Average Repair Costs on the Rise
Higher speeds lead to more severe accidents
It’s no surprise that the number of daily trips and miles driven have dropped dramatically across the U.S. in the wake of the coronavirus.
The trend also has led to a significant reduction in accidents. Again, no shocker here: fewer cars on the road means there’s less of a chance of running into each other.
What is interesting is that the average repair cost for vehicles involved in a crash is increasing.
Higher Speeds, More Damage
Citing data from various industry and government sources, CCC Information Services, which provides software for insurance claims, says the percentage of “totaled vehicles” and average damage report estimates has increased in each of the last four weeks compared with the same periods in 2018 and 2019.
The analysis showed repair costs increasing across all vehicle types, regardless of vehicle age.
Source: CCC Information Services
CCC attributes the increases in part to higher average speeds enabled by decreased traffic volume. It notes that average rush hour speeds are as much as 75% faster in southern California and that 60% more traffic camera tickets have been issued in New York City.
More severe weather than normal throughout much of the country also contributed to accident rates. For example, as much as $1 billion in damages were attributed to heavy hail in 10 states in early April. There also was heavy rain and flooding in southern California and several southeastern states.
Average repair costs likely will decrease somewhat in the coming months as traffic starts to return to normal levels.
In addition, the number of new cars as a proportion of the overall vehicle fleet will decline slightly due to falling sales. Virtually no new cars were sold in the last two months and at least some year-over-year decline is expected through the rest of 2020.
CCC notes that new vehicles typically are more expensive to repair because they cost more than their predecessors. However, the group adds, that record sales over the last five years should keep repair costs relatively high.
Used car sales also are well off last year’s pace when some 40 million units were moved. Citing J.D. Power and the National Automobile Dealers Assn., CCC says prices of used vehicles (8-years-old or newer) likely will be down about 2% through the end of the year.
It’s the fifth generation of a vehicle that has been increasing in sales year after year since its introduction in 1997.
The little car that could still can. And this time as a car that not only gets great fuel economy, but which has ride and handling that makes it more than an econo-box (and its styling is anything but boxy).
Ford has made an accomplishment that will never be bested, never even be tied.