Repair costs: skyrocketing

Repair costs: skyrocketing

For the year 2023, the insurance and customer loyalty specialist CarGarantie evaluated around a million warranty contracts for new and used cars of all brands and models in its annual damage analysis in order to determine the average repair costs for damage subject to warranty. Conclusion: The trend towards ever higher costs continues: in 2023, repair costs averaged around 657 euros. There had already been a price jump in 2022, which, at 618 euros, exceeded the 600 euro mark for the first time. The increase in 2023 is significantly larger, with an increase of almost 40 euros.

Marcus Söldner, CEO of CarGarantie, comments on the development: "In the previous five years, repair costs have already increased by a total of around 100 euros. However, the increase of almost 40 euros within a single year that can now be seen is still extraordinary." There are many reasons for this: International crises make raw materials and spare parts more expensive and lead to increased inflation and economic uncertainty, which has a clear impact on prices. “Unfortunately, there is currently no quick end to these crises in sight, so it is quite possible that this increase will continue,” said Söldner. This makes it all the more important for retailers to protect themselves against financial risks. CarGarantie's warranty and repair cost insurance helps retailers cushion repair costs and at the same time increases customer satisfaction. “Protection against financial uncertainty is also becoming more and more important for customers in times of inflation and massive price increases,” emphasizes Söldner.

As in previous years, the engine retains its position as the most expensive component in both used and new cars. For used cars, its share of the claims settlement amount increased by two percentage points to 25.9% compared to the previous year (23.9%). When it comes to new cars, it tops the list with 20.4% (previous year: 19.8%). In 2023, in second and third place are the fuel system including turbocharger with 17.6% (used car; previous year: 18.0%) and 17.1% (new car; previous year: 18.9%) and the electrical system with 13.4% (used car; previous year: identical) and 14.7% (new car; previous year: 13.2%). Due to increasingly complex electrics and electronics in vehicles, the electrical system will continue to be the component most frequently affected by defects in 2023. For used cars, their share of the frequency of claims was 22.1% (previous year: 21.3%); for new cars it was 22.2% of claims (previous year: 20.2%). Once again, the fuel system is in second place for both types of vehicles. In used cars it is responsible for 17.7% of damage (previous year: 18.2%) and in new cars for 15.1% (previous year: 17.1%). In third place for used cars is the engine at 14.0% (previous year: 12.6%) and for new cars the comfort electrics come in at 14.2% (previous year: 13.0%).

Compared to the previous year, the damage in 2023 occurred slightly later on average. For used cars, 27.6% of damage occurred within the first 5,000 km, compared to 29.2% in the previous year. Around a fifth, specifically 21.2%, of the damage only occurred after more than 25,000 km (previous year: 18.5%). The occurrence of damage after days shows a similar picture: 25.8% of the damage only occurred after more than 360 days. In the previous year it was only 24.0%. With over 50 years of experience and around 300 million euros in premium income per year as well as a market presence in 19 countries, CarGarantie is one of the leading specialist insurers for warranty and customer loyalty programs for new and used vehicles in Europe. More than 40 manufacturers/importers and over 23,000 specialized dealers trust CarGarantie's individualized warranty programs and high service quality.