Record High Labor Rates in Auto Repair Shops Impacting Consumers

The cost of auto repairs has surged significantly over the past few years, with labor rates in workshops reaching unprecedented levels. According to the German Insurance Association (GDV), the average hourly rate for mechanical, electrical, and bodywork repairs has now surpassed EUR200 for the first time. In 2024, these services averaged EUR202 per hour, while paintwork costs even reached EUR220 per hour, representing an almost eight percent increase from the previous year.

This upward trend in labor costs has been notable since 2017, with rates in auto repair and paint shops climbing by approximately 50% over this period. In stark contrast, the overall inflation rate during the same timeframe was only about 24%. The rising costs of auto repairs are contributing to a significant increase in average car damage claims, which rose to approximately EUR4,250 in 2024--up seven percent from the previous year and nearly 60% higher than the average of EUR2,700 in 2017.

In addition to escalating labor fees, the costs of replacement parts are also on the rise, further driving up the total expenses incurred by consumers when their vehicles require repairs. This trend has had a noticeable effect on the financial health of auto insurers, which are now compelled to adjust their insurance premiums in response to the higher repair costs.

Data from the Federal Statistical Office corroborates the findings from the GDV, indicating that the inflation rate for vehicle maintenance and repairs has approached 48% from January 2017 to December 2024. This figure encompasses all vehicle repairs, including those paid for privately.

The continuous rise in repair costs has not only affected consumers directly but has also led to increased insurance premiums, impacting the affordability of vehicle ownership. As the costs associated with maintaining and repairing vehicles continue to climb, consumers may need to reassess their budgets and insurance coverage options.