Why are vehicle repair costs getting more expensive?

Vehicle repair costs are rising for several interconnected reasons, including advances in technology, supply chain issues, labor shortages, and inflation. Here’s a breakdown of the main factors:

1. Advanced Technology in Vehicles

• More sensors and electronics: Modern cars have advanced safety and convenience features like ADAS (Advanced Driver Assistance Systems), backup cameras, radar, and lane-keeping systems. Repairing or recalibrating these systems after a minor accident is costly.

• Complex materials: High-strength steel, aluminum, carbon fiber, and other lightweight materials require specialized repair techniques.

• Electric and hybrid vehicles: EVs and hybrids have unique components (like battery systems and power electronics) that require specially trained technicians and equipment.

2. Labor Costs

• Technician shortages: There’s a growing shortage of skilled automotive technicians, especially those trained in EVs and diagnostics. This drives up wages, which gets passed on to consumers.

• Increased repair time: More complex diagnostics and procedures take longer, further increasing labor charges.

3. Parts Costs and Supply Chain Issues

• OEM parts: Many automakers restrict the use of aftermarket parts, pushing repairs toward more expensive original equipment manufacturer (OEM) parts.

• Global supply chain disruptions: COVID-19, geopolitical tensions, and raw material shortages have made auto parts more expensive and harder to source.

4. Inflation and Economic Pressures

• General inflation: The overall rise in prices across the economy has affected everything from parts to paint to shop rent and insurance.

• Insurance pressures: Insurers face higher claim costs and may increase premiums or reduce coverage, leading to higher out-of-pocket repair bills.

5. More Expensive Vehicles

• Cars themselves are more expensive than they used to be, so the cost to repair or replace components — especially cosmetic ones like bumpers with embedded sensors — increases accordingly.