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CCC Crash Course Report: Cost of repair increases in the first half of 2024

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Announcements | Collision Repair
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The total cost of repair (TCOR) has increased by 3.7% to $4,642 for the first half of 2024, compared to $4,477 in H1 2023, according to CCC’s Q3 Crash Course Report. 

“This increase may indicate that TCORs are beginning to fall back in line with inflationary trends,” the report says. 

TCOR costs jumped double-digits in 2021 and 2022, according to the report. 

“When indexed against 2020, parts contributed over 50% of the increased repair costs,” the report says. “As labor rates began to rise in 2022, we saw labor, especially non-paint labor, account for a larger share of increased repair costs.” 

The prevalence of diagnostics in vehicle repair is another key contributor, the report says. It adds the procedure often shows up in miscellaneous (sublet) estimate line items.

Labor rates were the outlier driving overall repair cost increases in 2023, according to the report. It was up 7.4% for the year, which followed a 7% increase in 2022. The rates are up 3.5% year over year for 2024, the report says. It adds that when comparing the first halves of 2024 and 2023, labor rates have increased by 4.9% so far this year. 

As the rate of inflation continues to slowly decline, labor rate inflation is coming closer to falling in line, the report says. 

Labor hours have also ticked upward in recent years. The average number of labor hours per claim was 23.9 in 2019. Data in the report shows the average is 27.4 for the first half of 2024. However, that number is down slightly from 27.6 in 2023. 

The average price per part increased by 2.4% in Q2, which is the largest increase since Q2 2022, the report says. The increase followed a 0.7% decrease in Q1. Price per part had a modest increase in 2023 at 0.2%. 

 

According to the report, the rate of change for the average number of parts per appraisal appears to be slowing. The average went from 11.2 parts per appraisal in 2020 to 12.2 in 2021 and 13.3 in 2022. The average was 13.6 parts for the first half of 2024. 

Cycle times continue to improve, which includes time between appraisal completion, vehicles going into the shop, and repair time, according to the report. 

Vehicles were able to get into shops for repairs almost two days faster in Q1 versus Q4 2023, according to the report. Average repair time also decreased by 1.7 days, the report says. 

“While these trends are likely to develop further, they are indicative of decreased shop backlogs, lower severity of repairs, and increased productivity,” the report says. 

Shop productivity, or labor hours per repair day, also saw improvement during the first half of the year for non-drivable vehicles, the report says.

“As compared to pre-pandemic productivity levels, cycle times for labor require an average of four additional days for drivable vehicles and eight days for non-drivable vehicles,” the report says.

IMAGES

Photo courtesy of tdub_video/iStock 

Charts/graphics provided by CCC

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