The cost of repairing accident-damaged motor vehicles has surged in recent years, presenting challenges for motor insurers and associated industries.
A partnership between AAMC and Finity analysed over 80,000 motor accident repairs to identify some of the key drivers behind repair cost inflation.
In this article, we’ll walk you through exactly why average car repairs are costing so much more.
Technology Advancements: A Major Factor
A major factor contributing to car repair cost inflation is the vastly upgraded technology inherent within a modern motor vehicle.
So many motor vehicles now come with exciting, upgraded equipment and systems. These systems are improving driver safety and aim to reduce the likelihood of accidents. However, common car repairs are now slightly more complex.
Advanced Driver Assistance Systems (ADAS) and other safety systems are now an integral component of a motor vehicle. But now, these components, which are mounted in vulnerable positions within the vehicle and therefore susceptible to damage in even minor impacts, often require replacement rather than repair.
It’s just one aspect that can mean costly repairs for motorists.
Parts Play a Big Part in Car Repair Cost
Any motorist would have noticed a rise in the average car service cost. The rising cost of parts is just one reason maintenance costs are increasing. It’s the same for car repairs.
Most accident replacement parts have experienced price increases. Some components, however, and particularly those most commonly damaged in collisions, have seen a greater level of part inflation. Some of this can be attributed to technological advancements in components such as headlamps and windscreens. Where previously, a windscreen was simply a glass panel and a headlamp just a bulb, today windscreens are fit with sensors and headlamps’ adjustment capabilities mean these come with greater levels of complexity.
Technological advancements in vehicle safety technology mean parts are more costly, not to mention the labour associated with fitting them correctly.
Inflation Disparities by Vehicle Model and Make
Repair cost inflation is not at a consistent rate across all vehicle makes and types. Certain vehicle models have shown higher rates of repair cost inflation compared to others, and the design and construction of some vehicle types can also contribute to higher repair costs.
Car Insurance & the Rising Cost of Repairs
How can car insurers mitigate the effects that come with the rapid advancements of motor vehicles and the associated cost inflation?
One answer is to identify and choose repair facilities that are knowledgeable and skilled across these technical advancements across a variety of car manufacturers’ specifications. As modern vehicles continue to see these advancements, it will be important for insurers to invest in trusted professional technicians who invest in skills development, new repair technologies and the latest equipment that mitigates the need to always replace damaged parts with new ones.
By creating a more dynamic range of repairers and specialist suppliers, staying up to date with advancements in repair capability on expensive components, and incentivising partnered repairers to improve continually, insurers can navigate some of the factors contributing to repair cost inflation.
At AAMC, we’re invested in supporting our insurance partners to find the very best repairers for their clients. Speak with us to learn about how we can support you to mitigate costs.
