Summary
RAC Warranty’s 2025 data highlights rising repair costs and shifting claim patterns as UK vehicles age and parts and labour prices increase. The company approved a record claim of £22,954 to replace both the engine and gearbox on a 2020 Audi, underscoring how high-value failures are becoming more common.
Key takeaways
- Record 2025 claim: engine and gearbox replacement on a 2020 Audi for £22,954 (model not disclosed).
- Paid claims involving EVs and hybrids rose rapidly during 2025, reflecting their growing share of the customer base (though still smaller than petrol/diesel).
- Higher-value bills are increasingly tied to complex, expensive components as vehicles age and repair costs inflate.
Most common claim categories in 2025
- Electrical systems
- Engines
- Front suspension and hubs
- Cooling systems
- Body exterior
- Fuel systems
- Brakes
- Heating, ventilation and air conditioning (HVAC)
- Body interior
- Exhaust systems
What’s driving the trend
- Ageing parc: Reduced new-car supply and cost-of-living pressures lengthened ownership cycles post-pandemic, increasing the likelihood of major failures such as engines and gearboxes.
- Inflation: Labour rates and parts prices have climbed, sometimes sharply, lifting average invoices and pushing more repairs into five-figure territory.
- Vehicle complexity: Modern cars rely on more electronics and control modules, contributing to electrical faults that are frequent and often time-consuming to diagnose.
EV and hybrid claims
RAC Warranty reports rapid growth in paid claims on electrified models in 2025, aligned with more EVs and hybrids entering service and the used market. While the absolute volume remains below that of combustion vehicles, the direction of travel is clear. Specific high-cost EV components (e.g., batteries, power electronics) were not detailed, and no cost comparisons with ICE vehicles were provided.
Implications for retailers, warranty providers, and motorists
- Expect continued exposure to big-ticket mechanical repairs as older vehicles remain in circulation and component prices stay elevated.
- Growing electrified share will reshape claim profiles, training needs, and diagnostic investments.
- Warranties remain positioned as protection against unpredictable, high-value failures beyond manufacturer coverage windows.
Data not disclosed
- Total claim volumes, average claim values, or loss ratios for 2025.
- Claim frequency by fuel type or vehicle age cohorts.
- Breakdown of EV/hybrid claim components and comparative costs.
Overall, RAC Warranty’s 2025 experience points to persistent cost inflation, an ageing vehicle parc, and a steadily electrifying fleet setting the tone for 2026, with an anticipated increase in electrified vehicle claims alongside continued demand for cover against major engine and gearbox failures.
