Inflation drives up auto maintenance costs in Canada

Canadian vehicle owners are facing rising costs for maintenance and repairs as inflation continues to impact the automotive aftermarket.

The J.D. Power 2024 Canada Customer Service Index—Long-Term (CSI-LT) Study found that the average cost of a dealership visit has climbed to $465, up from $432 a year ago, a 7.6 per cent jump. Similarly, visits to independent shops have increased, but at a lower rate to $273 from $262, up 4.2 per cent.

The study observed that macro-economic conditions and higher interest rates are not only driving up costs but also prompting owners to keep their aging vehicles longer. According to the study, 40 per cent of visits to dealerships and 24 per cent of visits to aftermarket shops were for repairs, compared to 31 per cent and 21 per cent, respectively, in 2021.

This trend, J.D. Power noted, indicates that more owners are choosing to invest in repairs rather than purchasing new vehicles.

“With inflation pushing auto repair costs upward and interest rates making larger-ticket items like mortgage payments and new-vehicle purchases more expensive, owners are being hit with a ‘double whammy’ and have to make different decisions in order to balance their budgets,” said J.D. Ney, automotive practice lead at J.D. Power Canada. “As more owners opt to fix their vehicle instead of buying a new one, auto repair shops have an opportunity to attract more lucrative business in this $13 billion market by excelling in the service factors that drive customer satisfaction, mainly saving time and convenience.”

The study also noted that saving time and convenience are key factors affecting customer satisfaction. Completing service within 90 minutes and a speedy send-off, including paperwork and key pick-up, are the two performance indicators that have seen the most significant increase in importance year over year.

Dealerships continue to dominate the auto service and repair market, holding nearly half (48 per cent) of the market share. Independent shops and quick lube locations capture 27 per cent and 11 per cent, respectively. These market shares have remained almost unchanged from 2023, the report noted.

Average annual visits also remain steady, with 1.6 visits per year in the dealership segment and 1.3 in the aftermarket segment, up from 1.2 in 2023.

With an average cost of $465 per visit, dealerships account for 61 per cent of the auto service market’s total revenue, while the aftermarket segment captures the remaining 39 per cent. These proportions have remained consistent since 2023.

On a 1,000-point scale, Great Canadian Oil Change (838) ranked highest among aftermarket service facilities, followed by Jiffy Lube (834) and Midas (813).

Image credit: Depositphotos.com

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