The reasons behind soaring repair prices: OEM materials, technicians, vehicle types & more – Repairer Driven News

September 13, 2022 by No Comments

The reasons behind soaring repair prices: OEM materials, technicians, vehicle types & more

By Lurah Lowery
on September 13, 2022
Collision Repair | Market Trends

Every body shop has likely been feeling the force of inflationary pressures and increased repair costs but what exactly are the trends causing the uptick in costs?

In recent conversations with CCC Intelligent Solutions and Mitchell International, Repairer Driven News found that it’s not just the obvious factors such as parts shortages and supply chain hiccups. Mitchell International Claims Performance Director Ryan Mandell said overarching trends include reduced repairability of major component panels, increased vehicle complexity, a shift in the car parc toward more luxury vehicles, trucks and SUVs — all of which are more expensive to repair — and a gradual shift toward higher OEM parts utilization and higher labor rates.

Some of the component panels that can’t be repaired include fenders, doors, hoods, and deck lids because they’re constructed of lighter-weight materials and “do not respond to a crash the same way that traditional mild steel does,” Mandell said.

“In many cases, the damage on lighter-weight panels is more severe which results in a higher rate of replacement,” he said. “Additionally, bumper covers that have radar sensors mounted behind them may not be deemed repairable (regardless of the extent of damage) by the OEM as there are potential concerns with the application of body filler that may disrupt the functionality of the radar sensors.”

Mandell noted that “2022 numbers are far from fully mature,” and said he expects all of the numbers he provided, except for repair percent of total labor, to be higher by year-end, especially since Q4 is typically the highest severity quarter every year, he said.

As for the complexity of vehicle repairs, Mandell said the increasing trend toward lightweighting is one example of how repairs can be more difficult. “Additionally though, the presence of ADAS is becoming near-ubiquitous on newer model vehicles meaning that diagnostics are now a compulsory component of collision repairs and ADAS calibrations are becoming a more frequent operation as well.”

Three-stage paint jobs are also a factor as their frequency of use by OEMs has increased over the last five years. “Over 10% of repairable estimates are for 3-Stage painted vehicles, which can add roughly 6-8% to the overall repair cost,” Mandell said.

Also over the last five years, OEMs have increasingly been patenting and branding their parts making the manufacture of aftermarket parts impossible, especially ADAS sensors and cameras, which are almost completely sold only by OEMs, according to Mandell.

In CCC Intelligent Solutions’ latest “CCC Trends” report, released in August, Insights & Analytics Senior Director Susanna Gotsch covers factors that are contributing to the increase in repair costs, with replacement part costs being one of them. That cost rose by 7.4% from 2020 to 2021 and another 6% from last year to June 2022, according to Gotsch.

“Many industries, like the automotive industry, had moved to a ‘just in time’ inventory system prior to the pandemic,” Gotsch said in CCC’s August Trends video. “An approach that has been sorely tested over the last two years with surging customer demand and recovering auto accident and claim counts. Inventories have been drawn down from plants being closed at the outset of COVID and have operated at lower levels of production …….

Source: https://www.repairerdrivennews.com/2022/09/13/the-reasons-behind-soaring-repair-prices-oem-materials-technicians-vehicle-types-more/

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