Why Vehicles Are More Expensive To Buy And Maintain Than Ever Before
The Wall Street Journal reported on a disturbing new trend in vehicle repairs that you need to know about. The average auto repair took 17 days to complete last year which was up 65% from the year before. To make matters worse, the average repair cost increased by almost 20% from the previous year.
Three reasons this is this happening:
An obvious reason this is happening is because repair shops cannot find qualified mechanics to work on vehicles. One auto shop told The Wall Street Journal that business is booming but his shop is unable to keep up with demand because he cant find quality staff. Last year, the US market had a labor demand for 258,000 new auto mechanics while only 48,000 people graduated with a matching certificate or degree. This is a long-term problem with no obvious solution in sight.
Another reason this is happening is because the average age of vehicles on the road keeps climbing higher. As the prices of new and used vehicles continue to go up, vehicle owners are holding onto their cars longer and longer in order to save a few dollars. This has pushed the average age vehicle on the road to a staggering 12.5 years. The older a vehicle gets, the more repairs it will inevitably need.
The final reason that auto shops are struggling to keep up is an excuse we’ve heard for over three years: COVID. The pandemic resulted in supply chain shortages that companies are still unraveling to this day. If you get into an accident, there is a good chance your vehicle will require new sensors which have been notoriously back-ordered since the early days of the pandemic. The Wall Street Journal story pointed to something as simple as a specialty tire used by BMW that had been back ordered for over a month.
Why is an insurance agency telling me this?
The bottom line is that the price of vehicle ownership is going up. If you buy a new car, a used car, or keep your car, you’re going to be spending more money on the process than you would have just a few years ago. Since vehicles cost more now than ever before, the risk of carrying state minimum insurance continues to go up:
Consider these numbers on the average price of a new vehicle from Clark Howard:
Non-luxury new vehicle: $44,960
Luxury new vehicle: $64,396
New electric vehicle: $55,488
In the state of Georgia, the state minimum auto insurance is 25/50/25. This means $25,000 in bodily injury per person, $50,000 in bodily injury per accident, and $25,000 in property damage per accident. If you total a new luxury vehicle while carrying state minimum insurance, you will be on the hook for tens of thousands of dollars before bodily injuries are taken into account.
If you’re trying to figure out how to keep yourself properly protected while not breaking the bank on auto insurance, give our team a call and we will find a policy that matches your needs. Our team of independent specialists shops multiple insurance carriers to help our clients find the right coverage at the right price. Give Amanda, Sean, or Louis a call today at (478) 745-7200.