Higher costs, more complex cars and record write-offs are some of the trends a leading US report into insurance claims found are challenging the repair industry.
CCC Intelligent Solutions’ Crash Course report for the start of 2025 takes a cross sectional look at the data across the US industry and analyses how this affects both workshop, insurers but also the customers looking to have their vehicles repaired.
It found the share of claims that were flagged total loss reached a record high in 2024 with contributing factors including declining used vehicle values, the aging US car parc, and a series of catastrophic events including hurricanes
Ageing Fleet
The report noted the average age of vehicles on the road in 2024 has grown from 11.4 years in 2014 to an estimated 12.7 years in 2024 and is projected to reach 13 years by 2026.
While those involved in insurance claims, the average age has increased to 7.6 years from 6.9 years in 2020. The average age of repairable vehicles was 6.8 years in 2024 (up from 6.1 years old in 2020) and 10.6 years for total loss vehicles (up from 10.0 years old in 2020).
The share of repairable vehicles 7 years or older has increased by nine per cent since 2019. In 2019 vehicles under three years old represented 38.5 per cent of those repaired but this fell to 30.8 per cent in 2024.
The factors driving these trends according to CCC are a mix of positive and negative elements in the automotive industry and the wider economy
The data found consumers are holding onto their vehicles longer due to improved vehicle durability, increased repair options, and economic uncertainty. Cost of living pressures have exacerbated this impact and delay
The economic factors of higher prices and financing costs also means buyers are delaying new vehicle purchases or opting for used vehicles. The average new vehicle loan term is almost six years ( 69 months) contributing to these costs while the average new vehicle price has increased by $11,000 over the past 5 years. In the US the higher Interest Rates also means the average APR for a new vehicle loan is up to 7.2 per cent and 11.3 per cent for used vehicles earlier this year
Other factors which have contributed to this aging fleet of the last few years are production slowdowns and parts shortages that have limited new vehicle availability and driven new and used car prices.
EV and Hybrid repairs
The CCC report also found, labour rates for EV repairs have been consistently higher than for ICE vehicles Over the past five years, with EV labour rates about 30 per cent higher as of 2024.
The average cost of EVs was US $830 more per repair than hybrids and over US$1,030 more than ICE vehicles in 2024. Total parts costs for EVs were $175 lower than hybrids but still $290 higher than ICE vehicles. Hybrids averaged nearly US$470 more in parts costs compared to ICE vehicles and required $200+ more in labour costs than ICE vehicles.
EV repairs also took on average three more hours in labour costs than hybrid repairs and four more than ICE repairs. Hybrids required 1.1 more labour hours on average than ICE vehicles The report attributed this to the additional complexity of EV components and safety systems.
Parts supply issues.
The number of parts replaced during repairs reflects the differences in complexity.
EVs averaged 22 parts per repair, hybrids averaged 18.5 parts, and ICE vehicles had 15.9 parts replaced on average. CCC found this reflected the intricate nature of EV and hybrid technologies compared to traditional ICE vehicles, which in turn influenced repair time and costs.
The report outline how accessing parts is an ongoing problem.
“The scarcity of parts for certain models may prompt a reconsideration of how they approach insuring these vehicles. Some may opt not to insure hard-to-repair cars, or at the very least, adjust premiums to reflect the additional risk.”
The complexity of the parts highlighted a wider theme in the report: the more advanced a vehicle, the more intricate its repair needs.
“For instance, modern cars often require breaking clips and other auto components to access a single part, forcing repairers to replace more than what’s visibly damaged.
ADAS on the rise
The CCC Crash Course report found almost one in ten vehicles to be repaired require a diagnostic scan, that has grown almost ten percent since 2023. Similarly in the US , the number of vehicles requiring calibration is almost one in three, 29.9 per cent, a figure that has grown from 21 per cent in 2023.
The proliferation of ADAS is continuing and the report quotes the Highway Loss Data Institute estimates to indicate six ADAS systems will be present in half or more registered vehicles by 2028.
“Approximately 76 per cent of registered vehicles will be equipped with rear cameras, 51 per cent with front automatic emergency braking, and over 50 per cent with lane departure and/or blind spot monitoring capabilities. Even less prevalent ADAS technologies like adaptive cruise control with lane centring and curve-adaptive headlights will come standard in 21 per cent and 14 per cent of registered vehicles, respectively.”
These calibrations are divided by fuel type with the average calibration per claim with diagnostic operation was almost US $550 in Q4 2024. EVs were over $130 less than the industry average and Ice vehicles. Hybrid vehicles averaged almost $80 more than ICE vehicles.
Rising Costs and customer satisfaction
The report identifies that repair costs in the US have doubled in a decade and in many cases minimum liability limits and premiums have also increased.
“As vehicle values rise, so do repair costs, creating a feedback loop where the expense of insuring a vehicle climbs alongside the costs to fix it. For insurers, the cost to repair vehicles is a growing concern. As premium rates increase to cover these and other expenses, insurers and repairers must work together to find ways to mitigate these rising costs.
“Repairing advanced vehicles requires expertise and access to specialized parts and when parts are unavailable or repairs are too expensive, vehicles can become disposable, leaving the industry and consumers in a precarious position.
The increasing write-off rates, where cost of repair exceeds value is exacerbated by parts shortages and delays and can be felt most acutely by the customer. The report notes this is particularly pressing with EVs.
“The dissatisfaction deepens when parts for EVs are scarce or unavailable. In these instances, the repair process gets drawn out, or worse, the vehicle becomes unsalvageable, leaving the consumer without transportation.
“For an industry that’s increasingly customer-focused, the inability to meet consumer needs in this area highlights a major gap that must be addressed. Repairers and insurers need to find ways to manage these costs and avoid situations where their customers are left feeling let down by the process.”