The OP's article was careful to make this distinction, and I think it's very interesting (as well as being the crucial point of the article). Cars are now more reliable and last longer, but when they do develop a problem, it's less economically viable to repair them.
The definition of 'Totaled' is when a comparable car on the used market can replace your vehicle for less than or equal to the repair costs.
As such, it makes no sense to repair a totaled vehicle. You should instead buy a comparable used vehicle.
But saying the word 'Disposable' is pretty bad with regards to the headline. It doesn't capture the full effect of what the stats are showing. That is, we are all keeping vehicles for longer. Longer miles, longer life.
Repair costs for old vehicles always grows as old parts tend to be harder to find (factories have shifted production to newer vehicles. So you are forced to look for scrap). Meanwhile, older cars lose more and more value as they age.
As GP said, the author recognized that people are keeping cars longer and that they are more durable. However a new wrinkle is that "the proportion of brand new vehicles being written off has increased." This is due to the costs of repairing "Advanced Driver Assistance Systems” such as automatic braking and lane-keeping assistance. These systems include sensors, cameras, and other equipment that must be carefully calibrated, which adds a lot of skilled labor costs to the repairs. It's no longer the case that a repair is just hammering out dents and spraying some paint.
Yep, they are surprisingly complex and expensive sensor-controlled devices, and a modern car might have a dozen of them. Just their replacement alone will be thousands of dollars, on top of the actual collision repair work.
> As such, it makes no sense to repair a totaled vehicle. You should instead buy a comparable used vehicle.
I sometimes wonder how much the carbon footprint of the auto industry would change if people preferred to fix them instead of throwing the whole thing away just because of a fender bender or an expensive part broke
Our CR-V was rear-ended. It's a great car and it's pretty likely to be totaled because the cost of repairs is going to end up being higher than the insurance company is willing to pay. (And then I expect it's going to be a massive fight for me to get paid enough to replace it like-for-like, but that's a separate issue from the overall footprint.)
I don't see any reasonable way around this, though. If I have a car that I could replace for $8K plus the cost of replicating some mods [CarPlay head unit, tow hitch, and heated seats] and would salvage for $1K, I can't reasonably expect someone else's insurance company to pay $12.5K in costs (for repairs plus rentals/loss of use plus diminished value plus incidentals) to put me back in a place where I then have a crash-repaired car worth $7K plus $1K in cash in my pocket for diminished value. What other carbon reduction could be bought for that extra $3K in costs vs. repairing our damaged car?
From the at-fault driver's and their insurance company's point of view: the driver's negligence caused around $8-9K of direct damages to me plus several hundred in incidental/related expenses. That's what the driver is liable for (and the insurance company on the hook to cover as per their agreement), not a $12+K figure for a liability for damages amount that was thousands lower.
> I don't see any reasonable way around this, though. If I have a car that I could replace for $8K and would salvage for $1K, I can't reasonably expect someone else's insurance company to pay $12.5K in costs (for repairs plus rentals/loss of use plus diminished value plus incidentals) to put me back in a place where I then have a crash-repaired car worth $7K plus $1K in cash in my pocket for diminished value.
The problem with that logic is the assumption that the car can be replaced for $8K. To some (maybe most) people, cars are non-fungible and there is a significant amount of personal, non-transferrable value in one particular vehicle, due e.g. to the memories acquired in connection with it.
Part of the reason that people get upset when the insurance company decides to declare their car totaled is that the replacement value offered is significantly lower than they would have accepted for the car had it not been in an accident-- The actuarial value assigned isn't properly valuing the intangibles.
Edit to add: Or, in other words, if the market-clearing price of "comparable" vehicles represented the actual value of the car to its owner, the car would have already been on the used market. The fact that it wasn't signals that there must be some premium over the market price that's necessary to make the owner whole.
Here is another angle on that "sentimentality" you're talking about. If I've been following the book on every maintenance item, driving gently, and proactively going after any rust that starts to form on the vehicle that is then smashed up in an accident I don't want an "equivalent market value" used vehicle that was neglected and beat to shit by the previous owner just because it's the same make, model, and age. Especially since that previous owner was a chain smoker.
True. As a car person, I’m expecting an annoying battle here, and that’s over just replacing the utilitarian aspects of what is a pure utility car for us.
If it was my fairly modified (by me) ‘66 Mustang, that would be very difficult to get to a settlement figure that I’d find fair.
I literally can’t get another light truck that’s as compact and as useful as the one I have. My choice is to buy a giant semi truck or an suv with a 4-foot box bed. There’s more to vehicles then sentimental or book value.
As it stands I’ll probably try to get a mini van and put vinyl floors in.
What you describe would be insurance over the minimum coverage, which is available. If you take the minimum, expect to get the 'market value' of a replacement because that's what you agreed to when you initiated the policy.
There are two key cases: when you are forced to deal with your insurance company because no one else is at fault. In that case, you get what you bought.
When another driver is at fault and you elect to not use your insurance company for whatever reason. In that case, you didn't have any opportunity to pre-arrange with this other driver's insurance company and you have to fall back on the law as a backstop.
All dozen of my kids were conceived in the back of that 1997 Toyota Camry. The car was given to me from my Grandpa after he passed. All those memories from the past 27 years clearly has a ton of sentimental value; I put it at $2M. I'll settle for half of that though.
The total valued does not include the significant time of finding an equivalent vehicle at that price in the rough and tumble used car market.
It also does not price in the significant risk that a used car of this vintage significant undisclosed defects that are hard to detect by inspection at purchase.
So if someone else is at fault, their insurance can total your car? I thought that was only a factor for your own comprehensive/collision insurance. I would expect if my car is damaged and the repairs are $X, that is the other drivers liability regardless of the value of my car??
Imagine your 1990 Honda Accord is smashed into a 2’ x 2’ x 2’ cube or caught fire and burned to the ground as a result of the accident that was someone else’s fault.
Do you think that the other insurance should be on the hook to repair the remains of your car into a functioning 1990 Honda Accord?
Or is paying to replace the car with like sufficient? (I hate it, but I have to agree that it’s far more practical to allow the replacement.)
That depends. In the general case I'd call a 2000 Toyota close enough because I don't consider the 1990 Honda collectable. However if you are a collector that 1990 is a 30 year old classic and you can demand more. To demand more than means you need to show you will - get a special insurance policy that will demand a 1990 Honda if anything happens. You also won't be driving this 1990 Honda on the roads except in context of a parade (you put it on a trailer to get to the parade).
I think the issue is mostly from misaligned motivations from insurance companies and car manufacturers.
On the insurance side, they're motivated by finances. If the quote to fix a car is $10k and the car itself was only worth $8k, the insurance company is just going to give you $8k to find yourself an equivalent car to the one you "totaled". There's no intrinsic motivation for the insurance company to go for the $10k repair? Maybe allow them to have carbon credits or something for spending an extra $2k to keep the same car on the road? How do you tease out how much of a carbon win this is? (and who is in charge of deciding that?)
So then on the car manufacturer side, they're motivated by sales/ brand reliability. Maybe if cars were more repair-friendly that would help change the equation? That comes with the potential trade-off of new cars being more expensive and/or less reliable if they can't be as tightly integrated as they currently are. So if car manufacturers are motivated to make the most reliable/cheap car, they are going to forgo making them less repairable.
If you try and get both sides of this equation onto the same page, I don't know that you could trust that there wouldn't be some under the table shenanigans going on without making things so overregulated that both new cars and car repairs are both more expensive?
If you priced carbon emissions for building the car into the cost of new cars, it would fix this. In the case of your example, the used car would be worth more than $8k because new cars would be correspondingly more expensive.
Of course the problem is as you said how do you price carbon emissions.
But, that already isn't what happens. A totaled vehicle is almost never thrown away. They're sold for salvage value. Some of them are repaired, and sold as rebuilt vehicles. Others are stripped for parts that are recycled to fix other vehicles. And anything left over is recycled for raw material.
The change to unibody construction in the 70s/80s and the more-recent move to 'gigapressing' an entire car with body work has unfortunately made repair much more difficult.
In the past body shops would realign frames, pull body work back into shape, and weld in new pieces but it's just not safe and practical to do that with unibody vehicles even if you did have the tooling and machinery to ensure that it was done right and everything is actually back into factory spec and alignment.
It's almost a shame that the electric vehicle 'skateboard' concept (essentially a rolling chassis in industrial/truck vehicle terminology) didn't really get anywhere - but I have to imagine that design constraints, extra weight from attaching the body to the chassis, and other relevant factors that pushed us into unibody vehicles in the first place also made concept unfeasible.
> weld in new pieces but it's just not safe and practical to do that with unibody vehicles
Unibody cars are repaired safely all the time, whether for collision or rust repair. It may have been easier in the body-on-frame days, but it safe and practical now still.
People might prefer to fix them. The paradigm of replacing rather than repairing is effectively enforced by insurance policies.
A different insurance model would be necessary to adopt a repair orientation. Maybe it's the equivalent of paying more to be "green," except that consumers don't really consider it as an option when they buy a car insurance policy. It seems like this kind of option would justify higher insurance premiums, so maybe a major insurer could consider promoting one as environmentally friendly.
I think it would decrease, but not as much as you'd think.
When most cars are "totaled," the car itself is sold for salvage. If it can be fixed relatively easily, the car will be purchased at a salvage auction, fixed, and resold.
If it can't be easily fixed, the parts that can be salvaged will be resold to other autobody shops.
While the consumer might be "throwing away" the car, the car itself isn't generally being thrown in a landfill until all of the functional parts are reused in some way.
It makes sense to repair a totaled vehicle if you can do most of the repair work yourself instead of paying the market rate. A friend has an older Volkswagen Jetta that was hit from behind at an intersection. There was no frame damage or airbag deployment but the insurance company totaled it because inflation has driven labor charges for simple repairs to ridiculous levels. My friend took the insurance payout and repaired it himself using a junkyard bumper. Works fine. But he had more free time and better mechanical skills than most people.
I can't get the link to work at the moment so I was wondering: are the stats being covered here including or excluding EVs? I've read elsewhere that EV repair costs are artificially high due to various other factors surrounding the manufacture and distribution of their parts versus ICE vehicles, not only but especially the batteries being SO expensive that it borderline out-prices a new car.
We generally get about 8 years out of a car before we start running into larger repairs. This tends to become the point we decide to trade it in for something new.
