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Why Post-Accident Car Repairs Have Soared 36% Since 2018

  • July 3, 2023
1841 views
  • Car repairs in the aftermath of an accident have soared 36% since 2018 and may climb over $5,000 by the end of 2023
  • Expensive repairs result in higher auto insurance claims; average of $2,014 a year for full coverage
  • New cars, especially electric vehicles, have become more luxurious and complex, so auto parts and the work from certified EV mechanics make repairs more costly
  • average raw material costs for an EV totaled $8,255 per vehicle
  • $42,000 to repair an electric pickup truck this past February

High-tech features, a variety of sensors, and pampering amenities rule all new vehicles on the road these days. But all this comfort and luxury makes car repairs post-crash more and more expensive. On top of an already pricey sticker price to begin with. In fact, new cars under $30,000 make up just 8% of the market’s supply, down from 38% pre-pandemic according to car shopping app CoPilot. The average price for a new vehicle was $48,528 in May 2023.

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Expensive car repair, expensive insurance premiums

Car repairs in the aftermath of an accident have soared 36% since 2018 and may climb over $5,000 by the end of 2023, according to automotive repair software company Mitchell. The high cost of car repairs has contributed to the rise in auto insurance premiums. According to the Consumer Price Index, car insurance rates went up 14.7% from January 2022 to January 2023.

About 18% of gas cars involved in crashes are totaled, while only about 6% of battery-powered vehicles are unrepairable after accidents, according to Mitchell

Bankrate puts the average full-coverage auto insurance price at $2,014 a year. But some states rate much higher than the national average to insure drivers. Florida and New York insurance policies go for $3,183 and $3,139/year respectively. Louisiana drivers pay an average of $2,909/year for full coverage, 44% above the national average.

Electric vehicles are even more expensive to repair

New cars are made with safety in mind: for the driver, passengers, other motorists sharing the road, as well as pedestrians. Certain materials are made to crumble fast in case of a car accident, and may be impossible to repair. Other times, even when certain parts of the vehicle aren’t affected, they have to be replaced because of embedded sensors or recalibration. Bumper damage may lead to an overhaul, not just a tiny repair job. Today’s car technology means automotive systems are affected beyond the point of impact.

New cars, especially electric vehicles, have become more luxurious and complex, so auto parts and the work from certified EV mechanics make repairs more costly. According to AlixPartners, the average raw material costs for an EV totaled $8,255 per vehicle as of May 2022, up 144% from $3,381 in March 2020. Raw materials include cobalt, nickel and lithium, all essential to producing electric vehicle batteries.

Ford Motor has 2,800 North American dealers equipped to repair its electric vehicles

$42,000 to repair an electric pickup

Back in February 2023, a registered  pickup truck (Rivian R1T) was rear-ended by a Lexus in Ohio. To fix the bumper at a Rivian-certified repair shop was $42,000! Why? A sleek panel extending from the pickup’s rear to front roof pillars was damaged. Repairing and repainting it included removing the interior ceiling material, aka the headliner, and front windshield too.

Data from Mitchell reveals that in 2022 electric vehicles cost about $6,800 on average to fix after accidents, about $2,400 more than the average for all cars. EVs tend to have more expensive parts, require more time, and work by electric vehicle specialists. A damaged EV battery pack requires special tools and advanced training. Also, most EVs are luxury models so it makes sense that repairing them is costlier.

Rivian has certified about 200 North American collision shops.

 

 

Related Topics
  • electric vehicle
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