As such, there are growing concerns that more motorists will put off essential vehicle maintenance and servicing to save money – with the dangerous consequence of unsafe or unreliable cars on the road.
We've spoken to industry insiders to understand how much extra it could cost drivers this year...
Why car repair costs are rising
Repairs are increasingly costing garages more and the rises will almost certainly be passed onto motorists via hiked bills, experts told us.
Three quarters of vehicle repairers have reported rising costs as the most significant challenge of 2024, The Motor Ombudsman's annual survey of independent garages and franchise dealers found.
This comes following an all-time expensive year for car repairs in 2023.
'The cost of repairs jumped 32 per cent in the third quarter of 2023 to a quarterly record of £1.6 billion', a spokesperson from the Association of British Insurers confirmed.
Rising operational costs, taxes and energy are the biggest three factors, with the increased cost of spare parts and workforce shortages completing the top five.
Garage owner and star of TV series Dave's Repair Lot, Hannah Gordon, told This is Money: 'The motoring sector like with all sectors is struggling with rising costs through materials, utilities and wage costs.
'The concern is that if outgoings continue to rise then we will be forced to put labour rates up.'
It's not just annual increases either; costs are rising for garages by the quarter.
The Association of British Insurers (ABI) reported from Q2 to Q3 there was a 16 per cent rise in materials, 15 per cent in labour and 46 per cent in other costs (the majority driven by the price of energy).
RAC spokesperson Rod Dennis called it a 'disastrous combination.'
While 54 per cent of garages told the Motor Ombudsman they are trying to avoid passing on higher operational costs to customers, most say they're faced with little option but to reflect some of these costs in the price they charge.
This is something Gordon echoes saying: 'It's a last resort having to pass these onto customers.
'We don't want to give customers growing bills but we also have to factor in that we are a business - it's a complete juggling act with outgoing and incomings to ensure we still provide value for money.'
Why higher repair costs could mean premiums rise
The rapid rise in vehicle repair costs is one of the biggest causes for escalating car insurance premiums.
Vehicle repairs require large amounts of power, and unlike households, businesses aren't entitled to any government support. Gas and electricity bills for car repairers rose by a staggering 300 per cent last year, with garages paying the full price of this.
The average energy cost per repair was £70. Not all of this can be absorbed by insurers, so it's passed onto consumers as increased premiums. This is just one example.
A 2022 study from EY highlighted that for every £1 motor insurers received in premiums, they paid out £1.10 in claims and operating costs.
'Insurers continue to face significant and sustained cost pressures beyond their control, including the cost of repairs which jumped 32 per cent in the third quarter of 2023 to a quarterly record of £1.6 billion', the ABI relayed.
Martin Milliner, claims director at LV, cited this 32 per cent jump as a key reason for the UK car insurance market 'experiencing both a rise in the number of claims and a significant increase in how much they cost to resolve'.
Jumps like this mean there's only one way premiums are going -up. And quickly.
Research from Compare the Market has shown a 52 per cent increase year-on-year in premiums.
'The previous rapid rise in inflation will have likely impacted many areas of the motor repair industry including the cost of spare parts, energy, and hiring specialist mechanics.
'It is a possibility that insurance premiums could rise further', Anna McEntree, Insurance Expert at Compare said.
While both LV and Compare the Market assured us that they are doing everything possible to keep costs low and manage the situation, premiums are already predicted to go up at least 10 per cent this year.
Rising repair costs could lead to more dangerous cars on the road
With the cost to repair and insure vehicles set to rise again in 2024, there are growing concerns that there will be an increase in the number of drivers avoiding essential car servicing and maintenance in a bid to cut back expenditure during the cost of living squeeze.
As of last year, 53 per cent of businesses had witnessed customers avoiding bringing in their car to reduce the level of spend on their vehicles, the Motor Ombudsman's lastest survey found.
Gordon saw this first hand, telling us: 'Over the past year we found a cut in people getting repairs done. To save money they will often ask for the bare minimum of repairs just to get their vehicle through an MOT or back on the road.'
And garages predict this will continue, with 54 per cent foreseeing consumers putting off essential repairs and 49 per cent routine maintenance as household finances remain under strain.
James Hosking, managing director of AA Garage Services agreed: 'When household budgets are stretched, car owners are tempted to stop servicing their vehicles altogether and run the gauntlet of 'fix when necessary.
'With repair costs rising, gambling on your car remaining damage free is a high-risk game.'
The most common age group to put off repairs was young people between the ages of 17 and 24, the RAC found.
'Unsurprisingly it's youngest drivers who are being hit the hardest hit, with a quarter (26 per cent) of those we surveyed last year telling us they'd deliberately put off paying for vehicle repairs due to the cost-of-living crisis', the motoring group's spokesman Rod Dennis told us.
In the long run this doesn't save money because the longer a problem is left, the more expensive it becomes to fit. Vitally it can also be highly dangerous and potentially illegal.
The RAC says: 'It's vital drivers recognise they have a legal responsibility to look after their cars and keep them roadworthy, even if they've passed their MOTs.
Any driver that doesn't, runs the risk of fines and up to three points on their licence for each fault discovered […] Any driver with penalty points on their licence faces higher insurance premiums for years as well.'
The RAC, AA and ABI are unanimous that the safety implications to yourself and others, as well as the mounting repair bills from delayed maintenance categorically should not be ignored.
So, making sure you are getting the best quote by shopping around is the first point of call.
Halfords has warned drivers they could be over-paying by going to the official dealership.
While 54 per cent of drivers it surveyed confirmed they'd been told their vehicle must be serviced at the official dealership to protect the warranty, they are under no obligation to do – the warranty will not be void.
Some places also offer interest free payments on repairs.
Free safety checks and brake checks from providers like Kwik Fit or Halfords can alert you to any issues before they become expensive to fix or unsafe.