Auto Body Shops NAICS 811121

May 29, 2025 - Americans Driving Current Cars Longer

• High new car prices and tariffs on foreign automobiles and auto parts are causing consumers to increasingly drive their current cars longer. According to S&P Global, the last two years have seen a steady increase in vehicle age, with Americans keeping their cars for 12.8 years on average. Scrappage rates - the percentage of vehicles removed from operation - have held steady despite new vehicle registrations topping 16 million in 2024. Both statistics indicate an aging American fleet on the roads, which is good for auto repair shops and parts manufacturers, but bad news for manufacturers and dealerships. Maintenance demands are expected to soar in the coming years if the trend holds and prices continue to rise. Online automotive resource Edmunds says the average price of a new car is about $47,000, yet almost half of new car buyers want to spend $35,000 or less for a vehicle.
• In an industry faced with several challenges including a technician shortage, regulatory compliance, and rising costs, auto body shops get creative when it comes to expanding their business. Select body shop owners recently told trade publication Autobody News how they are responding to an increasingly dynamic business. Tedious squabbles with insurance companies over reimbursement have some shops dropping aftermarket parts in favor of getting certified by specific OEM manufacturers to repair their vehicles. OEM parts can be more expensive for the consumer, but can be preferred since the parts are specifically designed for a certain vehicle type. Body shops are also increasing transparency about reimbursement interactions with insurance companies so customers can be armed with data for disputes about claim denials. Other strategies include selling repair services to dealers without their own collision repair offerings, and paying for technician certifications and boosting their pay to keep them on staff longer.

• The auto body repair industry is facing supply chain price increases due to the Trump administration’s 25% tariffs on imported steel, aluminum, whole automobiles, and certain auto parts. According to automotive insurance software firm Mitchell International, tariffs are not only raising auto body repair costs, but are also shifting consumer preferences and boosting the sales of used and recycled parts. Modern automobiles are made up of parts from all over the world and it’s not so simple to label as made in a specific country. With automobile tariffs causing the price of new and used cars to go up, consumers will increasingly shift towards repairing and maintaining their current cars and will be less prone to declare a total loss on a vehicle that sits on the borderline. Mitchell predicts a 1-3% dip in total loss frequency as a result of tariffs.
• Prices for automotive repair services steadily increased throughout 2024 to end the year up 6% - per the US Bureau of Labor Statistics - and could go even higher with the Trump administration slapping a 25% tariff on all imported cars and auto parts. Scheduled to take effect on April 2, steep tariffs on auto parts - including engines, powertrain parts, and electrical components - will increase prices for auto repair and maintenance, according to experts at automotive resource company Edmunds. The problem could be exacerbated if car insurance rates - already historically high - go up even further. Insurance rates are often tied to a vehicle’s repair expenses and replacement cost. If repair costs go up, so will insurance rates to compensate for increased policy payouts.