Insurance Premiums Killing You?

Why Car Repairs Have Become So Expensive.

New cars and trucks are packed with sensors and technology that protect and pamper drivers and passengers. But those features are also raising the cost of repairs after accidents.

The average cost of making damaged cars good as new has soared 36 percent since 2018, and may top $5,000 by the end of this year, according to Mitchell, a company that provides data and software to insurance companies and auto repair businesses. That big increase is the main reason that insurance premiums have been soaring — up 17 percent in the 12 months through May.

New sport utility vehicles and pickup trucks, including a rapidly growing number of electric models, have become so complex and luxurious that seemingly simple repairs can cost a small fortune, auto experts said. Insurers are often on the hook for much of those costs, leading them to raise their rates.

Materials designed to crumple or deform in a crash to protect pedestrians or passengers, for example, can be hard or impossible to repair. Many bumpers must be replaced after low-speed dings because the safety sensors embedded in them may no longer work properly after repairs. Other systems, even some that do not appear to be damaged, must be inspected or recalibrated.

“The modern digital architecture is so advanced that systems beyond point of impact are being disrupted,” said Ryan Mandell, director of claims performance for Mitchell. “Getting a car back to pre-loss condition is harder than at any point in history, and will only become more challenging.”

Industry experts have been particularly focused on the cost of repairing electric cars and trucks, which aren’t built like gasoline cars and have different parts. In addition, many mechanics aren’t trained to work on them. In recent months, news reports and stories shared on social media about astronomical repair bills for electric cars and trucks have captured the attention of car enthusiasts.

Consider the case of Chris Apfelstadt and his Rivian R1T pickup truck, which was rear-ended by a Lexus in February at a stoplight in Columbus, Ohio, while he was driving and his infant son was in the back seat.

The damage was initially deemed relatively minor, and the other driver’s insurer offered him $1,600. The actual cost to fix the bumper at a business certified to repair Rivian vehicles — one of just three in Ohio — was $42,000, roughly half the truck’s selling price.

“I expected it to be expensive,” said Mr. Apfelstadt, who owns a lighting company, “but it was still a shocking number.”

A key reason is that the accident damaged a sleek panel that extends from the truck’s rear to front roof pillars. Repairing and repainting it set off a cascade of pricey work, including removing the interior ceiling material, known as the headliner, and front windshield.

Some of the cost probably also had to do with Rivian’s small size and youth. Like other auto start-ups, the company, which is based in Irvine, Calif., and delivered its first vehicles to customers in 2021, does not sell through franchised dealers and has had to build an independent repair network from scratch.

Ford Motor has 2,800 North American dealers equipped to repair its electric vehicles, along with a vast network of independent shops and aftermarket suppliers. Rivian has certified about 200 North American collision shops.

“It’s a challenge that we’re newer to market,” said Noe Mejia, Rivian’s vice president of service operations. But, he added, Rivian’s smaller scale and lack of bureaucracy allow it to work directly with customers and shops to ensure repairs meet high standards.

Mr. Apfelstadt’s story was discussed extensively on the internet. To some people, accounts such as his, and harrowing tales of cars totaled after minor accidents shared online by some owners of Tesla cars, have become cautionary tales about the financial perils of owning electric cars.

Auto experts acknowledge that repairing electric models is more expensive on average than repairing gasoline vehicles. But a fuller analysis of claims and repair data shows that electric vehicle repair costs are not markedly higher than costs for gasoline cars of similar age and price, and that they’re sometimes less.

“The idea that E.V.s are being totaled left and right is the horror story that keeps insurers up at night,” Mr. Mandell said. “Has that happened? Yes. But the incidents are few and far between.”

Data from Mitchell shows that in 2022 electric vehicles cost about $6,800 on average to fix after accidents, about $2,400 more than the average for all cars. Battery-powered cars tend to require more expensive parts, the company said, and repairing them takes more time and may require work by specialist mechanics.

But a big reason electric cars tend to cost much more to repair, at first glance, is that most of them are newer luxury models. Tesla’s cars, which sell for between $40,000 and around $110,000, account for 75 percent of collision claims for battery-powered models.

Fixing electric vehicles from mainstream brands such as Hyundai or Nissan costs only about $800 more than their gasoline counterparts, according to Mitchell. And in the premium segment, typical repair costs for battery-powered and gasoline vehicles are roughly the same, around $7,000, for model years 2018 and later.

Other data suggests that electric vehicles fare relatively well. About 18 percent of gasoline cars involved in crashes are totaled, while only about 6 percent of battery-powered vehicles are deemed unrepairable after accidents, according to Mitchell.

Matt Moore, a senior vice president at the Highway Loss Data Institute, a research organization that serves the insurance industry, said insurance and repair data undercut the idea that batteries or electric technology racked up burdensome repair costs. For 11 models that are available in gasoline and electric versions — including the Hyundai Kona and Volvo XC40 — repair costs for the electric models are just 2 percent higher, according to the institute’s analysis.

Gasoline or electric, Mr. Moore said, more expensive, rare and higher-performing cars tend to be involved in fewer but more severe accidents in part because they are more likely to be driven by people who speed and take other risks.

“They hit fast and hit hard,” he said. “Every collision is a mix of man and machine.”

But auto experts added that damage to the battery pack of electric cars — their most expensive part — could make them harder to repair, requiring special tools and advanced training.

“Right now, if there’s serious damage to the pack, nobody is anxious to take a shot at repairing that,” said Sandy Munro, an engineer and consultant who hosts a popular YouTube show on which he has interviewed Elon Musk, the Tesla chief executive, and others in the auto industry.

Automakers say they are aware of rising repair costs and are working to make cars easier to fix, especially electric vehicles, which many executives expect to replace most or all gasoline models in the coming decades.

BMW has equipped its electric vehicles with sensors that provide data on crash-force direction and intensity. That information can guide technicians on which battery modules need replacement. Ford has made it so its dealers can replace a damaged battery tray on the Mustang Mach-E and swap all components into a new tray. General Motors is developing a process to let dealers repair and replace packs, including individual battery modules that are damaged.

Even though repair costs are climbing, Mr. Munro emphasized that newer cars provided significant benefits over older vehicles. They can absorb horrifying crash forces and let occupants walk away. Or they avoid collisions entirely, using the same cameras and sensors that make for trickier repairs.

“If nobody dies but we can’t fix that bumper, I don’t care about that,” he said. “It’s only scrap iron. The focus is rightly on the people inside and the efficiency of the car.”