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Blog category: Driving

Vehicle Repair Costs Are on the Rise: Here’s Why

4 min read

If you own a vehicle of any sort, and you’ve had to take it in for repairs in the last couple of years, you’ve probably noticed that the bill for services rendered is bigger and the wait to get your car back is longer than previously. Chances are, you’ve just paid up and blamed the rising costs on inflation. But there’s more to the situation than just general inflation. Costs are on the rise due to several issues beyond anyone’s control. Spoiler alert: the global pandemic has played a key role.

Below, we unpack the reasons why your car repairs are now more expensive and take much longer to complete.

Pandemic-Related Shortages

The pandemic has caused problems for companies worldwide, but no one has been a harder hit than the electronics industry. Component shortages, including the semiconductor chips needed to operate modern vehicles, means we’re seeing fewer new cars roll off the assembly line. As a result, consumers who would typically buy a brand-new car are turning to used-car dealerships for their next set of wheels. Used cars can be a smart investment but will ultimately need more parts and more repairs to keep them going.

The automotive industry has experienced supply-chain backups in other areas too. Auto shops are seeing their inventories depleted due to distribution issues. Shipping times for car parts and other goods have increased due to a lack of container and cargo ships. Then, once the ships do arrive in port, they face unloading delays due to a labor shortage. That same labor shortage means there are fewer delivery drivers to get the parts to the repair facilities.

Top that with a shortage of skilled mechanics to put the parts into the vehicles and you can see how what used to be a simple process now takes a lot longer. CarParts CEO, Lev Peker, predicts that auto-part prices will rise an additional five percent by the end of the year, with the entire supply-chain process taking two months longer than before the pandemic.

Yet another casualty in the longer repair process: your insurance claim. For all the reasons listed above, the time it takes to get your claim settled when your vehicle’s been damaged in an accident will increase.

Longer Lasting Cars

Statistics from the Bureau of Transportation show that the average age of light cars and trucks is increasing steadily each year. The average vehicle age in 2020 was 11.9 years, which increased to 12.1 years in 2021. Whereas 25 years ago, the average age of a car was only 8.4 years. In the past, drivers celebrated when their odometer hit the 100,000 miles mark as it was considered quite a feat to have a car that old still drivable.

Nowadays, cars are lasting longer. This is good news from a sustainability angle, but older cars need to be repaired more often, and the repairs often need more parts. And because of technological advances, the parts are more specialized, less interchangeable, and more expensive.

Advances in Technology

The new materials like aluminum used nowadays to make cars more fuel efficient also make cars more costly. And as vehicle manufacturing depends more and more on technology to improve safety, repair costs get higher too. Many new vehicles sport advanced safety systems that now come standard, for example, backup cameras, blind-spot detection sensors on mirrors, and anti-lock brakes.

These Advanced Driver Assistance Systems (ADAS) include fragile sensors that can be easily damaged. Moreover, the sensors require a trained technician using special instrumentation to replace and calibrate them correctly. This, again, drives up repair costs. The cost to replace even a car bumper or a cracked windshield has more than increased dramatically in recent years.

Ironically, some of the technological advances have not improved safety. Features such as adaptive cruise control and lane departure assist have resulted in higher crash frequency with more severe vehicle damage. And, of course, more severe damage ends up costing more to fix.

Design Patents

Over the past ten years, car companies have increasingly patented replacement parts for the vehicles they manufacture. Easier to obtain than traditional patents for inventions, design patents are supposed to be limited to ornamental items on cars. Now car manufacturers are patenting basic parts as well, for example, fenders, headlights, and mirrors. This creates a monopoly on aftermarket car parts, leaving the car owner with no options and, you guessed it, a more expensive bill for parts.

Since we’re a nation of drivers, there doesn’t seem to be much we can do about rising costs and longer repair times. Although we can learn how to do basic maintenance to reduce costs. And, as with most services and big-ticket purchases, it pays to shop around. If your vehicle needs repairs after an accident, ask your insurance company for referrals to trusted auto body shops in your area. Or look at BBB ratings and ask friends and family who they trust with their cars.

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The above content is for informational purposes only and is not a direct representation of coverages offered by Wawanesa or its policies. The information does not refer to any specific contract of insurance and does not modify any definitions, provisions, exclusions or limitations expressly stated in any contracts of insurance. All references within the above content are illustrative and may not apply to your situation. The terms and conditions of the actual insurance policy or policies involved in a claim are determinative as to whether an accident or other loss is covered. To understand the coverage under your current policy, please log into the account management platform to review your policy or contact an agent directly.

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