If you’ve had a car repaired recently, you may have noticed that your bill was higher than usual. The same goes for rental cars. Many companies are charging higher fees to rent a vehicle, which of course adds to your costs if you need to rent a car while yours is in the shop.
Why are the costs of car repairs and car rentals rising? Do these rising costs affect auto insurance rates, and what can you do to minimize the hit on your pocketbook? Keep reading to find out.
Why Repair Costs Are Rising
The car repair industry, in particular, has been affected by parts shortages. With many parts in low supply, the continued high demand for these parts has caused prices to increase. Mechanics and repair shops are therefore paying more for auto parts than they were in the past. To keep their doors open, they need to raise their rates and cover these increases.
The car repair industry has also been affected by labor shortages. With labor in short supply, repair shops have to pay their employees more. This cost also gets passed on to their customers.
Why Rental Costs Are Rising
Rental costs are going up for some of the same reasons as repair costs. Labor shortages are affecting this industry, too.
Also, people who have their cars repaired are waiting longer for those repairs. This means they are keeping their rental vehicles longer, which means fewer rental vehicles are available. When there is a shortage of anything, prices tend to rise. In this case, there is a shortage of rental cars.
Repair Costs and Car Insurance
Because the cost of repairs is increasing, insurance costs are also likely to increase as well. While insurance companies are surely there to support their clients, they need to make adjustments. If the insurance companies are paying more for repairs, then they generally need to raise rates to account for these increased costs on their end.
If your insurance rates increase excessively, it is a good reason to contact your insurance agent. We work with multiple insurance companies; as an independent insurance agent, we compare rates between companies and set you up with the insurer who offers you the best rate. Although rates may rise across the board, some insurers will still offer better rates than others.
Rental Costs and Car Insurance
The increased cost of car rentals may also lead to increases in auto insurance premiums. This is especially likely if your policy includes rental car coverage.
Because you never know when you’re going to be in an accident, it’s often wise to keep rental car coverage on your policy, even if you have to pay a bit more for it. However, this is a good time to reach out to your agent and make sure the rental coverage you have is still adequate.
Most policies have a maximum rental term that is covered, such as three days. They also have a per-day maximum, such as $100. With recent changes in the rental car industry, your current coverage may not be adequate. To avoid having to pay out-of-pocket for rental costs, ask your agent to recommend a policy that has a higher term limit and a higher per-day rental coverage limit.
Of course, you hope to never be in a car accident. But sadly, accidents happen, and when they do, you rely on car repair, car rental, and insurance companies to get you through. With recent price increases in these industries, it is a good time to check in with your independent agent and explore different options. Contact us if you’re interested in learning more about insurance costs.