Component failures rather than major breakdowns risk triggering customer frustration and bill shock, warns Warranty Solutions Group (WSG).
Its analysis of more than 20,000 warranty claims paid during 2025 shows the biggest ownership pain points are no longer dominated by catastrophic failures such as engines and gearboxes.
Instead, claim volumes are increasingly led by routine components, including battery-related faults, ABS wheel speed sensors and water pumps, where the cost of repair has risen sharply.
WSG said what would previously have been a £200 to £300 repair is now routinely generating invoices of £500 to £1,000, as labour inflation, higher diagnostic requirements, parts pricing and vehicle complexity combine to escalate bills.
“The real shift isn’t about quality – it’s about cost exposure,” said Martin Binnee, operations director at WSG. “The fastest-rising repair bills are coming from faults customers still think of as trivial. What’s changed is the cost environment around those repairs.
“Labour rates are higher, diagnostics are more complex, and parts availability is tighter. That means small issues are escalating far more quickly, catching owners off guard and putting dealers in the firing line when expectations don’t match reality.”
WSG said average workshop labour rates rose by around 5% year on year in 2025, adding cost across most repair categories, even where published labour times have remained stable.
It said higher hourly rates are adding £20 to £40 to many routine jobs, with diagnostic-heavy work hit hardest. WSG cited examples including average labour costs of £255 for alternators, £192 for O2 sensors, and ABS sensor diagnostics regularly exceeding £90.
The impact is most acute, it said, in the four- to seven-year-old parc, where vehicles are typically outside manufacturer warranty but still dependent on costly OEM components and complex repair processes.
“This age bracket has become the perfect storm,” Binnee said. “Owners assume they’re in the ‘safe middle’ of ownership, but financially that’s no longer true. These cars are packed with technology, yet no longer benefit from manufacturer cover, which makes them far more exposed to unexpected bills.”
WSG said modern vehicle complexity, including ADAS, emissions systems and networked electronics, is also increasing claim frequency.
While it said the trend does not necessarily indicate poorer build quality, WSG argues it is widening the gap between consumer expectations and real-world ownership costs, which dealers increasingly have to manage at point of sale and in service.
In a separate consumer survey, WSG said 75% of drivers reported motoring costs rose significantly in the past year, almost 40% said they could not cover a £400 – £500 repair without borrowing, and more than one in three said they were driving less or delaying maintenance.
WSG said that behaviour is feeding higher failure risk and deferred servicing, which can return to dealerships as disputes, goodwill requests and lower retention.
“For dealers, reliability is no longer just a technical measure,” Binnee said. “It’s a financial one. Customers are far more sensitive to unexpected costs, and how those costs are handled can make or break long-term trust.”
“Modern cars may last longer, but they are unquestionably more expensive to own. Dealers who recognise that shift and help customers manage it will be best placed to protect margins, relationships and reputation in 2026.”