New cars are getting too expensive to fix
Last fall, a brand new BMW 3-series car rolled into the Old Dominion Carstar Collision Center in Eugene, Ore. - literally. A teenager was "driving dad's car," says shop owner Patty McConnell, and rolled it over - with little apparent structural damage. The teen walked away, and normally the damage wouldn't have been hard to repair. But the BMW had so many air bags "it looked like a balloon," recalls Ms. McConnell. The new car, worth more than $30,000, was totaled.Skip to next paragraph
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Costly air bags, expensive electronics, and lightweight body materials are driving up the cost of fixing new cars. Not only do many more parts have to be replaced rather than repaired, but fewer and fewer body shops can afford the special equipment and training required to do the work."We're moving closer and closer to the disposable car," says Dan Bailey, an executive vice president at Carstar, the largest auto-body repair franchise in the United States.
Repairing a new car a decade ago, for example, cost an average of $2,578 per claim, while in 2003, the cost had ballooned to $3,681, a 43 percent increase that has outpaced inflation, says Kim Hazelbaker, senior vice president and head of loss claims analysis with the Highway Loss Data Institute (HLDI) in Arlington, Va.
Normally it takes a lot of damage to total a brand-new vehicle. Insurance companies calculate the value of a car before the accident and subtract its value as scrap. As long as the result is more than the cost of repair, the car is worth fixing.
But many new cars today cost so much to fix that it's becoming harder to justify repairs. The BMW that hit McConnell's shop had dual front, side, and side- curtain air bags. Federal safety rules do not allow air bags to be reused. So each bag would have had to be replaced with a brand new one. The sensors and pyrotechnics that set them off also required replacement. Add the cost of labor, more than $1,000 for each air bag, and even more for the sensors, and the result is a totaled car.
Before the advent of air bags, only 8 percent of damaged cars were totaled. Today, the figure is nearly 20 percent and rising. "As they continue to put more air bags in these vehicles, the figure is going to continue to escalate," says Mr. Bailey of Carstar. Not only do the number of air bags (two in front have been required since 1996) increase costs, today's new "smart" air bags, with sensors that control whether they deploy and how hard, cost more than older bags. Seat belts, too, have "once-and-done" pretensioners that have to be replaced - even on unoccupied seats - after an accident.
"There are a lot [of electronics in cars] today that weren't there in the past," says Mr. Hazelbaker of HLDI. "And if they're damaged, they are going to have to be bought new. There's only one source, the automaker, so you're going to pay full retail price."
While air bags are the most expensive technology to repair after a crash, other high-tech items are also pushing up repair costs. For example, the world's bestselling vehicle, Ford's F150 pickup, uses a magnesium radiator mount - which gets crunched every time an F150 runs into anything. Magnesium is strong and light, but brittle. Even if it bends without breaking in an accident, a body shop can't bend it back. Like air bags, it has to be replaced at a cost of more than $300.
To meet fuel-economy requirements, automakers are using more lightweight parts. Magnesium, titanium, and carbonized plastic are among the rapidly expanding number of components found under the hood.
And then there's aluminum. At least five cars come with all-aluminum bodies and frames, including the Audi A8, Acura NSX, Honda Insight, Mercedes CL, and the new Jaguar XJ8. So far, few body shops are authorized to fix these cars. For example, only 13 body shops nationwide can do repairs on the XJ8. So if you wreck one in a remote area, insurance companies will factor in the cost of shipping it to an authorized shop.
Body shops that deal with aluminum have to wall off separate work areas and buy tools separate from those used on steel cars. That's because steel shavings can contaminate aluminum.