Because inflation affects our day-to-day lives, worrying about inflation affecting car repairs is understandable. As of August 2023, car maintenance prices had increased 23% over the previous year. There are many reasons for this, including a shortage of workers and car parts. Also, because the technology on cars has advanced, repairs to the high-tech features can add costs to routine maintenance. [1]
Inflation’s impact on car parts
Though the rate of inflation on car parts has begun to slow, as of January 2023, the Consumer Price Index (CPI) of car parts had risen a bit more than 8% vs the previous January. [2] This is partly due to supply chain issues and labor shortages leading to an overall shortage of parts.
Tire prices
The tire industry has seen some rising prices due to the cost of raw materials and logistics. The average price of tires has risen about 20% in the last two years. That rate is more than 70% greater than the core inflation rate. [3]
How labor shortages impact the cost of vehicle repairs
There are various reasons for the current labor shortage, including a low workforce participation rate (62.1%), increasing retirement rates, shifts to a 1-income household and an increasing number of nontraditional jobs and self-employment. [4] Additionally, there’s a shortage of technicians due to younger generations’ disinterest in the field. [5]
Supply chain impact on car repairs
In a 2021 study, 85% of independent auto repair shops reported that it was taking longer than usual to complete vehicle services or repairs. On average, it was reported that the vehicle turnaround time was a day and a half longer than usual. [6]
Regular maintenance to hedge inflated repair costs
To ease the burden of inflated car repair prices, here are the top things to do:
- Establish and follow a maintenance schedule: Getting maintenance repairs regularly helps prevent issues from turning into majorly expensive ones down the road.
- Check your engine and exhaust components every so often: When necessary components are cleaned and repaired as needed, this helps avoid a higher price tag.
- Make sure to get essential repairs: Identifying issues that can be addressed before they escalate helps avoid inflation-related car costs. [6b]
Inflation’s impact on your insurance costs
Because of rising inflation and increased accident frequency, insurance companies are raising policyholders’ rates to pay the claims for these higher expenses. Insurance companies also look at multiple factors when determining your insurance premium, including the number of claims and costs of repairing your vehicle or home. If those costs increase, it’s possible that the insurance premiums will increase.
To save on your insurance, make sure to check for any discounts you could qualify for, maintain a good driving record, and explore the various payment options. It’s important to review your auto insurance during times of inflation to make sure your coverage remains adequate. [7]
Sources:
[1] “Car repair prices are rising much faster than overall inflation. Here’s why.” Max Zahn, abcnews.go.com/Business/car-repair-prices-rising-faster-inflation/story (accessed March 9, 2023).
[2] “ Auto Parts Inflation Slowing Down,” aftermarketnews.com/auto-parts-inflation-slowing-down/ (accessed November 10, 2023).
[3] “Overinflated: The Journey of a Humble Tire Reveals Why Prices Are Still So High,” Michael Grabell, propublica.org/article/inflation-tires-rubber-imports-high-prices (accessed May 3, 2023).
[4] “How millions of missing workers are making do without a job,” Max Zahn, abcnews.go.com/Business/millions-missing-workers-making-job/story (Dec. 8, 2022).
[5] “Technician Shortage—Why It Exists & What Needs to Change,” wrenchway.com/blog/technician-shortage-why-it-exists-what-needs-to-change (accessed July 12, 2023).
[6] “Effects of Supply Chain Disruptions on Independent Automotive Repair Shops,” IMR Inc., automotiveresearch.com/insights/effects-supply-chain-disruptions-automotive-repair-shops (accessed July 12, 2023).
[6b] “3 Tips to Avoid Car Inflation,” repairsmith.com/blog/3-tips-to-avoid-car-inflation (accessed July 12, 2023).
[7] “Is record inflation leaving you underinsured?” Cate Deventer and Maggie Kempken, bankrate.com/insurance/car/inflation-may-be-leaving-you-underinsured (accessed Nov. 28, 2022).
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