Toronto, Ontario -- Canada’s auto collision repair software market is expected to more than double in size over the next decade, a new report has found.
The segment is expected to rise from US$1.5 billion in 2024 to US$3.2 billion by 2033, according to a new report from Verified Market Reports. This equates to a compound annual rate of 9.2 percent between 2026 and 2033.
Researchers say this is being driven by a combination of regulatory pressures, insurance trends and technological innovation. Analysts point to Canada’s sizable and growing vehicle fleet -- which reached above 25 million in 2024 -- as a foundational factor. Increases in accident-related insurance claims, which were up 5.2 percent from 2020 to 2023 across the nation, are also fuelling demand for more streamlined, digitally enabled repair services.
Canadian shops and insurers alike are showing increasing interest in AI-powered software for damage assessment and estimating. Analysts expect these tools to make up 35 percent of the market by 2026, as integrated, cloud-based systems become the norm. Repairers are also benefiting from connected vehicle technologies, which allow telematics data to be factored into the repair and claims process in near real-time.
By 2028, connected vehicle penetration in Canada is expected to reach 50 percent, strengthening the business case for all-in-one software systems capable of integrating diagnostics, customer communications, repair timelines and parts ordering. Insurance companies are playing a major role in this transition, as their partnerships with collision centres increasingly favour shops that can reduce claim turnaround time. The report also notes that collaboration between insurers and repairers has already cut processing times by a quarter.
The federal government’s support for digital tools in the automotive repair space is also set to drive adoption even higher. By 2027, software usage in repair facilities is projected to rise by 40 percent, backed by public funding and broader policy shifts toward modernization and consumer transparency.
Altogether, the report paints a picture of a market at an inflection point, where shop owners who embrace digital tools could benefit from greater efficiency, stronger insurer relationships and improved customer satisfaction.
