Rising Prices of Car Repairs - What are your options?
There are a number of different factors that influence the price of car repairs. Several other industries such as steel manufacturing and shipping from factories overseas have an effect on the cost of car parts. While the availability of professionals with the skills to repair certain cars is also on the decline.
Where does that leave the consumer, the driver, or the car owner? Let’s dive into the automotive market to find out more about the rising prices of car repairs and what options are available to people who rely on their cars as a main form of transportation.
Why are Car Repair Costs so High?
To answer this question we need to take into consideration all the different areas that influence the cost of parts and labor involved in car repairs. Cars are not what they used to be either. Modern-day cars are governed by electrical components that require specialized skills to be able to repair. So, if you think that car ownership was already on the pricey side you may need to know this information.
The steel industry has felt the impact of the global disruption in terms of trade, economy, and resource availability. The automotive and construction segments are the largest parts of the market. Both use a serious amount of steel in the end-user, or finished steel, products.
Regulations on steel production have also played a role in altering the course of steel manufacturing costs. Already prior to the global pandemic, the industry was facing a significant decline in production and was not quite able to meet the demand. During the pandemic, the market suffered from supply chain issues coupled with a temporary down in demand for steel.
Now that the pandemic is over, the demand has skyrocketed and supply chains are still an issue. The industry is not equipped to manage such high demands. That means there are shortages across the board, affecting the automotive and construction markets most severely.
Once the pandemic hit it was as though the nails were being smacked right into the coffin for the automotive industry. In combination with a lack of much-needed chips for newer vehicles, there was little relief from the increasing challenges the market is facing.
Continued lockdowns meant that fewer people were on the road and fewer people relying on vehicles to get to work or school. As such the demand for newer vehicles was also lower than usual. While used cars were increasing in demand, over time also increased in value. Following that there was a shift in the market.
Car owners started keeping cars for longer periods of time and those buying looked for pre-owned cars to repair. And by keeping the cars, more expensive repairs were done that typically would have been ignored. Putting a strain on the car parts market. Just a few years ago the average age of a vehicle on the road was 9.4 years old, whereas now we are talking about 12.5 years old. Car parts went up by around 6% last year alone. It would seem that this trend is going to continue into 2023.
Dealerships have found themselves dealing with an increase of about 10% in car repair costs. Taking the cost of car parts to a four-decade high has put quite the strain on the American people. The balance in the automotive industry is now off, between the spending power of drivers going down and the challenges of getting the resources to manufacture vehicles.
What Do Car Repair Costs Look Like Now?
In a report by CarMD.com, they found that the most common car repair is the replacement of the catalytic converter. The catalytic converter is responsible for controlling emissions from the exhaust system. The average cost to repair this part of your car is $1,356. I would say that is a substantial amount of money to have available for car repairs for the average American.
Being such an important part of the vehicle, there is a federally mandated warranty for 80,000 miles for new cars that are purchased. Once you are past those 80,000 miles though it is all up to you to take care of the costs of car repairs. Along with an increase in catalytic converter thefts, due to precious metals, the price has been driven up quite a bit. Over the past year, dealerships and repair shops have seen spending go up to $2,500 or even all the way to $5,000 for car repairs to keep an older vehicle running. Which is likely what you can expect to spend for major repairs.
What are Your Options?
The best advice is to make sure you take good care of your vehicle. Even when it feels like you could save by skipping maintenance or not having the car washed, it is important to get it done. If you do not do maintenance you could void your warranty and you may have a small issue that leads to a big issue. Something you may have to pay out of pocket if maintenance has not been done.
Having a car in good condition will keep repair costs down and you will have a reliable vehicle for years to come. Newer cars have the capability of being driven for over 200,000 miles with few issues. It is all about keeping your car running smoothly and clean. A clean car will reduce the risk of exposing the metal under the paint. In turn, lowering the risk of getting rust on the body panels of the vehicle.
Now, the next best thing is to make sure that your vehicle is covered for mechanical failures. If you are car is fairly new you may still be under warranty. You can check this with the manufacturer dealership. Should you find that you are out of warranty, you may want to consider taking out coverage in order to ensure that you will be protected when you have to deal with a mechanical breakdown.
One way of going about this is an extended car warranty from your vehicle manufacturer. Some manufacturers offer an extended warranty that can be purchased towards the end of the original warranty period. This may be an option for people who have bought a certified pre-owned car.
The other way to get affordable coverage is with a vehicle service contract. These types of plans offer coverage for specified parts in the event of a mechanical breakdown. This type of coverage is particularly great for slightly older vehicles and newly purchased used cars as they are not reliant on the manufacturer. Have a look at our F-150 quote comparison for more details on how these plans work and could save you money.
What is Covered Under a Vehicle Service Contract?
These basic plans are there to cover the powertrain of your vehicle. The powertrain includes the power source and drivetrain. Having these parts covered under a powertrain warranty will ensure that parts and labor are covered in the event of a breakdown. Here is what is covered under the standard powertrain warranty plans:
- Drive axles
- Transfer case
Other powertrain plans, such as powertrain plus, offer coverage for extra components which may include:
- Starter motor
- Condenser (AC)
- Compressor (AC)
- Starter solenoid
Most Comprehensive Plans
For total mechanical coverage, you will likely look at the most comprehensive, often called a bumper-to-bumper or exclusionary plan. They offer cover for all your mechanical components plus a few extra non-critical parts. It is often much easier to simply describe what is not covered versus what is covered. Here is a list of what is generally NOT covered under these plans:
- Wiper Blades
- Brake Pads
- Body Panels
- Interior Trims
- Turn Signals
- Brake Lights
- Regular Maintenance
- Accidental Damage
Extended auto protection for your vehicle is designed to alleviate the stress of having the car repair bills occurring under unforeseen circumstances. Taking into account that mechanical issues do tend to happen in an unpredictable way it may be beneficial to shop around for an extended car warranty or vehicle service contract that will suit your needs.
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