Thursday, February 20, 2014
Body Repair Prices, Auto Insurance and Inflation
The most recent government figures on inflation through December 2013, show the cost of auto insurance increased 3.34 percent versus 2012. Auto insurance prices started the year 4.93 percent higher in January 2013 than 2012 and increased to 5.22 percent higher in February 2013 versus the same period in 2012. Since then, however, the rate of increase, when compared each month to the same month a year previous, has declined.
The consumer price for auto body work climbed at a fairly uniform pace throughout the year with the overall increase for auto body work recorded in December at 2.12 percent above the same period in 2012. Overall inflation, as represented by the United States Bureau of Labor Statistics Consumer Price Index (CPI) for all items rose 1.50 percent over the past twelve months to December 2012.
The Inflation Comparison chart below shows the relative percentage increase of body work, auto insurance and the Consumer Price Index (CPI) All Items over the past 12 months.
Looking at the chart of relative inflation, the consumer price of body work ended the past 12 month period slightly ahead of overall inflation. The overall CPI number is intended to represent all goods and services purchased for consumption from over 200 categories.
The inflation index for body work now stands at 273.5, compared to 233.0 for CPI and 428.6 for auto insurance. The baseline period is 1982-1984.
The average month over month increase for bodywork over the past year has been 0.18 percent while the overall CPI figure has increased at an average monthly rate of 0.12 percent. The price of auto insurance increased an average of 0.28 percent each month over the past year.
The chart below shows the cumulative price increases represented by all three indices since Jan 2009.
Overall CPI has risen 10.37 percent, body work 11.05 percent, and auto insurance is up 22.04 percent over the past four years. For comparison, the BLS reports that over the same period the cost of new cars has risen 6.43 percent, motor vehicle repair costs have risen 9.13 percent, and motor vehicle parts and equipment costs are up 9.18 percent.
From the beginning of 2009 through December 2013, the consumer price for body work has increased an average 2.19 percent each year. This is slightly above the overall CPI which has increased at an average annual rate of 2.08 percent. Auto Insurance, according to the BLS, has increased at an average annual rate of 4.12 percent since the start of 2009.