Insurance info
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Insurance info
In case anyone wants to know, good article....
The Disposable Car: More Cars End Up Totaled --- High-Tech Safety Features Mean
Many Vehicles Cost Too Much to Fix After Crash
IT'S GETTING EASIER to total a car.
An unintended side effect of the increasingly sophisticated design of cars is
that they are often too expensive to fix after even relatively minor
collisions.
Most standard auto policies won't pay to fix a car if the repairs cost more
than its cash value. But the cost of repairs is soaring as vehicles come
equipped with expensive features like Xenon headlamps that can cost $3,000 a
pair, sophisticated backup video cameras on their tailgates, and multiple air
bags (the 2004 Mercedez-Benz M Class SUV has eight of them). This year, 16% of
vehicles involved in collisions are being declared a total loss, compared with
7% in 1995, according to Charlie Baker, publisher of Collision Repair Industry
Insight, a trade magazine. While that's partly because cars last longer today,
advanced safety features are a major factor as well.
Deploy three or four air bags, for instance, and it will automatically cost
thousands of dollars to replace them, on top of any body work or other damage.
Then there are backup cameras and parking sensors, which warn drivers if
they're getting too close to another car when parallel parking. These devices
are designed to prevent accidents -- but they are also often in vulnerable
places like the front or rear bumper.
Demand for more fuel-efficient vehicles also plays a role in rising repair
costs. Lighter metals like boron steel and aluminum are increasingly showing up
as structural components, but unlike regular steel, they cannot easily be bent
back into shape after a crash. Instead these components often get replaced,
boosting repair costs. Some of the new materials also require different tools
and even work areas, raising the cost of fixing such cars as the Jaguar XJ, the
Audi A8 and the BMW 5 series, which have aluminum components.
"We're moving closer and closer to the disposable vehicle," says Dan Bailey,
chief operating officer of Carstar, a collision-repair chain based in Overland
Park, Kan. In May, for instance, a 2002 Saturn sedan arrived at one of the
franchises in Maineville, Ohio, after a low-speed crash in which the car was
driven off the road. The exterior looked fine, but the bump set off the air
bags, damaging the dashboard, steering wheel, cruise control and even the
sunroof. What would have been a $5,000 suspension repair was pushed up to
$9,200, and the car was totaled.
Exacerbating the issue: In recent years, cars have been losing their value at a
quickening pace after they drive off dealers' lots. (That's chiefly a result of
increased discounting on new vehicles.) During the past three years, wholesale
used-car prices have fallen an average 6.5% a year, according to Automotive
Lease Guide. The faster a car depreciates, the lower its insured value --
making it easier to total in a relatively minor accident.
Cars totaled this way usually end up being sold either to companies that
disassemble them for spare parts or that specialize in rebuilding them and
selling them into the used-car market. (For a fee, Carfax.com can determine,
using the vehicle's identification number, whether a used car was previously
totaled.)
Other factors are also contributing to rising repair costs. Manufacturers are
increasingly creating body parts in assembled units rather than smaller
individual parts, which helps streamline the manufacturing process, but can
also add dollars to the repair bill. If one of the smaller parts needs to be
fixed after an accident, the entire preassembled unit may have to be ordered
just to get the small piece that needs to be replaced.
Of course, the best way to save money on repairs is to stay out of wrecks
altogether, which pricey features like backup cameras and parking sensors are
designed to do. But partly because add-ons like these are so easily damaged,
the average cost of repairing a car is now rising faster than the rate of
inflation. Repair costs jumped 12% from 1999 to 2001 (the most recent year for
which there are complete data), according to the Insurance Institute for Highway
Safety. More recent data, while incomplete, are showing a further 9% jump, to
$3,681 per claim, by 2003.
Just because you have several high-tech features on your car doesn't mean it
will automatically be totaled in an accident. Since many of these pricey parts
are found on expensive luxury cars, breaking one or two isn't going to make
much a dent in its overall value.
However, such features are increasingly showing up on a wider variety of
vehicles. In 2001, rear parking sensors were available on 35 car models,
according to auto-industry researcher Edmunds.com. This year the feature, which
costs from $150 to $500, is available on 82 models.
Air bags are proliferating as well. New cars are currently required only to
have two frontal air bags, but in May federal regulators proposed new tests that
are expected to require auto makers to equip all of their vehicles with
head-protecting side air bags.
Cars that depreciate more slowly are somewhat insulated from being prematurely
totaled by a minor accident. According to Edmunds.com, one 2004 model in the
$20,000 to $45,000 price range that is expected to hold its value the best
during the next five years is the Honda S2000 roadster. It's estimated to lose
roughly 47% of its value by 2009. By contrast, the Ford Freestar minivan is
expected to rank among the poorest, losing about 74% of its value. Cars with
fewer rebates when new tend to hold their value better over time, according to
Bob Kurilko of Edmunds.
One way to protect yourself from high repair costs is to find out how much you
will pay in collision insurance before you purchase a vehicle. Comprehensive
and collision insurance premiums are calculated by looking at vehicle loss
history -- that is, how often the vehicle is stolen and how much it costs to
repair or replace it after an accident.
Allstate.com provides information on which vehicles' premiums are lower than
average, middle of the road, or higher than average. You can compare vehicles
by "physical damage ratings" (the expected collision repair cost) by clicking on
"Auto Make & Model" under "Resources & Tools" on the home page.
The Insurance Institute for Highway Safety offers "injury, collision and theft
losses" by make and model for 2000-2002 cars on its Web site, iihs.org. The
institute's bumper tests, which determine how much costly damage occurs in
minor fender-benders, also offer guidance. Each year the institute picks a group
of popular passenger cars to undergo a series of four bumper tests at five miles
per hour.
In the most-recent test, six midsize sedans fared poorly, with each averaging
more than $500 in repairs after crashes at five miles per hour. The 2004
Chevrolet Malibu and the 2004 Acura TSX earned the group's lowest rating,
averaging more than $950 in damage. Honda Motor Co.'s Acura TSX had the
costliest accident, sustaining $1,559 in damage when it crashed into a pole.
Mitsubishi Motors Corp.'s 2004 Galant fared best, averaging $525 in repairs in
each of four tests. Auto makers stress that the tests aren't related to vehicle
safety.
---
Pricey Repairs
Replacement prices for a sampling of safety features:
-- 2004 Lexus RX330
backup camera: $4,087
-- Side airbags: from $400 to $2,000 depending on the vehicle
-- 2004 Cadillac Escalade
mirror with turn indicator: $997
Sources: Insurance Institute for Highway Safety; Carstar
The Disposable Car: More Cars End Up Totaled --- High-Tech Safety Features Mean
Many Vehicles Cost Too Much to Fix After Crash
IT'S GETTING EASIER to total a car.
An unintended side effect of the increasingly sophisticated design of cars is
that they are often too expensive to fix after even relatively minor
collisions.
Most standard auto policies won't pay to fix a car if the repairs cost more
than its cash value. But the cost of repairs is soaring as vehicles come
equipped with expensive features like Xenon headlamps that can cost $3,000 a
pair, sophisticated backup video cameras on their tailgates, and multiple air
bags (the 2004 Mercedez-Benz M Class SUV has eight of them). This year, 16% of
vehicles involved in collisions are being declared a total loss, compared with
7% in 1995, according to Charlie Baker, publisher of Collision Repair Industry
Insight, a trade magazine. While that's partly because cars last longer today,
advanced safety features are a major factor as well.
Deploy three or four air bags, for instance, and it will automatically cost
thousands of dollars to replace them, on top of any body work or other damage.
Then there are backup cameras and parking sensors, which warn drivers if
they're getting too close to another car when parallel parking. These devices
are designed to prevent accidents -- but they are also often in vulnerable
places like the front or rear bumper.
Demand for more fuel-efficient vehicles also plays a role in rising repair
costs. Lighter metals like boron steel and aluminum are increasingly showing up
as structural components, but unlike regular steel, they cannot easily be bent
back into shape after a crash. Instead these components often get replaced,
boosting repair costs. Some of the new materials also require different tools
and even work areas, raising the cost of fixing such cars as the Jaguar XJ, the
Audi A8 and the BMW 5 series, which have aluminum components.
"We're moving closer and closer to the disposable vehicle," says Dan Bailey,
chief operating officer of Carstar, a collision-repair chain based in Overland
Park, Kan. In May, for instance, a 2002 Saturn sedan arrived at one of the
franchises in Maineville, Ohio, after a low-speed crash in which the car was
driven off the road. The exterior looked fine, but the bump set off the air
bags, damaging the dashboard, steering wheel, cruise control and even the
sunroof. What would have been a $5,000 suspension repair was pushed up to
$9,200, and the car was totaled.
Exacerbating the issue: In recent years, cars have been losing their value at a
quickening pace after they drive off dealers' lots. (That's chiefly a result of
increased discounting on new vehicles.) During the past three years, wholesale
used-car prices have fallen an average 6.5% a year, according to Automotive
Lease Guide. The faster a car depreciates, the lower its insured value --
making it easier to total in a relatively minor accident.
Cars totaled this way usually end up being sold either to companies that
disassemble them for spare parts or that specialize in rebuilding them and
selling them into the used-car market. (For a fee, Carfax.com can determine,
using the vehicle's identification number, whether a used car was previously
totaled.)
Other factors are also contributing to rising repair costs. Manufacturers are
increasingly creating body parts in assembled units rather than smaller
individual parts, which helps streamline the manufacturing process, but can
also add dollars to the repair bill. If one of the smaller parts needs to be
fixed after an accident, the entire preassembled unit may have to be ordered
just to get the small piece that needs to be replaced.
Of course, the best way to save money on repairs is to stay out of wrecks
altogether, which pricey features like backup cameras and parking sensors are
designed to do. But partly because add-ons like these are so easily damaged,
the average cost of repairing a car is now rising faster than the rate of
inflation. Repair costs jumped 12% from 1999 to 2001 (the most recent year for
which there are complete data), according to the Insurance Institute for Highway
Safety. More recent data, while incomplete, are showing a further 9% jump, to
$3,681 per claim, by 2003.
Just because you have several high-tech features on your car doesn't mean it
will automatically be totaled in an accident. Since many of these pricey parts
are found on expensive luxury cars, breaking one or two isn't going to make
much a dent in its overall value.
However, such features are increasingly showing up on a wider variety of
vehicles. In 2001, rear parking sensors were available on 35 car models,
according to auto-industry researcher Edmunds.com. This year the feature, which
costs from $150 to $500, is available on 82 models.
Air bags are proliferating as well. New cars are currently required only to
have two frontal air bags, but in May federal regulators proposed new tests that
are expected to require auto makers to equip all of their vehicles with
head-protecting side air bags.
Cars that depreciate more slowly are somewhat insulated from being prematurely
totaled by a minor accident. According to Edmunds.com, one 2004 model in the
$20,000 to $45,000 price range that is expected to hold its value the best
during the next five years is the Honda S2000 roadster. It's estimated to lose
roughly 47% of its value by 2009. By contrast, the Ford Freestar minivan is
expected to rank among the poorest, losing about 74% of its value. Cars with
fewer rebates when new tend to hold their value better over time, according to
Bob Kurilko of Edmunds.
One way to protect yourself from high repair costs is to find out how much you
will pay in collision insurance before you purchase a vehicle. Comprehensive
and collision insurance premiums are calculated by looking at vehicle loss
history -- that is, how often the vehicle is stolen and how much it costs to
repair or replace it after an accident.
Allstate.com provides information on which vehicles' premiums are lower than
average, middle of the road, or higher than average. You can compare vehicles
by "physical damage ratings" (the expected collision repair cost) by clicking on
"Auto Make & Model" under "Resources & Tools" on the home page.
The Insurance Institute for Highway Safety offers "injury, collision and theft
losses" by make and model for 2000-2002 cars on its Web site, iihs.org. The
institute's bumper tests, which determine how much costly damage occurs in
minor fender-benders, also offer guidance. Each year the institute picks a group
of popular passenger cars to undergo a series of four bumper tests at five miles
per hour.
In the most-recent test, six midsize sedans fared poorly, with each averaging
more than $500 in repairs after crashes at five miles per hour. The 2004
Chevrolet Malibu and the 2004 Acura TSX earned the group's lowest rating,
averaging more than $950 in damage. Honda Motor Co.'s Acura TSX had the
costliest accident, sustaining $1,559 in damage when it crashed into a pole.
Mitsubishi Motors Corp.'s 2004 Galant fared best, averaging $525 in repairs in
each of four tests. Auto makers stress that the tests aren't related to vehicle
safety.
---
Pricey Repairs
Replacement prices for a sampling of safety features:
-- 2004 Lexus RX330
backup camera: $4,087
-- Side airbags: from $400 to $2,000 depending on the vehicle
-- 2004 Cadillac Escalade
mirror with turn indicator: $997
Sources: Insurance Institute for Highway Safety; Carstar
Registered User
Joined: Feb 2004
Posts: 3,077
Likes: 0
good post, im suprised that people dont just use 5-point harnesses, i mean sure its impractical for an everyday car to have a racing seat in it w/ a 5-point harness, but if you get in a wreck and your wearing it all, you wont need airbags, because your not about to move but an inch or 2 in any direction. and i personnally would rather have the annoyance of all 5 belts on me daily, then getting bashed in the face w/ an airbag
