Auto repair costs have increased by almost 13% between June, 2022 and June, 2023 according to the Consumer Price Index.
That added financial burden is among the key factors causing confusion, distrust and economic hardship among a growing number of vehicle owners according to new results of a consumer study released this week by auto service app Jerry.
To help allay some of those concerns, while boosting driver safety, Jerry is adding two new free tools called GarageGuard and DriveShield.
“GarageGuard is like WebMD for your car,” said Art Agrawal, co-founder and CEO at Jerry in an interview.
“If you’ve ever been to a repair shop, you know, like you go there and the mechanic is telling you something and you’re not really sure if you know the price is fair, if the brand of parts they’re offering is the right kind of parts I should be ordering,” explained Agrawal. “So this lack of information and transparency, you know, can sometimes make the consumer feel like they’re getting ripped off, even if they aren’t getting ripped off. So we provide all of that information in the app so you can see exactly for your car how much repair should cost, which brand of products to buy. We also give you a list of repair shops in the entire U.S.”
Agrawal says his company calls about 2,500 repair shops to check on their prices, making sure they’re fair.
GarageGuard had been in the works for some time, but results of a consumer survey Jerry ran in May only bolstered its belief in why it was necessary.
Among the 1,431 vehicle owners responsible for repairs between the ages of 16 and 75 responding to the survey, 89% said there’s a good chance they were overcharged at a repair shop, while 56% believed they paid for a repair or maintenance service they didn’t need.
As evidence of their confusion, 65% said they’ve felt frustrated due to a lack of transparency about what repairs and other services should cost at auto repair and maintenance shops.
In previously released results of the study conducted last May by Jerry, the financial worries over the cost of car repairs were borne out by these findings:
· Nearly a third of American vehicle owners (29%) took on debt to pay for vehicle repairs in the past two years.
· One in four (26%) Americans say they would not be able to pay for a $500 repair job if their car broke down tomorrow.
· More than a third (37%) could not cover a $1,000 repair job, and more than half (58%) could not pay $3,000.
Those results are buttressed by a survey conducted by the Triple A where 64 million American drivers said they would be unable to pay for unexpected car repairs without going into debt.
“You know, it’s just one of the worst experiences sometimes you know, as a car owner who doesn’t know much about cars, it can be a very painful experience,” said Agrawal. “As you can see, you know, most Americans are one major car problem from, you know, going into debt.”
The DriveShield tool is aimed at boosting driver safety. Using information gleaned from a driver’s smartphone, DriveShield tracks driving habits such as speeding and provides a score.
High scores win rewards from brands such as Uber, DoorDash and Expedia, according to Agrawal. He stresses data is never shared or sold, although drivers are free to share high scores with their insurance companies in hopes of securing reduced premiums.
Creating these two new tools was accelerated when Jerry secured an additional $110 million in equity and debt financing in Q2 2022, the company said.
The Series C2 equity financing was led by existing investor Park West Asset Management. The oversubscribed up round also included reinvestment from Goodwater Capital, Highland Capital Partners, Plug And Play Ventures, among other existing investors, the company said in a statement.
TriplePoint Capital led the debt facility and also invested in the equity financing. The new financing followed Jerry’s C1 round, bringing total funding to $242 million.
Gains in the company’s insurance business in the past year have also played a big role in Jerry’s growth as it looks to add new services, Agrawal said.
Could any of those new services address the growing market share for battery electric vehicles? Agrawal wasn’t ready to give anything away on that except to hint, “We’re definitely thinking about that. We haven’t decided anything yet, but we’re definitely thinking about it.”