What exactly does 2026 have in store for shops, and how can you navigate the market? 

It all starts with the vehicles. In recent years, vehicle technology advancements have created challenges across the mechanical and auto body worlds. While federal incentives related to electric vehicles (EVs) expired last year, cooling the demand for these sustainable vehicles, projections still suggest that over a quarter of new passenger vehicle sales could be electric in 2026, necessitating that shops continue to invest in the tools, equipment and training necessary to repair EVs. 

This increasing complexity can also be seen in internal combustion engine (ICE) vehicles which include more embedded electronics, integrated components and a higher number of ADAS features. All of these computerized systems require calibrations during the repair process. “Scans appeared on nearly 88 percent of DRP estimates, while calibrations rose to more than 35 percent – both notable year-over-year increases,” according to CCC Intelligent Solutions’ 2025 Q4 Crash Course Report (available at cccis.com/reports/crash-course-2025/q4). “Repairers have had to adjust workflows, invest in new tools and training and coordinate more tightly with insurers as the electronic and software components of repairs expand.”

Rising costs associated with repairing complex vehicles has led to an increase in total losses, with frequency in 2025 rising to 22.8 percent from 22.1 percent, CCC reports, noting that this is “driven by the increased age of vehicles, a decline in lower severity claims filings and the accumulation of advanced electronics that often tip borderline repairs toward total loss decisions.”

Despite more vehicles being declared total losses, new vehicle sales have seen a downturn in recent months as tariffs on imported vehicles have increased costs by as much as $6,000 on vehicles priced under $40,000. This has caused many consumers to turn to the used car market, though the low inventory of pre-owned vehicles creates its own set of challenges. 

With inflation continuing to contribute to increased costs, more drivers are inclined to maintain the vehicles they already own; experts predict that consumer spending will slow down in 2026. This could be great news for mechanical shops as vehicle owners will likely be more willing to invest in vehicle maintenance…assuming they are properly educated on how that will benefit them in the long run. But the cost of repairs can be a detriment to their decision as well. The 2025 Cox Automotive Service Industry Study discovered that consumers are more likely to consider trading their vehicle in if the repair cost exceeds $3,195. 

On the collision side, ever-increasing insurance premiums may make drivers more reluctant to file claims with their insurers, leading them to ignore the need for what they see as minor cosmetic repairs. For shops to thrive in 2026 and beyond, there is a great need to educate consumers on their vehicles and help them understand what is going on beneath the hood, beyond what their eyes may see. 

That need for education begins at home with shops investing in acquiring training for their technicians to perform repairs properly, according to OEM procedures, as well as by ensuring repair planners and service advisors are equipped with the knowledge to explain the needed repairs or maintenance items to customers. 

After the sale, it’s also vital that shops exceed customers’ expectations in terms of communications, transparency and timeliness of repairs. Losing their vehicle while it’s in the shop presents a major inconvenience for most drivers, so utilizing digital interactions to keep them apprised of the progress of repairs can be a major benefit to the business, and many shops are implementing artificial intelligence (AI) to augment staff capacity as they struggle with the ongoing workforce shortage.

With reduced staff plaguing many facilities, efficiency remains a hot topic as shops seek out ways to repair more with fewer technicians. For some, this means seeking out more qualified help, but it’s equally important to retain the staff already in place. Creating a positive work environment and culture that focuses on training demonstrates that a shop owner is willing to invest in their team. The days of “pay more and they will come” are long gone. Today’s employees want to know that their work matters and is appreciated, and innovative employers show their commitment to their teams in a variety of ways.

Offering benefits that can be found in other industries – health insurance, 401(k) retirement plans and sufficient paid time off – is no longer an option; it’s necessary if you want to develop a workplace that inspires dedication and longevity. There are many other ways to incentivize employees to work more efficiently, but a long-ignored issue came to light in 2025 and will likely continue to gain a foothold in the future. 

Burnout is real! Shop owners face burnout as they struggle to do everything a business requires, but team members often face similar challenges. Throughout the industry’s history, mental health has been disregarded, yet this topic was brought to the forefront last year by TAG Auto Group owner Andy Tylka who started promoting the value of mental health resources after learning that “one in four automotive professionals experience mental health conditions, and the suicide rate in the auto industry ranks amongst the highest of any industry.”

Also learning that 80 percent of workers suggested that support for mental health could improve their performance at work, Tylka founded Brake the Stigma (brakethestigma.com) to raise awareness, provide support, empower employers and advocate for change. 

Shop owners can support their teams in myriad ways, and when it comes to supporting their businesses, marketing remains a vital component of a shop’s success, as demonstrated in an AASPMN News August 2025 feature which provides tips for marketing in today’s digital era (available at grecopublishing.com/aasp0825coverstory).

Most importantly, automotive and collision repairers need to remember that things are shifting constantly, so when the business gets hard, being willing to embrace change can make all the difference. What are you going to do differently in 2026?