Collision Repair Industry in 2026: Trends and Predictions

Collision Repair Industry in 2026: Key Trends and Implications

As we enter 2026, the collision repair industry is navigating a transformed environment characterized by fewer vehicles requiring repairs and increased complexity in automotive systems. These factors, coupled with various cost pressures, are reshaping market dynamics. This overview highlights key trends impacting industry stakeholders, focusing on repairable claims, total loss trends, calibration requirements, tariff impacts, electric vehicle market shifts, and workforce demands.

Repairable Claims and Total Loss Trends

Kyle Krumlauf, Director of Industry Analytics at CCC Intelligent Solutions, reports a 10.4% decrease in repairable claims by August 2025 compared to the previous year, with total claims volume dropping 8.5% through July. However, total loss frequencies rose to 22.8% by October 2025, potentially setting a record for the second consecutive year. Contributing to the decline in repairable claims is a consumer trend towards higher deductibles, influencing the shift in repair shop dynamics as more customers handle repairs out-of-pocket.

Calibrations and ADAS Standards

In the third quarter of 2025, the industry saw an increase in Direct Repair Program (DRP) estimates requiring calibration, climbing to 35.6% from 26.9% a year earlier. A Revv benchmark study suggests a significant portion of vehicles entering collision repair require ADAS calibration, yet this need is often missed on estimates. This oversight poses substantial legal risks and underscores the necessity for standardization, prompting potential federal involvement through legislation such as the ADAS Functionality & Integrity Act.

Tariff and Supply Chain Impacts on Parts

Parts prices continue to rise, driven by tariff influences, with average increases exceeding 6% in late 2025. PartsTrader points out that tariffs are adding approximately $100 to the parts line of average repair orders. Larger shops report pronounced tariff effects, influencing operational costs. Additionally, OEMs face persistent pressure from semiconductor shortages, further complicating supply chain management within the collision repair sector.

Shifts in Electric Vehicle Market Dynamics

The expiration of the federal electric vehicle (EV) tax credit in September 2025 triggered a market shift, as electric vehicle sales plummeted and hybrid sales surged by November. Ford and other manufacturers are adjusting strategies, emphasizing hybrid technologies in response to changing consumer preferences and the higher repair severity associated with battery electric vehicles.

Skilled Workforce Demands

The industry faces a pressing need for skilled technicians, with an estimated shortage of nearly 1 million entry-level automotive professionals projected by 2030. Initiatives like the U.S. Department of Education's Workforce Pell Grant program and the ASE Connects initiative aim to address this gap by linking repair shops with training programs and offering financial aid for automotive education.

The landscape of collision repair in 2026 is set to evolve, with trends such as claims reduction, increased total losses, calibration needs, tariff impacts, and workforce challenges shaping its future. Market participants who stay informed and adapt to these changes will be well-positioned to navigate the complexities of the industry.