Used-car maintenance costs are frightening consumers this Halloween, as ghosts of the past can come back to haunt them…
Research by Warrantywise, in conjunction with YouGov, has found that 68% of drivers who expressed concerns about their car cited the potential for breaking down more often. This sent shivers down their spines, especially when thinking about higher repair prices amidst the cost-of-living crisis.
Despite this worry, nearly 78% of the 2,000 respondents stated they do not protect their car with an extended warranty, leaving them at the mercy of high repair costs when it comes to used-car maintenance, especially an issue when the full vehicle history cannot be verified.
The automotive industry is currently in a state of flux, with high energy prices and a challenging economic climate meaning costs are going up. Most businesses are unable to swallow these increases and are therefore having to pass them on in their used-car maintenance rates. The Warrantywise survey found that, on average, parts prices have risen by a hair-raising 9.3%, while labour rates are up a frightening 4.2% when compared with 2022. Some garages are reporting an all-time high when it comes to customer pricing.
Used-car maintenance is important
Alongside the increase in car parts and labour, the price of fuel and the basics, including food, utilities and mortgage costs and/or rent, still continue to creep. Recent news from the Organisation for Economic Co-operation and Development (OECD) said prices will rise faster in the UK than in any other advanced economy this year, coinciding with the British consumer price inflation (CPI) unexpectedly holding at 6.7% in September, mean the UK has the highest inflation in the G7 – a worrying statistic for drivers.
Rising interest rates and inflation mean that the cost of purchasing a used car is still at a premium. Recent reports by used car buying platform Auto Trader state that the average used car is currently priced at a petrifying £17,736, according to the firm’s Retail Price Index. These prices are 36% above the same period in 2021, and 45% above pre-pandemic levels in September 2019.
This wickedly steep escalation in upfront costs for purchasing a used car highlights the fact that it is becoming increasingly vital to consider investing in a warranty that can offer much-needed protection and financial security when it comes to used-car maintenance.
“Supply chain disruptions and global economic challenges have led to an increase in parts costs, hugely affecting the automotive industry at large. Used car owners are not immune to these higher prices, as sourcing and replacing components for ageing vehicles can be dearer than expected,” said Lawrence Whittaker, CEO of Warrantywise. “In the current economic climate, especially with the OECD’s worrying forecast that the UK’s inflation average will be the highest rate in the G7 group for 2023, extended warranties play a vital role in offering financial security and peace of mind to used car owners.
The UK’s car parc is continuing to age, with 66.5% of vehicles on the road older than seven years, and 29.8% of the total older than 12-years. Therefore, used-car maintenance is an important factor in buying considerations, and pricing of that needs to be taken into account. To remove the fright of high prices, a used-car warranty may be a sensible solution.
Expert arbiter at Warrantywise, Edd China, added: “Working with Warrantywise my goal is to educate and ensure that those who already have a second-hand vehicle or are looking to buy a car from the used car market have the peace of mind they are doing so with protection against unexpected repair costs.”
