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by Lurah Lowery, Repairer Driven News

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 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 use 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 “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 nearubiquitous 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,” Mandell said.

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 three-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 covered factors 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, 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 due to shortage of necessary components and labor. The industry was hit with higher raw material prices and higher transportation costs from higher wages and fuel prices. The byproduct: the cost of replacement parts has soared.”

She also found the shortage of collision repair technicians contributes to increased labor rates all while more repairs are needed due to a rise in auto accident frequency.

“Shortage of collision repair technicians has been an issue for the industry for some time but has been worsened over the last two years as overall labor shortages impact the industry further,” Gotsch wrote. “Even before the pandemic Universal Technical Institute predicted a wave of retiring Baby Boomers would create 100,000 auto technician job openings over the next decade or so, with the Bureau of Labor Statistics projecting a 4% decline in employment in the overall auto technician field through 2029.

“In fact, most repairers indicate the technician shortage has been the primary reason for longer backlogs of work. …Many shops have indicated they cannot repair as many vehicles at the same time as they did before the pandemic, as repairer productivity (measured by labor hours per shop day) has fallen.”

The competition between body shops to hire out of a smaller pool of trained technicians has also increased the labor rate, according to Gotsch.

“Data from the Bureau of Labor [Statistics] shows average weekly wages for collision repair employees have been increasing at a faster pace, with Q4 2021 average weekly wages up 7.5% from Q4 2020, versus an increase of 6.1% between Q4 2019 and Q4 2020. Labor rates have also risen, with some of the largest increases in 15 years. Higher labor rates combined with continued growth in the average number of labor hours per repair with increased vehicle complexity is another key factor driving up repair costs.”

Mandell also noted shops are having to pay technicians more to

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