Car Repair Costs Continue To Climb

By Ed Fitzgerald March 10, 2023
A shortage of car repair technicians has deepened. The industry will stand 642,000 workers short of capacity by 2024. A shortage of car repair technicians has deepened. The industry will stand 642,000 workers short of capacity by 2024.

Supply-chain problems have boosted the cost of car repairs, according to a story by ABC News. Pat Clynes, a resident of Houston, Texas, told reporters that last July he was driving his Ford Explorer when the car suddenly failed to accelerate. Clynes thought the car was under warranty, so he took it to a Ford dealership. Weeks later, the dealership identified the problem as engine failure and said it would cost $10,000 to fix, due partly to pandemic-induced supply chain snags that made car parts more expensive, he said.

Making matters worse, Clynes said the company ultimately voided his warranty, determining the cause was maintenance-related, he said. Clynes decided to sell the car back to Ford last October for $8,000, less than a quarter of what he paid when he bought it used three years earlier. "It was crazy," Clynes told ABC News. "It just wore me down." Clynes is not the only car owner encountering high auto repair prices. Vehicle repair prices have jumped a staggering 23% over the last year, an inflation rate nearly four times higher than overall price increases, according to government data.

Mack Auto Repair, Mack Ave., Detroit, Mi. (image @ Cee Lippens)

The price hikes stem from a shortage of workers and car parts that has sent costs soaring for auto shops, industry experts said. Additionally, the rise of high-tech cars, equipped with features like rearview cameras and traffic sensors, has added cost to even routine repairs. "It's a perfect storm because everything is coming together at once," Tara Topel, the owner of Topel's Service Center, a car repair shop in Lake Mills, Wis., told ABC News. "The pandemic exacerbated what was already an issue."

The high prices can be traced back to pandemic-induced supply bottlenecks that made it harder to access many products, including essentials like gas and food.The pandemic also caused a shortage of workers, as mass layoffs at the outset of the pandemic decimated the workforce. Coronavirus fears and government bailouts slowed the return of some workers. In turn, companies raised wages to attract workers, passing along some of those costs to customers.

These supply shocks hit the auto repair industry immediately, but the worst effects took time to emerge as repair shops slowly exhausted inventory on hand, said Brian Moody, executive editor at Autotrader. "Manufacturing stopped or slowed down because of COVID restrictions or people didn't come to work or they couldn't find the right people," Moody told ABC News. "In 2022, we saw the delayed reaction where there isn't the same supply of stuff that there was."

Meanwhile, a shortage of car repair technicians has deepened. The industry will stand 642,000 workers short of capacity by 2024, a TechForce report showed."There's a scarcity of technicians," David Whiston, an auto industry analyst at Morningstar, told ABC News. "This was a problem before the pandemic and it just gets worse. "In 2016, there were 225 cars and trucks on the road for every active service bay; five years later, there were 246 cars and trucks per service bay, according to a study from industry outlet Aftermarket Matters.The lack of supply has coincided with another trend driving up repair prices: high-tech cars.

Brian Moody, executive editor at Autotrader.

Cars contain more sophisticated materials and features, such as cameras and sensors, said Autotrader’s Moody."Let's say someone has a 2020 model car and they back into a pole – something pretty simple," Moody said. "You have to replace the bumper. But in that bumper can be sensors that house blind-spot monitoring or rear-park alert. All of those live in the bumper. "Topel, the repair shop owner, said the company's prices have gone up as much as 20% over the last year. To attract workers amid the shortage, the company has raised hourly pay by $5 per hour over the past two years, which amounts to a 20% increase in the base pay for entry-level technicians, she said.

Meanwhile, the repair shop faces added costs as it purchases big-ticket items that allow it to fix high-tech cars, she said. The company recently spent $38,000 for a machine that allows for the calibration of advanced driver-assistance systems, a set of technologies that help drivers navigate. "More and more new technology comes into our shop," she said. "It becomes a bigger deal by the month."As repair prices rise, Topel notices customers opting for basic repairs rather than more comprehensive ones, she said, noting that customers and shops alike are trying to survive elevated costs."All of these I call opportunities, but they really are challenges for the industry in how we solve for them and how people will make it through," she said.

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Last modified on Sunday, 18 June 2023 16:51