Service Costs Soar For Some Vehicles During First Year We Predict Study Shows

When automakers decide to build additional models on a platform that’s usually a good move for improving efficiency and cost savings. But new data released Monday shows that strategy used by one car company has resulted in a spike in warranty and service costs for those vehicles.

Using millions of service records research firm We Predict compared average service and warranty costs for four model years worth of vehicles (2018-2021) after 12 months on the road. While the costs for some remained constant over that time, that’s not the case for some 2021 SUV models built by General Motors for the first time on a platform originally used for pickup trucks.

“Incredibly expensive launch. The costs for that have tripled from the last year of the last iteration to this, the first of the first iteration—that’s unusual,” We Predict founder and CEO James Davies told Forbes.com.

The numbers are dramatic. Service and warranty costs for the 2020 models of the Cadillac Escalade and Escalade ESV were $341 and $348 respectively. When they moved to the new platform for 2021 those costs skyrocketed to $1,115 for the Escalade and $1,030 for the Escalade ESV.

The results are similar for the Chevrolet Tahoe and GMC Yukon. Service and warranty costs for the Tahoe increased from $144 in 2020 to $668 in 2021. For the Yukon costs more than tripled from $193 to $716 and rose from $251 in 2020 for the Yukon XL to $719 in 2021.

Over time, as the issues are addressed costs can start to shrink, but when they’re high from the start that’s a bad omen.

“Our data shows an expensive first 12 months of service will turn into expensive years of service year after year,” Davies warned.

Sometimes change is good, however, especially in the case of the Ford Explorer. When Ford updated the popular SUV for 2020 it didn’t go smoothly. Service and warranty costs the first year were $412 according to We Predict data—more than double the $184 for the previous year model.

For the next model year Ford addressed the issues and in 2021 first year service and warranty costs for the Explorer retreated back to $211.

“Ford pretty much went from making the most expensive Explorer they ever made then all the way back again in the space of two years,” said Davies. “Manufacturers are getting better at learning quickly from their mistakes.”

First repair costs for a few vehicles have remained consistently low over the course of the four years of data We Predict examined, especially the Toyota Prius Prime and Subaru Crosstrek.

Service and warranty spending after 12 months on the road for the 2018 Prius Prime came in at $138 but then quickly dropped to $108 in 2019, $109 in 2020 and edged up two bucks to $111 in 2021.

The Crosstrek has had more of an up and down journey at $105 in 2018, $139 in 2019, then started downward to $125 in 2020 and $123 in 2021.

What about electric vehicles? There wasn’t much data and none at all for Tesla. In the years 2018 through 2020 the Chevrolet Bolt’s 12 month service and warranty costs decreased from $143 to $122. There’s no data for 2021 when the battery electric car and its bigger cousin the Bolt EUV were recalled due to battery fires. Production for both Bolt models was stopped temporarily.

First year repair costs for the Porsche Taycan EV were a huge $3,008 in 2020.

A We Predict study released last August showed repair costs for electric vehicles are initially high but are expected to decline over the course of ownership given EVs have many fewer parts and mechanical components than internal combustion engine vehicles.

That study revealed the cost to repair an EV after three months of service is more than 2.3 times higher per vehicle than the costs to repair other vehicles. That ratio lowers to more than 1.6 after a year in service.

A year after an electric vehicle’s launch We Predict found the the number of so-called “incidents” per 1000 vehicles dropped 33% from its initial launch and repair costs declined 27%. But by the second year incidents per 1000 vehicles fell by 14% but the cost to repair those vehicles decreased 65%.

“The electric powertrain platforms are being used longer by manufacturers and they’re making them better quickly and we’re getting the benefit of that,” noted Davies.

Whether powered by electricity or an internal combustion engine there’s one rule for consumer Davies reiterates: “Everyone knows you shouldn’t buy the first model year of a vehicle.”