Auto Repair Parts, Labor Costs Up Significantly

CCC Intelligent Solutions senior director and industry analyst Susanna Gotsch says the cost to replace auto parts increased 7.4% in 2021 over 2020, and increased by another 6% by mid-year 2022, according to statistics from CCC and the Bureau of Labor Statistics. According to a CRASH Network survey completed during the first quarter of 2021, 96% of shops surveyed said they were experiencing delays in the delivery of parts. Those figures rose to 98% and 97%, respectfully, for Q1 and Q2 2022.

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

“Higher cost parts combined with continued growth in the average number of parts needing replacement with growing vehicle complexity has been a key factor driving up repair costs over the last two years,” CCC reports.

Another problem r is the shortage of repair technicians as large segments of the workforce entire retirement, and the complexity of the work itself increases with ADAS technology and calibration. Gotsch says most repair shops reporting increased backlogs site the shortage of technicians as a primary factor. The Bureau of Labor Statistics projects a 4% decline in employment in the auto technician field through 2029.

That also means shops are competing for qualified technicians, resulting in higher labor costs. Average weekly labor costs were up 7.4% in the fourth quarter of 2021 as compared to the same time in 2020.

“With higher-cost vehicles, parts and labor, and not much if any reduction in claim counts, it’s likely our industry will continue to experience elevated loss costs for some time,” Gotsch says.

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