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Why has car repair become so expensive?

New cars and trucks are packed with sensors and technology that protect and pamper drivers and passengers. But those features are also increasing the cost of repairs after accidents.

According to Mitchell, a company that provides data and software to insurance companies and auto repair businesses, the average cost of restoring damaged cars to like-new has risen 36 percent since 2018, and could exceed $5,000 by the end of this year . This huge increase is the main reason insurance premiums are rising – up 17 per cent in the 12 months to May.

New sport utility vehicles and pickup trucks, including a rapidly growing number of electric models, have become so complex and luxurious that seemingly simple repairs can cost little, auto experts say. Insurers are often at loggerheads for most of those costs, which causes them to raise their rates.

For example, it may be difficult or impossible to repair a material designed to dislodge or deform in a crash in order to protect pedestrians or passengers. Many bumpers must be replaced after a low-speed fault because the safety sensors in them may not function properly after repair. Other systems, even some that do not appear to be damaged, should be inspected or recalibrated.

“Modern digital architecture is so advanced that systems beyond the impact point are being disrupted,” said Ryan Mandel, Mitchell’s director of claims performance. “Getting a car back to pre-damage condition is harder than at any other time in history, and it will become more challenging.”

Industry experts are particularly focusing on the cost of repairs for electric cars and trucks, which are not built like gasoline cars and have different parts. Furthermore, many mechanics are not trained to work on them. In recent months, news reports and stories shared on social media about astronomical repair bills for electric cars and trucks have caught the attention of car enthusiasts.

Consider the case of Chris Apfelstadt and his Rivian R1T pickup truck, which was hit from behind by a Lexus at a stoplight in Columbus, Ohio, in February while he was driving and his infant son was in the back seat.

The damage was initially deemed relatively minor, and the other driver’s insurer offered him $1,600. The actual cost of fixing the bumper at a certified business to repair Rivian vehicles—one of only three in Ohio—was $42,000, about half the truck’s selling price.

“I expected it to be expensive,” said Mr. Apfelstedt, owner of the lighting company, “but it was still a shocking number.”

One major reason is that the crash damaged a smooth panel that ran from the rear of the truck to the front roof pillars. A very expensive repair and repaint followed, including the removal of the interior roofing material, known as the headliner, and the front windshield.

Part of the cost was probably also related to Rivian’s small size and youth. Like other auto start-ups, the company, which is based in Irvine, California, and is slated to deliver its first vehicles to customers in 2021, does not sell through franchised dealers and has had to build an independent repair network from scratch.

Ford Motor has 2,800 North American dealers equipped to repair its electric vehicles, as well as a vast network of independent shops and aftermarket suppliers. Rivian has certified approximately 200 North American collision shops.

“It’s a challenge that we’re new to the market,” said Noe Mejia, Rivian’s vice president of service operations. But, he adds, Rivian’s smaller scale and lack of bureaucracy allows it to work directly with customers and shops to ensure repairs meet high standards.

Mr. Apfelstadt’s story was discussed extensively on the Internet. For some, articles like his, and harrowing stories of cars destroyed after minor accidents shared online by some owners of Tesla cars, have become cautionary tales about the financial dangers of owning electric cars.

Auto experts acknowledge that repairing electric models is, on average, more expensive than repairing gasoline vehicles. But a full analysis of claims and repair data shows that the cost of repairing an electric vehicle is no more than the cost of gasoline cars of similar age and price, and sometimes they are even less.

“The idea that EVs are being perfected left and right is a horror story that keeps insurers awake at night,” Mr. Mandel said. “Has this happened? Yes. But the incidents are very few.”

Mitchell’s data shows that it will cost an average of about $6,800 to repair electric vehicles after accidents in 2022, about $2,400 more than the average for all cars. The company said battery-powered cars require more expensive parts and repairs that take longer and may require work by specialist mechanics.

But at first glance, a big reason why the repair cost of electric cars is high is that most of them are new luxury models. Tesla cars, which sell for between $40,000 and nearly $110,000, account for 75 percent of collision claims for battery-powered models.

According to Mitchell, fixing up electric vehicles from mainstream brands like Hyundai or Nissan only costs about $800 more than their gasoline counterparts. And in the premium segment, typical repair costs for battery-powered and gasoline vehicles for model years 2018 and beyond are roughly the same, around $7,000.

Other data shows that electric vehicles perform relatively well. According to Mitchell, about 18 percent of gasoline cars involved in accidents end up in crashes, while only 6 percent of battery-powered vehicles are considered beyond repair after accidents.

Matt Moore, senior vice president of the Highway Loss Data Institute, a research organization serving the insurance industry, said insurance and repair data undermine the idea that battery or electric technology drives huge repair costs. According to the institute’s analysis, of the 11 models that are available in gasoline and electric versions — including the Hyundai Kona and Volvo XC40 — repair costs for electric models are only 2 percent higher.

Gasoline or electric, Mr. Moore said, more expensive, rarer and higher-performance cars are involved in fewer but more serious crashes, partly because they are more likely to be driven by people who are going faster and at other risks. Let’s pick up

“They hit fast and hit hard,” he said. “Every collision is a mix of man and machine.”

But auto experts said damage to electric cars’ battery packs — their most expensive part — could make them difficult to repair, requiring specialized tools and advanced training.

“At the moment, if there is any serious damage to the pack, no one is keen to fix it,” said Sandy Munro, an engineer and consultant who hosts a popular YouTube show on which he discusses Tesla CEO Elon Musk has been interviewed. , and others in the auto industry.

Automakers say they are aware of rising repair costs and are working to make it easier to fix cars, especially electric vehicles, which many executives expect to replace most or all gasoline models in the coming decades. Are.

BMW has equipped its electric vehicles with sensors that provide data on the direction and intensity of crash-forces. That information can guide technicians as to which battery module needs to be replaced. Ford made it so that its dealers could replace the Mustang Mach-E’s damaged battery tray and replace all the components in a new tray. General Motors is developing a process that will allow dealers to repair and replace packs, including damaged individual battery modules.

Even though repair costs are rising, Mr. Munro emphasized that newer cars offer significant advantages over older vehicles. They can absorb terrible crash forces and let the occupants get away. Or they avoid collisions altogether, using the same cameras and sensors that make repairs difficult.

He said, “I don’t care if nobody dies but we can’t fix that bumper.” “It is only scrap iron. The focus is rightly on the people inside and the efficiency of the car.

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