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Despite billions in tariff costs for imported autos and parts, new car prices have stayed relatively flat. But the news isn’t as good for car owners taking their vehicles to the repair shop.
The price of car repairs jumped 5% just from July to August, according to the latest Consumer Price Index, the government’s key inflation measure. That’s the largest one-month increase on record, and the cost of repairs is now up 15% compared to a year ago.
But despite what you might think, it’s not just tariffs driving up the price of repairs. That’s even though tariffs, which are a US tax on imports, took effect on all imported parts in May.
“There’s quite a few factors,” said Skyler Chadwick, director of product consulting, Cox Automotive.
The growing age of vehicles on the road, a technician shortage lifting wages in the sector, and more complex vehicles are also to blame, Chadwick said.
Tariffs are definitely part of the reason Americans are paying more at the shop – auto parts, especially after-market parts used in repairs, are primarily imported and therefore subject to tariffs of 25%.
“Do I believe tariffs have been an impact on this? You betcha,” Chadwick said.
He points out that there’s no US-made car with 100% American parts. So even if your American-made car needs maintenance or repairs, there’s a good chance the part is going to be coming from Mexico or somewhere else overseas.
“The cost of parts has gone through the roof because we have to pull those parts in from other parts of the world,” Chadwick said. “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 manufacturers have done their best to keep new car prices little changed, often by absorbing much of the tariff cost themselves.
That’s partly to avoid angering the Trump administration, especially as automakers have gotten breaks on regulations. That includes the elimination of potential fines they used to face for violating emissions rules, the threat of which forced them to spend billions on regulatory credits to greener automakers. Those fines were repealed as part of the Republican party’s tax and spending bill passed this summer.
Car companies also know that car prices are already near record levels. Affordability is a major concern for car buyers, especially with the current high rates for car loans.
“Automakers have been extremely reluctant to let consumers see the cost of tariffs show up in sticker prices,” said Patrick Anderson, president of the Anderson Economic Group, a Michigan-based think tank.
But there’s less pressure to keep the prices of car parts in check. That’s because there’s less attention paid directly to them, and also because owners aren’t able to shop around for better prices on the specific part a car might need.
Beyond tariffs, a primary issue driving up the price of repairs is the fact car owners are hanging onto cars longer than they have in the past, Chadwick said. The high price of new cars, and growing economic uncertainty, is prompting many to grit their teeth and pay for repairs rather than buy a replacement.
“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 said. “That’s actually quite a big jump. We haven’t seen a jump like that in quite some time.”
The increased age of vehicles on the road means most repairs will be pricey, Chadwick said.
“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 high interest rates, are keeping car buyers on the sidelines, and car repair shops busy.
The average transaction price of a new car in August was $48,365, according to car buying site Edmunds. That’s down 2% from December’s record high, but up $11,400, or more than 30%, from August 2019. Used car prices on average are also up 26% over the same period, with the price of the lower-mileage cars that are three years old or younger up 40%.
And that is before high interest rates on auto loans are factored in, which have resulted in huge car payments for many borrowers. More than 15% of all new car payments, including both loans and leases, are more than $1,000 a month, a record share, according to Experian. More than 30% of used car buyers are paying $600 a month or more.
“When consumers find new vehicles more expensive, they spend more time and money repairing existing vehicles,” said Anderson.
Labor costs also can make up about 60% of the asking price of repair, Chadwick said. And a shortage of qualified repair workers is raising those costs, especially as cars are increasingly loaded with more advanced technology.
The most recent data from the Labor Department showed 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 said.
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