By Mike Davey
San Diego, California — February 9, 2016 — Repairs cost more than they used to, but the reason why might surprise you. According to Greg Horn, Vice President of Industry Relations for Mitchell, the rising cost of parts has had the biggest overall impact on collision repair costs.
Horn digs into this in the latest edition of the Mitchell Industry Trends Report. In an article titled “The High Cost of High Tech,” Horn writes “I became curious, however, to see what drove the increase and if properly adjusting for inflation would affect the results.”
The types of vehicles on the road and hence coming in to collision centres changes over time, so Horn limited his study to two popular cars. This allowed him to measure changes such as parts costs and paint hours. The vehicles he chose were the Chevy Malibu and the Toyota Camry.
Horn then dug into the three major components of repair cost: labour, paint and parts. He used estimates for repairs to new Camrys and Malibus submitted in 2010, then at estimates created for new Malibus and Camrys in 2015.
After adjusting for inflation, he found that the differences in labour hours and paint and materials costs contributed slightly to the increase, but that parts costs represents the biggest part of that increase.
“In fact, of the $140 inflation adjusted difference in the Camry, $64 came from parts costs, with a 0.5 part increase in the average number of parts on the estimate,” Horn writes. “Of the Malibu’s $292 inflation adjusted increase, however, $246 came from parts, but with 0.4. fewer parts replaced.”
The latest Mitchell Industry Trends Report also includes Canada-specific statistics, observations and trends.
You can download a copy of the report at mitchell.com/Thought-Leadership/Industry-Trends-Reports. You can also check out the infographic below for more information.
