Economic Trends Impacting Collision Repair Industry in 2019
Sept. 12, 2019—The strength of the U.S. economy continues to impact consumer behaviors, driving patterns, and thus, the trajectory of the auto claims and collision repair industries. In the recently released 2019 Mitchell Industry Trends Report for the third quarter, Ryan Mandell, director of claims performance for Mitchell's auto physical damage unit, shares the 2019 economic trends impacting the industry.
The current state of the economy is fueling the American consumer to spend more on their vehicles and drive them more frequently and for longer distances.
With wage growth comes increases in personal income and subsequently, increases in discretionary spending. A steady trend away from traditional passenger cars and toward costlier SUVs, CUVs, and light pickup trucks has been underway for several years, to the point where such vehicles account for over 70 percent of new vehicles sales in the first half of 2019. This trend is reflected in Mitchell’s claims data as well, with approximately 47 percent of non-comprehensive claims in Q2 2019 being attributed to SUVs, CUVs, and light trucks, compared to approximately 45 percent in Q2 2018.
These vehicles are holding their value more consistently.
ADESA reports that for June 2019, wholesale CUVs, SUVs, and light trucks increased in value by 5.7 percent compared to 1.6 percent for traditional passenger cars. This increase in used vehicle value means a higher threshold for a vehicle to be deemed a total loss, and thus, the margin for repair is increased.