Twenty-five years ago, the average new car retailed for just under $20,000. In 2021, new car prices soared almost 20% to top $45,000. This surge was driven by COVID’s impact on parts, electronics, consumer demand, price gouging and factory shuttering. The part shortages and the price increases for new automobiles have spiked the price of used cars as well. It has wreaked havoc with collision repair scheduling and costs. Still, consumers have embraced “it’s cheaper to keep (their car) than replace” as evidenced by the average age of light vehicles in the US increasing to an all-time high of 12.2 years. It is the 5th straight year of average car age increase in the country.
During the first 15 years of the past quarter century, new car prices increased at an annual rate of about 2%. Over the past decade, the compound annual growth rate has tripled to over 6%. Year-over-year, double digit increases occurred three times – 2011 to 2012, 2013 to 2014 and notably, 2020 to 2021. In earlier years, growing options lists (such as leather upholstery, sunroofs, air conditioning and antilock brakes), lower leasing costs or a change in the mix of cars towards SUVs and luxury brands pushed prices higher.
But the latest uptick has been driven by supply chain disruptions – most acutely reflected with chips shortages as cars become more computerized. Additionally, manufacturers and dealers alike have increased prices more than their costs increase. Demand from consumers has remained robust during the pandemic as initially, the public nearly abandoned public transportation. For example, the MTA (Mass Transit Authority) of New York City reported that “April 2020 ridership was just 8.3% of what it was in April 2019“.
There are fewer cars in dealers’ lots. There has been a decrease in “vehicle scrappage.” There are part shortages for both new car manufacturing and older car repair. In various parts of the country, there is a shortage of skilled technicians to perform auto collision repair and mechanical fixes. All of this leads to longer wait times and higher repair costs. As a result, it is imperative that you drive carefully and invest in auto maintenance to reduce accidents, to keep your car longer and to avoid costly auto body repair costs. Be sure to read our tips on insurance coverage, safe driving, and preventive maintenance.
The current conditions should not last forever. Factories have increased production. Telecommuting has decreased traffic. But parts or chip shortages vary by type of vehicle. While the average may be improving, your specific experience might not. Shops cannot schedule as efficiently with parts and labor shortages. That is why it is more important than ever to work with providers who can accurately identify problems the first time and have plentiful and resourceful networks of providers and partners.
With the increase in the average age and the repair costs of cars, some consumers have given more consideration to extended warranty plans. It is worth reviewing what your insurance covers to understand how to file a claim, what is covered, and what you would be paying out of pocket.
Equally important is working with a provider that guarantees their work and has a record of accomplishment of expert service. At Baccari’s Auto Body, we have been providing reliable collision repair to Westchester County since 1976. Our gallery shows our skills in vehicle repairs. Our reviews attest to our customer service. Call us at (914) 762-1199 to discuss your collision repair needs. Stop by our auto body repair shop located on North State Road for a free estimate and guaranteed repairs.