One day not too long ago at Jay's Auto Repair in Detroit, Michigan, cars overflowed into the shop's parking area as mechanics struggled to fix the excess of vehicles left to them by customers. These vehicles were in serious need of repair.
It seemed the new normal was here, and it involved most car owners trying desperately to hang on to their aging automobiles and SUVs during a time when the purchase of a new or used vehicle saw prices surge out of control.
"This past year has been nonstop," Jay S., owner of Jay's Auto Repair, said. "We are surprised at how busy it's been and how crazy it's been. We've been so short-handed trying to get enough help that we can't keep up with the volume. It hasn't died out."
Improved Car Quality Equals Longer Life Span
There is an excellent reason Jay's volume continues to grow. Experts say that cars and trucks have stayed on the road longer due to the improved quality of vehicles over the last decade and a half. According to data provider IHS Markit, the average age of cars in the United States has hit a record high of 12.1 years.
Now, the global semiconductor deficit has pinched auto production as demand revives from the lows we saw throughout the pandemic, elevating prices for all vehicles and forcing owners to spend more on repair services to keep their current cars operating and on the road.
That means more business at repair shops — if they can find the help.
The typical price of a new car totaled $40,948 in August, up 5% from June 2020. Used car prices have been climbing at an even faster pace. The average price of a 9-year-old used car was $13,252 in August, up 29% from $10,226 in June 2020.
Higher Mileage; More Repairs
Drivers had become more comfortable keeping a higher-mileage car during the recession in 2008 when job losses and the housing crisis forced many to hold onto their vehicles longer. It's no surprise that car owners hunkered down again during the pandemic and efficiently took their older vehicles past the 100,000-mile marker.
At Jay's Auto Repair, most vehicles that come in for repair are models from years 2011 to 2017; Jay said: "That's the majority of our work right within that range, but we do see a lot of '07s and '08s still on the road, and people still put money into them."
Many auto repair professionals believe that people might still be putting money into their vehicles from the $1,400 federal stimulus payments distributed this spring. The increase in wages resulting from the labor shortage has helped, too.
Buy Now Pay Later Financing
Even if that money is gone, customers have new ways of financing repairs these days.
They might utilize a financing platform with a buy now, pay later component like Credova. These new point-of-purchase financing platforms offer customers financing to purchase anything from furniture to power sport vehicles. Credova can even assist with financing a consumer's auto repair needs. Then, they can pay off the entire balance over several months, depending on their finance agreement.
Use Credova for Auto Repair Financing?
Buy now, pay later financing platforms like Credova offer a tangible way to pay for repairs without acquiring the astronomical interest charges that using a credit card would cause. By paying Credova in small monthly installments over a fixed period, car and truck owners avoid credit card debt altogether and get to keep driving.
Whether car owners are using the remnants of a spring stimulus check, a financing opportunity like Credova or money loaned to them by their grandmother, they can fund these car repairs, so they are taking care of it now. Like most auto repair shops across the nation, Jay's Auto Repair in Detroit sees the line of vehicles seeking their services getting longer. What else can they do but thank their lucky stars and roll themselves under the next 2008 Ford F150 in line and go to work?
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