Rex Tokeshi-Torres/Associated Press
New models - whether powered by combustion engines or electric batteries - have essentially become very expensive computers on wheels, sometimes containing as many as 3,000 semiconductors. This is wonderful from a safety and driving performance perspective, but replacement parts cost more and modern vehicles take longer to fix.
In the U.S., car repair prices are increasing at a 20 percent annual rate, or around five times the overall rate of inflation. One of the better performing auto insurers, Progressive, last month blamed higher than anticipated costs to fix cars for a deterioration in its underwriting performance, adding it would be"aggressive" in raising customer premiums.
"The more technology you add to avoid or reduce the severity of an accident, the more expensive components there are in peripheral areas of the vehicle," Adrian Watson, head of engineering at Thatcham Research, told me."Getting the balance right is hard." If that happens, repair costs can be enormous, particularly if the automaker is inexperienced and has made suboptimal design choices. Consider the bill one customer received for repairing a Rivian Automotive pickup truck after it was involved in a low-speed rear-end collision in February. Originally estimated at $1,600, the final cost came to an eye-watering $42,000, which isn't far off the price of the average new car.