Why Are Car Repair Costs Rising Faster Than Inflation?

A cocktail of geopolitical, economic and technological factors have caused car repair bills to soar in recent years - significantly outpacing general inflation.
 

Average car repair costs soared by 64.7% between 2014 and 2021 - from £2,005 to £3,304 - according to Thatcham Research. Over the same period, inflation grew by around 13%.

Since 2021, both car repairs bills and inflation have seen even larger increases - but the former has increased at a much faster rate.

Indeed, the third quarter of 2024 saw a 26% increase in average car repair costs compared to just a year before, according to the Association of British Insurers (ABI).

Again, auto repair costs increased way ahead of inflation in this period.

But why is it costing us so much to get our cars repaired, even as the inflation rate has eased?

Fixing modern cars is complex

The average modern car now has dozens of CPUs - each working away in the background to keep the car’s many systems working. Advanced driver assistance systems (ADAS) and onboard sensors are now standard components, and if any of them go wrong, it takes skill and time to repair or reconfigure them.

The maintenance and repair of electric and hybrid vehicles, too, requires specialist knowledge.

As car repair technicians jobs have gotten more complex, their training levels - and therefore wages - have climbed.

Getting parts now costs more

The cost of car parts has soared in recent years. Supply chains have been disrupted by the pandemic and various conflicts, while the transition to EV technology, semiconductor shortages, and a scarcity of raw materials like lithium, nickel and cobalt - have all added to the cost of getting parts to your local garage.

The cost of genuine manufacturer parts, meanwhile, has far outstripped aftermarket alternatives.

Mechanics and technicians now command higher wages

With technician shortage across the car industry, wages have needed to increase in order to attract and retain skilled workers. Additionally, it often takes much longer to fix a modern car than in decades past.

Even apparently small repairs cost a lot

The cost to repair a bumper on a car, for example, is now much higher than 10 or 15 years ago - because it may involve calibrating various cameras and sensors at the same time. Similarly, switching out a windscreen often needs full ADAS recalibration.

Then there’s software updates and use of complicated diagnostic equipment - both of which have pushed up labour costs.

Fixing electric vehicles is complex and costly

While mechanically simpler than combustion engine cars, EVs can in fact be very complicated to fix, especially when it comes to the battery and electrical systems. Extra safety procedures are also now needed due to the high voltages involved, together with specialist training and equipment - all of which adds to the cost of repairs.

How much is a car service in 2026?

In terms of how much a car service costs in 2026, the news is a little better, with average prices rising roughly in line with inflation. Here’s a quick breakdown of car service costs now compared to 10 years ago.

Note that costs vary based on the size, make and model of your vehicle.

How can you lower the cost of car repairs?

You can minimise the frequency of garage visits - and the seriousness of repairs - by taking good care of your car.

Be sure to address warning lights and minor issues early, and follow the manufacturer's servicing schedule.

Take the time to compare repair quotes where you can, and consider warranty or breakdown cover for added peace of mind.

Ensure your tyres and brakes are kept in good working order, and that fluid replacements are carried out as per the manufacturer’s guidelines. Doing this will help you avoid larger, more complex- and more costly - repairs.

Conclusion

Low-cost car repairs are sadly now a thing of the past. Indeed, repair costs have significantly outpaced inflation - which has itself been very high.

Many of these factors are beyond the control of UK and European governments and of the car industry - because many parts and technologies are made in factories far away. As such, they are highly susceptible to supply chain disruptions.

At the same time, vehicle technology has become much more complex and time consuming to fix, while skilled technicians are in short supply - both of which push up repair costs.

The pay-off for these high repair costs is the ability to access the very latest technology - which has made driving much safer and more efficient than in years past.

However, with preventative maintenance and prompt repairs, you can, to a degree, control repair costs in the long term.

Sources:

Repair cost increases - Thatcham/ABI