Toronto, Ontario -- Vehicle prices rose significantly faster than inflation in May, Statistics Canada has found.
In its most recent report on Canada's consumer price index, StatsCan found overall inflation rate held steady at 1.7 percent, while new vehicle prices were up 4.9 percent compared to the same time last year. Excluding energy, the CPI rose 2.7 percent.
There's two major reasons for vehicle prices rose so much faster than other goods. First, there is an increasing demand for electric vehicles, which are themselves more expensive than traditional fossil-fuel powered ones. Second, there are ongoing auto parts shortages which is being worsened by tariffs, and geopolitical uncertainty.
For collision repair businesses, that price spike is likely to have a tangible impact on overall performance. When the vehicles coming into repair bay are worth more, the cost to fix them -- and the value at which they’re written off -- changes. Insurers are now juggling larger claim values, which means repairers will face tighter scrutiny on estimates. This will place a premium on being able to provide detailed documentation to back up every line item.
The report was not all bad news for the collision business. With gasoline down 15.5 percent on a year-over-year basis, drivers are likely to spend more time on the road -- and in the repair bay.
