Automotive expert Mike Caudill offers valuable perspectives on electric vehicles and used cars in ‘The Bottom Line’. With millions of vehicle owners lagging in routine maintenance due to rising repair costs, it's a critical issue. Recent data from Carfax shows that over 30 million cars on the road are behind on oil changes and tire rotations. Neglecting these repairs is not only dangerous but also costly. For example, low or dirty oil can lead to engine failure and expensive repairs, while skipping tire rotations causes uneven wear and increases the risk of flats or blowouts. Paul Nadjarian, general manager of Carfax Car Care, emphasizes that well-maintained vehicles last longer, cost owners less over time, and are more valuable when sold.

Uncover the Truth about Vehicle Maintenance and Costs

Impact of Rising Repair Costs on Vehicle Owners

Millions of vehicle owners are facing the challenge of rising repair costs, which is causing them to fall behind on routine maintenance. This not only poses a safety risk but also leads to increased expenses in the long run. As Carfax data indicates, more than 30 million cars are behind on oil changes and tire rotations. The consequences of neglecting these repairs are significant, as low or dirty oil can cause engine failure, and skipping tire rotations leads to uneven wear and increased risk of flats or blowouts. It's crucial for vehicle owners to understand the importance of timely maintenance to avoid costly repairs in the future.

Moreover, the rising cost of repairs is affecting the overall ownership cost of vehicles. Well-maintained vehicles not only last longer but also cost less over time. This is an important aspect that vehicle owners should consider when making decisions about their vehicles. By staying on top of routine maintenance, owners can save money and ensure the longevity of their vehicles.

Delayed Repairs and Their Consequences

In addition to oil changes and tire rotations, owners are also delaying non-critical repairs such as air filter and cabin filter replacement and even electronic repairs. This delay is attributed to various factors, including the four-year inflation period along with high interest rates. These factors have hit the consumer's pocketbook, evaporating any free cash they may have. As a result, people are driving cars they purchased during the pandemic when inventory was scarce and car prices were inflated, pushing their monthly payments to unsustainable levels.

For instance, the Federal Reserve reported that auto loan delinquency rates rose substantially in September, surpassing pre-pandemic levels by the end of 2023. The average required monthly payments increased from about $470 in January 2020 to about $600 in January 2023. This increase in monthly payments is making it difficult for some vehicle owners to keep up with their loan payments, leading to a rise in defaults.

Market Factors Affecting the Used Car Market

The used car market is also facing significant challenges. Customer demand for cars should be higher, but issues such as COVID-19 and vehicle part delays have caused people to hold onto their cars longer. As a result, the average age of a car on the road has risen from 9.5 to 10 years before the pandemic to 12.5 years. This increase in the average age of cars means that they require more repairs, which become more costly.

Rohrman Automotive Group CEO Ryan Rohrman highlights the massive deficit in the used car market as another factor worsening the situation. With fewer young people choosing to buy or drive cars, seeking to avoid the financial burden, the demand for used cars is not meeting the supply. This imbalance is further straining the used car market and making it more difficult for both buyers and sellers.

The Trend of Deferred Maintenance

Jared Levy, chief markets strategist of Peak American Investment Advisors, points out a growing trend of 'deferred maintenance' among American auto owners. As budgets and free time become increasingly tight, many owners are delaying routine maintenance on their vehicles. However, it's important to note that there are also many people who are taking it upon themselves to perform routine maintenance or taking their vehicles to smaller shops that don't report data to Carfax.

This trend of deferred maintenance has implications for the overall health and value of vehicles. While some owners may be cutting corners to save money in the short term, it could lead to more significant problems down the line. It's essential for auto owners to be aware of this trend and make informed decisions about their vehicle maintenance to ensure the longevity and reliability of their vehicles.