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Why Are Auto Repair Costs Rising?

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Why Are Auto Repair Costs Rising?

Working in the fleet industry has been a significant challenge since the pandemic. The cost of vehicle maintenance spiked during this time, and hasn’t decreased since. However, the fact that fleets rely on routine maintenance and the availability of critical auto repair parts hasn’t changed. Before we can figure out a solution to this problem, we must first understand why the problem exists in the first place. Let’s explore why auto repair costs are on the rise. 

Top Three Reasons for Rising Prices

While the spike became most apparent during the pandemic, it isn’t the only reason for the increase. In this list, you’ll find a variety of reasons for  the rising prices of auto repair costs. We’ve broken these reasons down into three major causes. 

No. 1: Pandemic Shortages

Of course, we do need to start with the pandemic. The pandemic affected auto repair in a few ways:

Semi-conductor chips: One of the worst shortages during the pandemic was for semi-conductor chips. These chips are needed to operate newer vehicles. This has created a domino effect: fewer new vehicles are on the market, so drivers are purchasing used vehicles or keeping their vehicles longer than they otherwise would. Used and older vehicles need more parts and repairs, causing an increased need for parts and repairs.

Supply-Chain Backups: Semi-conductor chips weren’t the only item that suffered depletion. Shipping times for all kinds of car parts have lengthened significantly. This isn’t necessarily because the parts aren’t available. It’s because there isn’t enough space on container and cargo ships to carry them. When they finally arrive, there aren’t enough people to unload them due to labor shortages. This labor shortage also means there aren’t enough delivery drivers to get them to the repair facilities where they will be used.

Labor Shortage: You’ve already seen how the labor shortage slows things down. But there’s also a shortage of skilled mechanics, especially those who can work on newer vehicles. That means even simple repair processes now take a lot longer. 

No. 2: Long-Lasting Cars

At a glance, this seems like a good thing. And overall, it is! When your vehicles last longer, that saves your fleet money and creates less of a negative impact on our environment. Twenty-five years ago, the average vehicle was 8.4 years old. Nowadays, the average vehicle is 12.1 years old. 

However, longer-lasting cars need more repairs and parts. And because technology is advancing, these parts are often more specialized and less interchangeable. In the end, it means that repairs are often more expensive.

No. 3: Technological Advances

We’ve already discussed how technological advances have made repairs more expensive. While technology, overall, has made vehicles more fuel efficient, safe, and comfortable, it’s also made repairs more challenging.  Some technology you may find standard on new cars includes backup cameras, anti-lock brakes, and blind-spot detection sensors. These are called ADAS, or Advanced Driver Assistance Systems, and the sensors used to make them work are pretty fragile. They also require a trained technician to replace them, as special instruments are necessary. 

What Can We Do About Rising Costs?

Our next article, “How to Maintain Fleet Vehicles in Light of Rising Costs,” will break down in more detail how you can still save money on fleet maintenance, despite the rising costs we see in today’s environment. We will show you how Azuga’s fleet management technology can support you in your endeavors to save money while supporting your fleet’s safety and efficiency needs.