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.
Why your car has imported parts
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.
“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.”
Other factors driving up repair costs
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.