New cars and trucks are equipped with sensors and technology to protect and care for drivers and passengers. But these features also increase repair costs after an accident.
The average cost to refresh a damaged car has soared 36% since 2018 and could top $5,000 by the end of the year, said Mitchell, who provides data and software to insurance companies and auto repair businesses. The sharp increase is largely responsible for a surge in insurance premiums – up 17% in the 12 months to May.
New sport utility vehicles and pickup trucks, including a rapidly growing number of electric models, have become so complex and luxurious that seemingly simple repairs can cost a fortune, auto experts say. Insurance companies usually bear most of the cost, leading them to raise rates.
For example, materials designed to shrink or deform in a crash to protect pedestrians or passengers can be difficult or impossible to repair. Many bumpers must be replaced after low-speed driving because the safety sensors embedded in them may no longer function properly after repairs. Other systems, even some that appear to be undamaged, must be inspected or recalibrated.
“Modern digital architectures are so advanced, systems beyond the point of impact are being disrupted,” said Ryan Mandell, Director of Claims Performance at Mitchell. “Returning a car to its pre-loss condition is more difficult than at any time in history, and it’s only going to get more challenging.”
Industry experts are particularly concerned about the cost of repairing electric cars and trucks, which are built differently than gasoline vehicles and have different components. Additionally, many mechanics do not have relevant training. News reports and stories shared on social media about the astronomical maintenance costs of electric cars and trucks have caught the attention of auto enthusiasts in recent months.
Take Chris Apfelstadt and his Rivian R1T pickup truck, which was rear-ended by a Lexus at a traffic light in Columbus, Ohio, in February while he was driving with his young son in the back seat.
The damage was initially believed to be relatively minor, and the other driver’s insurance company offered him $1,600 in compensation. The actual cost of repairing the bumper at a Rivian-qualified vehicle repair business (one of only three in Ohio) was $42,000, about half what the truck sold for.
“I expected it to be expensive,” said Mr. Apferstadt, who owns a lighting company, “but it’s still a staggering figure.”
A key reason was that the accident damaged a glossy panel that extends from the rear of the truck to the front roof pillars. Restoring and repainting it triggered a series of expensive jobs, including removing the interior ceiling material (known as the headliner) and the front windshield.
Some of the cost may also have to do with Rivian’s small stature and youth. Like other auto startups, the Irvine, Calif.-based company, which delivered its first vehicles to customers in 2021, does not sell through franchised dealerships and has to build an independent repair network from the ground up.
Ford Motor Company has 2,800 North American dealerships capable of servicing electric vehicles, as well as an extensive network of independent stores and aftermarket suppliers. Rivian has certified approximately 200 North American collision stores.
“We’re new to the market, and it’s a challenge,” said Noe Mejia, vice president of service operations at Rivian. But he added that Rivian’s small size and lack of bureaucracy allows it to work directly with customers and stores to ensure repairs are to a high standard.
Mr Appfelstadt’s story has been widely discussed on the Internet. For some, accounts like his, along with harrowing stories of vandalized cars after minor accidents that some Tesla owners have shared online, have become cautionary tales about the financial risks of owning an electric car.
Auto experts admit that, on average, repairing an electric car is more expensive than repairing a gasoline car. But a more comprehensive analysis of claims and repair data shows that repair costs for EVs are not significantly higher than gasoline vehicles of the same age and price, and in some cases are even lower.
“The idea of electric cars being left and right is a horror story that keeps insurance companies up at night,” Mr Mandel said. “Has there been such a thing? Yes. But such incidents have been few and far between.”
According to Mitchell’s data, by 2022, the average repair cost of an electric car after an accident is about $6,800, about $2,400 more than the average repair cost for all cars. Battery-powered cars tend to require more expensive parts, and repairing them takes more time and may require the work of professional mechanics, the company said.
But at first glance, EVs tend to cost more to repair, in part because most of them are newer luxury models. Tesla vehicles, which sell for around $40,000 to $110,000, account for 75 percent of crash claims for battery-powered vehicles.
Repairing an EV from a mainstream brand like a Hyundai or Nissan costs only about $800 more than a gasoline car, Mitchell said. At the high end, typical repair costs for battery-powered and gasoline-powered vehicles from model year 2018 and later are about the same, about $7,000.
Other data suggest EVs are doing relatively well. Mitchell said about 18 percent of gasoline-powered vehicles are involved in crashes, while only about 6 percent of battery-powered vehicles are deemed beyond repair after a crash.
Matt Moore, senior vice president of the Highway Loss Data Institute, a research group that serves the insurance industry, said insurance and repair data undercut the idea that batteries or electric technology would impose heavy repair costs. Of 11 gasoline and electric models, including the Hyundai Kona and Volvo XC40, repair costs for electric models were just 2 percent higher, according to the institute’s analysis.
Mr Moore said more expensive, rarer and higher-performance cars, whether petrol or electric, tended to have fewer but more serious accidents, in part because people who drove them were more likely to speed and take other risks.
“They hit hard and fast,” he said. “Every collision is a mix of man and machine.”
But damage to EV battery packs, the most expensive component of an EV, could make them harder to repair, requiring special tools and advanced training, the auto expert added.
“Right now, if the battery pack is badly damaged, no one is going to rush to fix it,” said Sandy Munro, an engineer and consultant who hosts a popular YouTube show in which he interviewed Tesla’s chief executive. Executive Elon Musk, and others in the auto industry.
Automakers say they are aware of rising maintenance costs and are working to make vehicles easier to service, especially electric vehicles, which many executives expect will replace most or all gasoline-powered models in the coming decades.
BMW has equipped its electric vehicles with sensors that provide data on the direction and magnitude of the force of a crash. This information can guide technicians in determining which battery modules need to be replaced. Ford has made it so that its dealers can replace the damaged battery tray on the Mustang Mach-E and replace all components into the new tray. GM is developing a process that would allow dealers to repair and replace battery packs, including damaged individual battery modules.
Despite rising maintenance costs, Mr Munro stressed that newer vehicles have significant advantages over older vehicles. They can absorb the force of a terrible crash and send passengers away. Or they avoid collisions entirely, using the same cameras and sensors, making repairs trickier.
“If no one dies, but we can’t fix the bumper, I don’t care,” he said. “It’s just scrap metal. The focus is on the efficiency of the people in the car and the car.”
