Like everything else, car prices are on the rise. This has led to Americans paying record-high prices for vehicles in 2022. But it is not just the cost of a new car that has risen. Getting into a collision will set you back more than ever before. Here’s what you need to know.
Why are car prices so high?
Considering just how high gas prices are, you might think that it’s owning a car that’s become expensive. However, the reality is that high gas prices cause the price of everything else to rise. This includes the production of car parts, which requires a lot of energy consumption. As such, the cost of building a car is already high.
This is exacerbated by massive supply chain issues. Supply chain issues are nothing new. They began during the pandemic, when supply chains around the globe were temporarily shut down. But these issues had started to work themselves out in a world in recovery. Russia’s invasion of Ukraine threw a spanner in the works.
Both parts and tools are now in short supply, and demand has therefore driven up prices even further. The average transaction price of a new vehicle in June reached $48,000, up nearly 2% from May. These numbers are skewed slightly by the uptick in luxury vehicle purchases, but even those buying low-end cars are spending more.
If you already own a car, you may not be particularly concerned. However, high car prices lead to high repair costs. Unfortunately, the chances you will need some sort of repairs done might be higher than you think.
Collisions are common
Most people assume that collisions are very uncommon, because it is only the major accidents that make headlines. But hitting a parked car is very common. So common, in fact, that nearly 60% of Americans say that it has happened to their car. Disappointingly, 70% of those people never got the other driver’s contact details.
Aside from collisions with other cars, many drivers have minor collisions with obstacles, causing scratches, scrapes, and dents. These generally do not require urgent repairs, but they can badly affect the aesthetic value of a car.
Of course, there is also a chance that a car will require major repairs due to a breakdown caused by faulty or old parts. Replacing a battery or a fan belt can be expensive in today’s climate. This is not just because of the high price of equipment and parts.
Labor costs
It is not just the price of parts that has gone up but the cost of labor as well. Like everyone else, mechanics are struggling to make ends meet because of the effects of inflation. They have therefore had to raise their prices. Labor is becoming increasingly expensive simply because the cost of living has gone up.
Mechanics who employ a large number of laborers need to increase wages as well. This further adds to the costs customers have to pay just to get their cars repaired. At this point, you may be wondering whether it is even worth getting your car repaired.
The reality is that high prices will force some people to embrace public transport while their unrepaired vehicles sit at home. Public transport remains a much cheaper option, even with providers having to raise prices to keep up with the price of gas.
If you prefer to use ridesharing apps, however, you may well struggle to keep costs down. Even if the umbrella company does not raise prices that high, many drivers will not accept rides that just are not worth the price. Users are having to pay tips in order to get a driver to pick them up.
Americans are paying more for vehicles than ever before. This impacts the cost of repairs as well. In 2022, making ends meet without major lifestyle compromises is becoming an artform.
