If you’ve had to make an auto claim recently, you may have noticed your car took longer than anticipated to fix. Maybe you struggled through impatience as you were told multiple times that, unfortunately, your car is still not ready. However, if it’s any consolation, it’s not just you! In fact, we now know that claims are taking almost five days longer, on average, to close than they were at this time in 2019.
Industry-wide, there has been a gradual shift in how long it takes to repair vehicles and how much it costs to fix them. Across the country, people are feeling the pressure.
Why? There are several reasons:
Supply chain shortages. Due to the upheaval of life in general across the world during the COVID era, it’s still harder to get access to certain parts. Auto body shops and other businesses are waiting extraordinarily long times to get even the most common parts. This pressure is felt globally as factories run with smaller crews (and for periods, have been shut down entirely) and global shipping and transportation has been delayed and/or interrupted with truck driver shortages and port backlogs.
Inflation. We’re currently in a period of inflation, with the cost of auto repair seeing its largest increase since 1974. According to the Department of Labor, motor vehicle parts and equipment are up nearly 15% across the U.S. from last year. Year over year, we also know that the cost of many everyday goods and services — outside of the automotive repair industry — is almost 9% higher than it was at this time last year. Gas has gone up nearly 50% since summer of 2021.
Staffing issues. In many industries nationwide and beyond, businesses have fewer workers than they’ve had previously which in turn makes each repair take a little bit longer. With fewer “hands on deck,” consumers are running into longer repair times. Since the pandemic we have witnessed a phenomenon nicknamed “The Great Resignation,” during which we saw a large increase in retirements and resignations, especially in industries such as service, transportation and the trades (in fact, we saw the highest number of resignations in 2021 than we’d seen in more than two decades!). According to a 2022 industry trade report, a “wave of retiring baby boomers will create 100,000 auto technician job openings over the next decade, with the Bureau of Labor Statistics projecting a 4% decline in employment in the overall auto technician field through 2029.”
Number of accidents rising again. During 2020 and much of 2021, people were driving a lot less due to stay-at-home orders, a massive increase in working from home, and a general cultural shift that led to fewer people on the roads. We saw a decrease in driving-related accidents. However, people have recently begun to “make up for lost time,” and we’re seeing the rate of accidents increase. Only now, repairs are taking longer and costing more than ever. It makes for a perfect storm that leaves many motorists, auto technicians — and even insurance carriers — challenged.
Of course, this leaves most of us wondering “How does this affect me?” and “What will happen if I’m in an auto accident?” If you’re in an accident and need to make a claim, we’re committed to getting you back on the road as soon as possible. Remember that you can report a claim 24 hours a day, seven days a week. If you have any questions about your premium, your coverage, or what to do if you’re in a collision, contact your local CPW Insurance