Auto repair parts, labor costs rise dramatically

Susanna Gotsch, senior director of CCC Intelligent Solutions and industry analyst, says auto parts replacement cost increased 7.4% in 2021 compared to 2020 and another 6% by mid-year 2022, according to statistics from CCC and the Bureau of Labor Statistics. According to a CRASH Network survey conducted during the first quarter of 2021, 96% of stores surveyed reported experiencing delays in parts delivery. These figures increased to 98% and 97%, respectively, for the first and second quarters of 2022.

Susanna Gotsch of CCC Intelligent Solutions says the industry will continue to experience high loss costs for “some time”.

“The higher cost of parts, combined with the continued growth in the average number of parts to be replaced with the increasing complexity of vehicles, has been a key factor driving up repair costs over the past two years,” reports CCC. .

Another issue is the shortage of repair technicians as large segments of the workforce retire, and the complexity of the job itself increases with ADAS technology and calibration. Gotsch says most repair shops reporting an increase in backlogs see a shortage of technicians as a primary factor. The Bureau of Labor Statistics predicts a 4% decline in employment in the field of automotive technicians through 2029.

It also means that shops compete for qualified technicians, which leads to higher labor costs. Average weekly labor costs increased by 7.4% in the fourth quarter of 2021 compared to the same period in 2020.

“With more expensive vehicles, parts and labor, and little or no reduction in claims, our industry is likely to continue to experience high loss costs for some time to come,” says Gotsch.

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Alejandro L. Myatt