Auto repair costs are skyrocketing, driven by a combination of tariffs, vehicle aging, and rising labor costs. While the Trump administration’s tariff policies have kept new car prices relatively stable, repair costs are surging, placing a direct burden on American households.

According to the Consumer Price Index on the 22nd, auto repair costs jumped by a staggering 5% from July to August, marking the largest monthly increase on record. Compared to a year ago, repair costs have risen by 15%.

▲ Tariffs: The Trigger for Soaring Imported Parts Prices
Tariffs on imported vehicles and parts already amount to billions of dollars. With most aftermarket parts being imported, they face tariffs of up to 25%. Skyler Chadwick of automotive data firm Cox Automotive emphasized, “It’s undeniable that tariffs are having an impact. There’s virtually no vehicle made entirely with U.S.-sourced parts.” Even repairs for American-made cars often require parts from Mexico or other countries, making price increases inevitable. He noted, “Parts prices have risen tremendously. Some lucky drivers might use U.S.-made parts, but most have to bear the 25% price hike on components.”

▲ Vehicle Aging and Replacement Demand
However, tariffs aren’t the sole driver of rising repair costs. Chadwick pointed to the aging of vehicles on the road as a significant factor. With new car prices near historic highs and high loan interest rates, consumers are increasingly opting to keep their vehicles longer rather than replace them. The average vehicle age in the U.S. rose from 12.6 years in 2024 to 12.8 years in 2025, a 0.2-year increase. “This level of increase is unusual,” Chadwick said, noting that older vehicles require costly repairs like transmission, suspension, or engine rebuilds. Patrick Anderson, president of Anderson Economic Group, added, “When consumers perceive new cars as too expensive, they spend more time and money repairing their existing vehicles.”

▲ Technician Shortages and Rising Wages
Another issue is labor costs. Chadwick highlighted that “nearly 60% of repair costs come from labor,” with technician shortages driving continuous wage increases. According to the Labor Department, auto repair labor costs rose 7% from 2023 to 2024. The growing complexity of vehicles, requiring more time and expertise for repairs, is also fueling the surge in repair costs.

▲ Rising Used Car Prices and Loan Burdens
Rising repair costs are intertwined with the broader pricing structure of the auto market. According to Edmunds, the average transaction price for new cars in August was $48,365, up more than 30% from 2019. Used car prices have also risen 26% over the same period, with vehicles under three years old seeing a 40% increase. Over 15% of monthly payments for new car loans and leases now exceed $1,000, a record high, while 30% of used car buyers face monthly payments above $600. The combination of high vehicle prices and loan interest rates is pushing consumers to repair aging vehicles rather than purchase new ones.
▲ Persistent Pressure on Repair Costs
While automakers have absorbed some tariff impacts to keep new car prices in check, controlling parts prices and repair costs is proving challenging. The global dependency on parts supply, vehicle aging, technician shortages, and increasingly complex vehicle designs are likely to drive repair costs higher in the future. Chadwick warned, “The technician shortage is a serious issue, and labor costs will continue to rise.”

By Hongyong Park