The repair industry faced a perfect storm of challenges in 2024 including a softening economy, increasing repair costs, and an aging vehicle pool, according to CCC’s Top 2024 Trends Report. 

“One of the biggest shifts this year was inflation, which drove the cost of motor vehicle insurance up by 51% (since 2022), causing consumers to become more selective about filing claims for minor damages,” the report says. 

Repairable claims of $2,000 or less make up just 26% of the mix, down from 43% in 2019, according to the report. 

The report notes the Insurance Research Council found that 14% of drivers are uninsured and J.D. Power reports that 5.7% of households have at least one vehicle that does not have insurance. 

New vehicle inventory has started to increase but consumers continue to face elevated prices, the report says. The average transaction price was $48,623 in October while the average new vehicle financing rates have been 7% higher for the past two years. 

About 17% of new auto loans have monthly payments of $1,000 or more, down slightly from 17.9% in Q4 2023. However, as of Q3 2024, 24.2% of new vehicle sales with a trade-in had negative equity with consumers upside down in their auto loans, owing an average of $6,548. 

Higher payments could result in consumers keeping their vehicles longer. As of 2024, 66% of vehicles in operation are seven years or older and the average U.S. vehicle age has now increased to 12.6 years. 

The report notes that the aging car parc could also mean consumers with older vehicles are more prone to increase deductibles or drop first-party coverages, decreasing policy limits. The consumer also could elect to go without insurance altogether. 

“In fact, 22.1% of collision claims had a $1,000 deductible in Q3 2024, up from 19.7% in Q1 of 2023, while those with a $500 deductible have decreased from 52.9% of collision claims to 48.6%.” 

Auto collision frequency has decreased to 5.17%, the lowest since Q4 2021, the report says. 

“It is noteworthy that annualized collision exposure units, measured by earned car years, are down 2% year-over-year, while paid collision claims are down 5.7%,” the report said. 

Year-over-year through October 2024, CCC data indicates a 2% increase in vehicles flagged as total losses. This is partly due to the erosion of used vehicle values and an increasingly mature vehicle pool, the report says. 

While consumers are facing higher new car values, the CPI for used cars and trucks has decreased by 3.4% year-over-year. 

The report says 72% of valuations across all loss categories are for vehicles seven years or older. 

“An increased total loss frequency will, conversely, decrease the ratio of repairable vehicles,” the report says. “Higher physical damage serenity losses, which might have been repaired a year ago, are more likely now to be totaled, increasing shop capacity and lowering overall cycle times.” 

A higher chance of total loss claims means consumers have more of a possibility of being underwater due to increasing unfavorable loan terms, the report says. 

Vehicle repair trends in 2024 show the average total cost of repair through Q3 2024 was $4,667, a 3.7% increase from the same time last year. The report adds that the increases are beginning to fall back in line with inflationary trends. 

The average price per part increased by 1.4% year-over-year following increases of 2% and 1.2% in previous quarters. The increase is significantly lower than the 7.3% and 5.4% increases seen in previous years which caused total repair costs to jump double digits in 2021 and 2022, the report says. 

Repair costs have seen the largest increase from labor and miscellaneous costs, which often include diagnostics, the report says. 

The average number of labor hours per appraisal in 2023 increased slightly to 27.6 hours. Through Q3 2024, the labor hours are down slightly to 27.3 hours, according to the report. 

While labor hours are slightly down, labor rates were up 4.7% year-over-year through Q3. 

“As inflation began to level out entering Q4 of 2023, prior trends indicate that we could see labor rates increases continue to decline or flatten as we conclude 2024,” the report says. 

Cycle times continued to decrease as vehicles got into shops for repairs nine days less than the same time last year. Average repair times were also down 1.4 days per repair. 

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