Despite billions in tariff prices for imported autos and components, new automotive prices have stayed comparatively flat. But the information isn’t pretty much as good for automotive house owners taking their autos to the repair store.
The value of automotive repairs jumped 5% simply from July to August, in line with the most recent Consumer Price Index, the federal government’s key inflation measure. That’s the most important one-month enhance on document, and the price of repairs is now up 15% in comparison with a 12 months in the past.
But regardless of what you may assume, it’s not simply tariffs driving up the value of repairs. That’s regardless that tariffs, which are a US tax on imports, took impact on all imported components in May.
“There’s quite a few factors,” mentioned Skyler Chadwick, director of product consulting, Cox Automotive.
The rising age of autos on the highway, a technician scarcity lifting wages in the sector, and extra advanced autos are additionally accountable, Chadwick mentioned.
Tariffs are positively a part of the rationale Americans are paying extra on the store – auto components, particularly after-market components used in repairs, are primarily imported and due to this fact topic to tariffs of 25%.
“Do I believe tariffs have been an impact on this? You betcha,” Chadwick mentioned.
He factors out that there’s no US-made automotive with 100% American components. So even when your American-made automotive wants upkeep or repairs, there’s an excellent likelihood the half goes to be coming from Mexico or someplace else abroad.
“The cost of parts has gone through the roof because we have to pull those parts in from other parts of the world,” Chadwick mentioned. “You could be a lucky customer who draws that lottery ticket and needs an American part. Otherwise, your part is subject to a 25% increase.”
So far, many producers have accomplished their greatest to maintain new automotive prices little modified, usually by absorbing a lot of the tariff price themselves.
That’s partly to keep away from angering the Trump administration, particularly as automakers have gotten breaks on laws. That contains the elimination of potential fines they used to face for violating emissions guidelines, the specter of which pressured them to spend billions on regulatory credit to greener automakers. Those fines have been repealed as a part of the Republican celebration’s tax and spending invoice handed this summer time.
Car firms additionally know that automotive prices are already close to document ranges. Affordability is a significant concern for automotive patrons, particularly with the present excessive charges for automotive loans.
“Automakers have been extremely reluctant to let consumers see the cost of tariffs show up in sticker prices,” mentioned Patrick Anderson, president of the Anderson Economic Group, a Michigan-based assume tank.
But there’s much less stress to maintain the prices of automotive components in examine. That’s as a result of there’s much less consideration paid on to them, and likewise as a result of house owners aren’t in a position to store round for higher prices on the precise half a automotive may want.
Beyond tariffs, a main concern driving up the value of repairs is the actual fact automotive house owners are hanging onto automobiles longer than they’ve in the previous, Chadwick mentioned. The excessive value of recent automobiles, and rising financial uncertainty, is prompting many to grit their tooth and pay for repairs slightly than purchase a alternative.
“In 2024, we saw the average vehicle age at 12.6 years. Now in 2025, we see that number jump to 12.8 (years),” he mentioned. “That’s actually quite a big jump. We haven’t seen a jump like that in quite some time.”
The elevated age of autos on the highway means most repairs shall be dear, Chadwick mentioned.
“The older the vehicles, the more likely they will require major services – things like transmissions, suspension items, engine rebuilds – the types of things that are the most costly.”
Car prices, and excessive rates of interest, are holding automotive patrons on the sidelines, and automotive repair retailers busy.
The common transaction value of a brand new automotive in August was $48,365, in line with automotive shopping for website Edmunds. That’s down 2% from December’s document excessive, however up $11,400, or greater than 30%, from August 2019. Used automotive prices on common are additionally up 26% over the identical interval, with the value of the lower-mileage automobiles that are three years previous or youthful up 40%.
And that’s earlier than excessive rates of interest on auto loans are factored in, which have resulted in large automotive funds for many debtors. More than 15% of all new automotive funds, together with each loans and leases, are greater than $1,000 a month, a document share, in line with Experian. More than 30% of used automotive patrons are paying $600 a month or extra.
“When consumers find new vehicles more expensive, they spend more time and money repairing existing vehicles,” mentioned Anderson.
Labor prices can also make up about 60% of the asking value of repair, Chadwick mentioned. And a scarcity of certified repair employees is elevating these prices, particularly as automobiles are more and more loaded with extra superior know-how.
The most up-to-date knowledge from the Labor Department confirmed auto repair wages rising 7% between 2023 and 2024.
“The technician shortage is a huge thing. Labor (cost) is going to continue to increase,” Chadwick mentioned.