The cost of car repairs is increasing. Here's the explanation.

Your car repair bill is becoming increasingly expensive, despite your best efforts to maintain it.

Numerous factors are driving up costs, including the use of heavier and more complex vehicles, the adoption of new materials and manufacturing techniques, a shortage of skilled technicians, and supply chain disruptions caused by the pandemic.

David Goldsmith, owner of Urban Classics, a repair shop in New York City, stated that customers are experiencing sticker shock.

The cost of repairing motor vehicles is increasing at a faster rate than the overall inflation rate. From November 2013 to November 2023, motor vehicle repair costs rose by 4.1%, while the overall consumer price index only increased by 2.8%.

Since the pandemic, repair costs have increased at a rate of around 10%, according to Mitchell, which provides software for the collision repair and auto insurance industries. Prior to the pandemic, the annual rate of increase was between 3.5% and 5%.

The problem is mysterious.

According to Matt Moore, senior vice president of the Highway Loss Data Institute, at the Insurance Institute for Highway Safety, the only thing that can be said for certain is that the cost of collision insurance claims is increasing. Beyond that, the reasons for this increase are unclear.

Repairs for vehicles could become more costly, while crashes could potentially result in more severe damage.

In 2022, cars were 33% heavier and twice as powerful as in 1985, according to HLDI. However, speeding and traffic crashes have also increased.

Heavier vehicles colliding at higher speeds means worse crashes.

As safety technology improves, the frequency of low-speed crashes, which are typically less severe and less expensive, is decreasing.

The more stuff cars are filled with, the more potential problems can arise. While nearly 20% of cars now have turbochargers, which boost power and efficiency, two-thirds of vehicles have all-wheel drive systems, a significant increase from the 10% in the 1980s. However, all these modifications increase the likelihood of equipment failure.

New manufacturing methods have resulted in fewer car parts, but the ones they have are large and expensive to replace. Lightweight materials such as aluminum are gaining popularity, but they can be fragile and need to be replaced.

Changes don’t stop there.

Goldsmith stated that a typical car today functions as a mobile network of computers.

The development of computerization in cars has been gradual for many years, but it has undergone a "dramatic" transformation in the past decade, according to Ryan Mandell, director of performance consulting at Mitchell.

Mandell stated that you can experience the same type of accident as before, but now, there are three extra sensors on the affected part of the vehicle that may need to be replaced.

The shortage of talent to repair cars has been worsened by the Covid-19 pandemic.

According to Mitchell, the average labor rate for repairs in the U.S. was under $50 an hour in 2019. By the end of 2023, it had increased to nearly $60 an hour. The majority of these increases occurred in 2022 and 2023.

With reduced driving due to the Covid pandemic, the demand for repairs declined, causing technicians to leave the industry in search of alternative employment opportunities.

The increase in the cost of parts during the pandemic was due to shipping disruptions.

In 2022, the cost of automaker-sourced parts increased by 10%, while aftermarket parts saw a 17% increase, exceeding the typical annual inflation rate of 0% to 4%.

The auto industry is undergoing its largest transformation in a century, moving from gasoline to electric and from mechanical to digital, and many believe that costs cannot continue to rise at these rates.

To make cars affordable, they must also be affordable to maintain, repair, and sell, according to Alan Amici, president and CEO of the Center for Automotive Research.

Watch the video to learn more.