Service Drive Spending in 2023

As of May 2023, vehicle repair prices had already jumped 23% over 2022. The cost of maintenance is one of the most inflationary things consumers are experiencing. It is just behind healthcare increases.

The increased inflation rate wasn’t the full cause of these vehicle repair and maintenance increases. The average vehicle on the road in 2023 was 12.4 years old. And as these vehicles get older, they get more expensive to keep running.

Before the pandemic, we saw repair orders closing with an average cost of less than $300. In 2023, the average repair order paid was $513. That’s insane!

It is no wonder that nearly half the people who receive an offer to see how much equity they might have in that car they just serviced or check that offer out.

The average car payment tipped $739 for a new car in Q4 of 2023. The average repair order people paid before selling their car to the dealership was $564. Services varied from oil changes to major repairs before people got rid of the car they had just serviced. What happens a lot of the time is people have back-to-back repairs or maintenance, and they begin to lose faith in the car they’re currently driving.

More expensive repairs constituted 8% of total repair orders in 2023. This group typically represented older vehicles because their repair orders were over $1,500. Often, these vehicles are tougher to sell at retail when they are traded or sold to the dealership. These are the ones that go straight to auction, but with the reduced amount of used inventory in the market, these vehicles have done better as retail pieces. The number of cash buyers has also increased, and these kinds of cars have been appealing to those buyers.

Overall, we are seeing a steady increase in service customers interested in what their car is currently worth. It makes total sense as these vehicles are aging and costing these owners more and more.

Written on February 20, 2024

Written by Alex Snyder

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