I spoke with someone at the Ford dealership. Repair costs and parts availability, or a new replacement vehicle, for my truck have not risen by a large percentage. There may be exception in sectors of the vehicle market.?
I understand inflation and rising prices, but not 40% in such a short time span.
We live in a "Monkey see, Monkey do" corporate world. Whenever Democrats control the helm, everybody raises prices.
Because they can. It always seems to be far and above the inflation rates.
Prior to the current liar in chief taking office, annual insurance rate hikes varied between 4-6%.
The insurance industry is just a big cartel, that are all in it together.
If I was a wealthy man, I would self insure, and tell them all to go pound sand.
Repair costs are rising relative to the overall rate of inflation. Motor vehicle maintenance and repair costs increased 4.1% per year from November 2013 to November 2023,
compared with just 2.8% for the overall consumer price index.
The pandemic also drove up the cost of parts. Shipping disruptions contributed to the increase.
In 2022, the cost of parts sourced from automakers rose 10%, and aftermarket parts rose 17%, compared with the usual annual inflation rate of 0% to 4%.
The cost of vehicle repairs is hard to ignore. Overall inflation, as measured by the consumer price index, slowed to 3.7 percent over the year in August—down from its 9 percent peak in 2022. The cost for vehicle repairs, however, had risen 17 percent, and the cost of maintenance, such as an oil change, was up 9 percent over the same period (Figure 1).
These heightened costs have added pressure to vehicle owners who have already had to deal with widespread inflation in other related expenses, such as gas and insurance. As the auto repair industry continues to adapt to new challenges in an evolving economy, it’s unclear when these cost increases might begin to ease.
Why are costs so high? (Source, MN Federal Reserve Bank)
A combination of long-term factors and recent shocks to the economy have contributed to the jump in auto repair and maintenance costs today. For one, supply chain disruptions and production constraints during the pandemic dramatically
limited the supply of new vehicles entering the market, creating a cascade of problems for the industry.
With new cars in short supply, they also became much more expensive. As a result,
used car sales skyrocketed after 2020, and more people held on to their existing cars, which led to
a record high for the average age of vehicles on the road this year.
Older cars often
need more repairs, so higher demand for repair services followed, according to Linden Wicklund, executive director of the Alliance of Automotive Service Providers of Minnesota.
Given the high cost of a new vehicle today, people have found that “financially, it makes more sense to do enormous repairs on their existing cars that they wouldn’t have thought about previously,” said Wicklund. Increased technology in cars over the last decade is another compounding factor, she added. “Cars these days are rolling computers. If you're fixing something that’s more complex, they’re going to need to keep it in the shop for longer, which gets more expensive.”
Amid higher demand for repairs, supply chain disruptions during the pandemic also made finding vehicle parts a
major challenge for repair shops. And with more people buying or holding on to used cars, “there are not enough used cars entering the salvage market where repairers get used parts, so then you do end up with more part shortages,” Wicklund explained.
On top of those disruptions, the auto repair industry has not been spared from tight labor market conditions in recent years. Across the Ninth District, employment in automotive technician and service occupations declined 2 percent between 2019 and 2022, according to
government data, even as demand for these services increased.
“Employee shortages are affecting our ability to take on more work,” commented the South Dakota auto repair shop owner. “We are taking less appointments this year due to lack of help.”
An aging workforce and typically lower pay for new hires relative to other trades is partially to blame, according to Wicklund. “A lot of shops say they are losing employees to industries that pay better at the start,” she explained. “So, some shops are giving very large raises to try to keep employees. Some will up their prices to customers and give most of the increase back to their employees.”
nypost.com
