New cars and trucks are packed with sensors and technology that protect and pamper drivers and passengers. But those features also increase the cost of repairs after accidents.
According to Mitchell, a company that provides data and software to insurance and auto repair companies, the average cost to restore damaged cars to new condition has increased 36 percent since 2018 and could reach $5,000 by the end of this year. That big increase is the main reason insurance premiums have soared — up 17 percent in the 12 months through May.
New SUVs and pickups, including a rapidly growing number of electric models, have become so complex and luxurious that seemingly simple repairs can cost a small fortune, auto experts say. Insurers often pay for a large portion of those costs, driving up their rates.
Materials designed to wrinkle or deform on impact to protect pedestrians or passengers, for example, may be difficult or impossible to repair. Many bumpers need to be replaced after low speed dents because the safety sensors built into them may not work properly after repair. Other systems, even some that do not appear to be damaged, need to be inspected or recalibrated.
“The modern digital architecture is so advanced that it disrupts systems beyond the point of impact,” said Ryan Mandell, director of claims execution for Mitchell. “Returning a car to its pre-loss condition is more difficult than ever in history and will only get more challenging.”
Industry experts are particularly focused on the cost of repairing electric cars and trucks, which are not built like gasoline cars and have different parts. In addition, many mechanics are not trained to work on it. In recent months, news reports and social media stories about astronomical repair bills for electric cars and trucks have caught the attention of car enthusiasts.
Take the case of Chris Apfelstadt and his Rivian R1T pickup truck, who was hit by a Lexus at a traffic light in Columbus, Ohio, in February while he was driving and his infant son was in the backseat.
The damage was initially considered relatively minor and the other driver’s insurer offered him $1,600. The actual cost to repair the bumper at a company certified to repair Rivian vehicles — one of only three in Ohio — was $42,000, about half the truck’s selling price.
“I expected it to be expensive,” said Mr. Apfelstadt, owner of a lighting company, “but it was still a shocking number.”
A major reason is that the accident damaged a streamlined panel that extends from the rear of the truck to the front roof pillars. Repairing and repainting it caused a cascade of pricey work, including removing the interior ceiling material, known as the headliner, and the windshield.
Part of the cost probably also had to do with Rivian’s small size and youth. Like other auto start-ups, the company, which is based in Irvine, California, and delivered its first vehicles to customers in 2021, does not sell through franchised dealerships and has had to build an independent repair network from scratch.
Ford Motor has 2,800 North American dealerships equipped to repair its electric vehicles, along with an extensive network of independent shops and aftermarket suppliers. Rivian has certified approximately 200 North American bodyshops.
“It’s challenging that we’re newer to the market,” said Noe Mejia, Rivian vice president of service operations. But, he added, Rivian’s smaller scale and lack of bureaucracy allow it to work directly with customers and stores to ensure repairs are of a high standard.
Mr. Apfelstadt’s story was widely discussed on the Internet. For some people, stories like his, and harrowing car stories added up after minor mishaps shared online by some Tesla car owners, have become cautionary tales about the financial dangers of electric car ownership.
Auto experts recognize that repairing electric models is on average more expensive than repairing petrol cars. But a more comprehensive analysis of claims and repair data shows that repair costs for electric vehicles are not much higher than those for petrol cars of a similar age and price, and are sometimes lower.
“The idea of electric cars adding up left and right is the horror story that keeps insurers up at night,” said Mr Mandell. “Did that happen? Yes. But the incidents are few.”
Mitchell data shows that electric vehicles will cost an average of about $6,800 to repair after crashes by 2022, about $2,400 more than the average for all cars. Battery-powered cars typically require more expensive parts, the company said, and repairing them takes more time and may require work by specialized mechanics.
But a big reason electric cars cost a lot more to fix on the surface, is that most of them are newer luxury models. Tesla’s cars, which retail for between $40,000 and about $110,000, account for 75 percent of crash claims for battery-powered models.
According to Mitchell, repairing electric vehicles from mainstream brands like Hyundai or Nissan only costs about $800 more than their gas-powered counterparts. And in the premium segment, typical repair costs for battery-powered and gas-powered vehicles are about the same, about $7,000, for model years 2018 and later.
Other data suggests that electric vehicles are doing relatively well. According to Mitchell, about 18 percent of gasoline cars involved in accidents are totaled, while only about 6 percent of battery-powered vehicles are considered irreparable after an accident.
Matt Moore, a senior vice president at the Highway Loss Data Institute, a research organization that serves the insurance industry, said insurance and repair data undermines the idea that batteries or electrical technology lead to burdensome repair costs. For 11 models available in petrol and electric versions – including the Hyundai Kona and Volvo XC40 – repair costs for the electric models are only 2 percent higher, according to the institute’s analysis.
Gasoline or electric, said Mr. Moore, more expensive, rarer, and better-performing cars tend to be involved in fewer but more serious accidents, in part because they’re more likely to be driven by people who speed and take other risks.
“They hit fast and they hit hard,” he said. “Every collision is a mix of man and machine.”
But auto experts added that damage to electric cars’ battery packs – their most expensive component – could make them more difficult to repair, requiring special tools and advanced training.
“Right now, if there’s serious damage to the pack, no one is eager to fix it,” said Sandy Munro, an engineer and consultant who hosts a popular YouTube show in which he talks to Elon Musk, Tesla’s CEO. interviewed. , and others in the automotive industry.
Automakers say they are aware of rising repair costs and are working to make cars easier to repair, especially electric vehicles, which many executives expect will replace most or all gasoline models in the coming decades.
BMW has equipped its electric vehicles with sensors that provide data on the direction and intensity of the crash force. That information can help technicians determine which battery modules need to be replaced. Ford has made it so that its dealers can replace a damaged battery box on the Mustang Mach-E and swap all components in a new box. General Motors is developing a process for dealers to repair and replace packages, including individual battery modules that are damaged.
While repair costs are rising, Mr Munro stressed that newer cars offer significant advantages over older vehicles. They can absorb horrific impact forces and send occupants running away. Or they avoid collisions entirely, using the same cameras and sensors that make repairs more difficult.
“If nobody dies but we can’t fix that bumper, I don’t care,” he said. “It’s just scrap. The focus is rightly on the people inside and the efficiency of the car.”