs is due to several factors including heavier and more complex vehicles, new materials and manufacturing methods, a worsening shortage of skilled technicians, and pandemic-induced supply shortages.

How are electric vehicles (EVs) affecting repair costs?

EVs are reputedly more expensive to fix due to their complexity and the need for specialized parts and training. However, as EV technology matures and becomes more widespread, the total cost of ownership, including maintenance and repair, is expected to decrease.

What is the current state of the automotive technician workforce?

There is a shortage of skilled technicians, which has been exacerbated by the COVID-19 pandemic. Many experienced technicians left the industry during the pandemic, leading to increased labor rates and challenges in attracting new talent.

How has the pandemic impacted the cost of vehicle repairs?

The pandemic has led to increased costs for parts due to disruptions in global supply chains, as well as increased labor rates as technicians left the industry, causing a shortage and driving up wages.

What is the difference between vehicle maintenance and repair?

Maintenance involves routine checks, replacements, or replenishments of parts expected to wear down over time, such as tires or oil. Repair refers to fixing something that is broken, often due to a crash or defect.

How have vehicle weights and horsepower changed over the past few decades?

Between 1985 and 2022, average vehicle weights increased by about 33%, and average horsepower increased by over 100%. This has led to more severe crashes and higher repair costs due to the increased energy involved in collisions.

What role do new technologies play in the increase of repair costs?

New technologies, such as advanced safety features and computer systems, add complexity to vehicles, increasing the potential for more things to go wrong and requiring specialized knowledge and tools for repair.

How do the repair costs of EVs compare to those of internal combustion engine (ICE) vehicles?

The Highway Loss Data Institute found that EVs were only 2% more expensive to repair than their ICE counterparts. However, the difference in repair costs can be more significant when comparing specific models, with the main additional cost being related to managing the high-voltage battery of EVs.

What is the impact of new manufacturing methods like mega casting on vehicle repair?

Mega casting allows for fewer parts in a vehicle, but when something breaks, a larger piece may need to be fixed or replaced, which can be more expensive and time-consuming.

How do the costs of maintaining and repairing EVs compare to traditional vehicles in the long term?

While there may be initial higher costs associated with EVs due to their new technology, the long-term costs are expected to be lower because EVs have fewer moving parts, no oil changes are needed, and they often have simpler transmissions.

What is the current average repair cost for vehicles?

For the full calendar year of 2023, the average repairable estimate was $4,721, and this number is expected to continue increasing.