Vehicle repair costs through 2040: inflation is eating up the savings from modern safety technology

Anyone buying a new car today typically receives automatic emergency braking, lane-keeping assistance, and parking assistance as standard features. These systems improve road safety and reduce damage frequency, but they are not leading to noticeable relief for motor insurers. This is shown by the new trend analysis “Motor Insurance 2040 – Automated Driving & E-Mobility” published by the German Insurance Association (GDV). The reason is that additional technology makes vehicles more complex and therefore more expensive to repair, while spare parts and workshop services continue to rise in price.

“Technology is making driving safer, but not automatically cheaper. Over the past decade, the cost of spare parts and repairs has increased by an average of 3.7 percent per year — making it the strongest cost driver,” says Anja Käfer-Rohrbach, Deputy CEO of the GDV.

Inflation as a cost driver

The study examines how driver assistance systems, electromobility, and price developments will affect insurance claims costs through 2040. The findings show that cost pressure will remain high even under moderate inflation scenarios.

“Even if inflation only follows the ECB target of 2.0 percent per year, claims expenditure would still increase by 24 to 32 percent by 2040,” says Käfer-Rohrbach. If prices continue to rise at the same pace as in the past decade — 3.7 percent annually — claims expenditure would increase by 64 to 75 percent.

Driver assistance systems help — but only to a limited extent

There is no doubt that driver assistance systems make a measurable contribution to preventing accidents. By 2040, the number of claims is expected to decline by 9 to 14 percent. Excluding inflation, claims costs are projected to decrease by 6 to 12 percent.

Three systems are particularly effective: Parking assistance systems that prevent damage while maneuvering by automatically braking to avoid collisions with obstacles. Automatic emergency braking systems, as they reduce rear-end collisions by independently applying the brakes when a collision is imminent. Lane change assistance systems, to reduce blind-spot collisions by warning drivers when changing lanes. 

However, the impact on comprehensive motor insurance remains limited: windshield damage, theft, storm damage, and hail damage cannot be prevented by driver assistance systems. As a result, claims expenditure in comprehensive coverage is expected to decline by only 0 to 5 percent.

In addition, increasing sensor technology comes at a price of its own. Cameras, radar systems, and control units further increase repair costs. Replacing a windshield in vehicles equipped with driver assistance systems, for example, costs around 15 percent more because sensors must be replaced and recalibrated.

“Overall, repair costs will rise by an additional 4 to 5 percent through 2040 solely due to added vehicle technology — regardless of general inflation,” says Käfer-Rohrbach.

E-Mobility is changing the claims landscape

Electromobility is also changing the claims landscape and is expected to gain significant importance: by 2040, nearly 60 percent of all privately insured passenger cars could be electric vehicles.

Currently, repairs following a collision are around 10 percent more expensive for electric vehicles than for combustion-engine cars. GDV experts expect that increasing experience and larger production volumes will reduce this premium to around 5 percent by 2040. Nevertheless, a lasting additional cost burden is likely to remain.

About the trend analysis

This is the third time the GDV has published its trend analysis. The current edition is based on data as of December 31, 2025, and for the first time expands previous analyses to include two key topics: the transition to electromobility and illustrative inflation scenarios.

The analysis focuses on how modern vehicle technology affects claim frequency and repair costs, and what consequences this will have for motor insurance.

The calculations are based on studies by accident researchers and traffic experts, GDV claims data, and assessments by an interdisciplinary panel of experts from engineering, accident research, and the insurance industry.

The study examined six driver assistance systems and automated driving functions — ranging from parking assistance systems to highway pilot functions — as well as their gradual adoption into the vehicle fleet through 2040.

You can find the full analysis below (in German)