Collision Repair Industry Insights for 2026

The collision repair industry is navigating a 2026 landscape shaped by tariff changes, rising technology costs, and evolving repair practices. According to a new analysis by Mitchell, these factors are influencing part usage, repairability, and total loss patterns, offering valuable insights into future trends.

Ryan Mandell, Vice President of Strategy and Market Intelligence at Mitchell, has been examining how these developments impact repair decisions and cost dynamics. In a discussion with Claims Journal, Mandell emphasized the necessity of focusing on operational efficiency and profitability, particularly in light of reduced repair volumes. “When volumes decline, it highlights the need to concentrate on margins,” Mandell stated.

The study revealed that rising deductibles and varied coverage choices are prompting consumers to avoid filing claims for minor damages. Deductibles have increased by 3.25% in the U.S. and nearly 8% in Canada, encouraging policyholders to consider paying out-of-pocket or skipping repairs altogether. This shift forces repair shops to enhance repair efficiency, leading to a preference for repairing components over replacing them. For the first time in a decade, the percentage of repaired parts has increased.

In the U.S., repairability rose by approximately 1% in 2025, with Canada experiencing a slight increase as well. This trend favors labor margins over parts margins, as repairing parts generally offers higher labor returns and improves cash flow. Mandell noted that advancements in vehicle materials and technology, such as aluminum and carbon fiber construction and radar-equipped systems, have made repairs more complex and costly. Calibration for vehicle technology is increasingly necessary, impacting repair cycle time.

Tariff adjustments and shifts in manufacturing locations have the potential to disrupt parts availability in 2026. Mandell explained that these changes could result in temporary gaps. As companies relocate production to the U.S. under tariff pressures, a lag in parts availability may occur, affecting repair planning and execution.

Mitchell’s report also observed strong salvage returns influencing total loss determinations, with vehicles more frequently being written off rather than repaired. Flexibility in sourcing and repair strategies will be crucial in 2026. Mandell advised operators to diversify parts sources and consider repairing more components to mitigate potential disruptions.

“The complexity of vehicles is increasing, and insurer expectations are not diminishing,” Mandell concluded, highlighting the need for precision and adaptability in the repair industry moving forward.