Parts of the Vehicle Repair
By: Susanna Gotsch, Industry Analyst, CCC Information Services Inc.
Repair Costs Recover Post-Recession
The average total cost of repair for vehicle appraisals in 2013 was $2,638, up 2.9 percent from 2012.
This
increase is consistent with the increases seen year-over-year since mid-year 2009 when repair costs flattened. To
better understand the dynamics behind the change in average repair cost, in this article we will look in detail at one
of the largest components contributing to overall repair costs – parts. We will also look at how differences in vehicle
and part mix can drive the metrics typically used to measure parts utilization in the auto claims and collision repair
markets.
Repair Cost Dollar Distribution – The Parts That Have Changed
The distribution of repair cost dollars has seen little change over the last fifteen-plus years that this has been
tracked by CCC (see below). Over the last five years, total spend on replacement parts (pre-tax) has accounted
for 38 to 40 percent of the total vehicle repair cost.
Within the total dollars spent on parts however there has been a shift towards more alternative, non-OEM parts,
with the largest increase occurring within aftermarket parts. At the close of 2013, the industry’s share of
replacement part dollars was split at 63 percent OEM versus 37 percent non-OEM (see below).
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Parts of the Vehicle Repair
By: Susanna Gotsch, Industry Analyst, CCC Information Services Inc.
The Impact of Aging Fleet on Parts Utilization
Among the factors believed to be driving increased alternative parts usage are greater acceptance within the
marketplace for non-OE parts, increase in non-OE parts certification programs, expanded and improved distribution
network for non-OE parts, and an aging vehicle fleet. In previous articles, CCC has discussed the impact of the
aging vehicle fleet on appraisal costs, total loss frequency, and part utilization. In CY 2013, 42.2 percent of all
repairable appraisals were for vehicles 7-years plus. This percentage has grown each year, with the drop-off in
new vehicle sales that began in 2008 driving it up over eight percentage points since CY 2009.
Analysis of part utilization by vehicle age shows older vehicles typically have more alternative parts available to
them, and carriers and shops typically use more of them on older vehicles to help keep repair costs affordable – the
non-OE parts share of total replacement part spend for vehicles 7-years plus was nearly 50 percent in 2013.
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Parts of the Vehicle Repair
By: Susanna Gotsch, Industry Analyst, CCC Information Services Inc.
Because the total spend on parts as a share of the overall repair cost and the average cost per part tend to decline
as the vehicle ages, understanding what the trend for non-OE parts share of total replacement part count is also
important. As the charts above illustrate, there is a much larger difference in the OEM percentage of Part Amount
between vehicles current model year versus vehicles aged 7-years plus (90.8% vs 47.6% = 43.1% difference) than
in the difference in the OEM percentage of Part Count for those same vehicle age groups (88.8% vs 59.0% =
29.8%). Total spend per part type is a direct by-product of the number of each part type replaced as well as the
cost per part. Many factors have impacted both of these values over the last five years.
For example, parts utilization by part type can differ by vehicle age when looking at the percentage of appraisals
where at least one or more of a particular part type is used. As a vehicle age increases, the percentage of
appraisals with non-OE parts increases, with the largest differential among old and new vehicles for recycled parts.
In 2010, auto manufacturers had 91 new vehicle introductions in the U.S.; this number fell to 88 in 2011, but is
expected to reach 376 by CY 2015.1 As auto manufacturers ramp up their production of new models, there is an
inherent lag in the availability of non-OE parts particularly during its first one to two years of introduction.
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Parts of the Vehicle Repair
By: Susanna Gotsch, Industry Analyst, CCC Information Services Inc.
The table below shows the increase in the average number of part replacements per claim between calendar years
2009 and 2013, with the largest OE part increase for vehicles of current model year, and the largest increase for
non-OE parts for vehicles aged 4-6 years.
The following table does a similar comparison of the average price per OEM part and the average non-OEM part by
vehicle age from CY 2009 to CY 2013. While the average price dynamics can also be driven by the actual parts
selected as OE versus non-OE, and for non-OE’s the mix of parts by part type, the information is useful as it
demonstrates how change in part prices and part replacement counts can result in misleading trends for traditional
metrics used to measure parts utilization. For example, declining prices for non-OE parts while OE parts are
increasing might suggest lower overall non-OE parts utilization when looking at the metric Non-OE % of Total Part
Amount.
The difference in usage by age group points to the numerous factors at play when the appraiser is making the
decision per part on extent of damage, repair versus replace, part type selection, supplier, etc. If we look at two
specific examples – all front and rear bumper covers and all quarter panels for the top most 50 appraised vehicles the data points to significant differences in repair versus replace and part utilization by part type. So while
aggregate metrics across all appraisals help identify the overall trends in parts utilization, the differences in vehicle
mix and parts included in the appraisals can sometimes result in those aggregate metrics trending differently among
appraisers, offices, or geographic areas.
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Parts of the Vehicle Repair
By: Susanna Gotsch, Industry Analyst, CCC Information Services Inc.
This difference underscores the value of quality information at the time of the appraisal on parts availability, cost
differential between repair and replace, suppliers and certifications. Having this comprehensive information at the
time of appraisal, and then automatically verifying the decision made meets the guidelines in place for that company
ultimately creates a foundation for optimal parts utilization.
The information and opinions in this publication are for general information only, are subject to change and are not
intended to provide specific recommendations for any individual or entity. Although information contained herein has been
obtained from sources believed to be reliable, CCC does not guarantee its accuracy and it may be incomplete or condensed.
CCC is not liable for any typographical errors, incorrect data and/or any actions taken in reliance on the information and
opinions contained in this publication. Note: Where CCC Information Services Inc. is cited as source, the data provided is an
aggregation of industry data collected from customers that use CCC’s products or services and/or that communicate
electronic appraisals via CCC’s electronic networks.
1
Higgins, Tom. “For engineers and media, Hell is ideal proving ground.” Automotive News, September 6, 2013.
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