HOW THE RECESSION COULD TOTAL YOUR CAR
12/2/2011 10:20 AM ET
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The economy has dented your car’s value, at slightest in the eyes of insurers. Here‘s why, despite fewer critical wrecks, more cars are being spoken a total loss.
The roads are safer currently than ever. For multiform reasons — comparison drivers, better cars, graduated licensing for teenagers — deadly accidents in the U.S. have been descending for years. In fact, the supervision reported this month that main highway fatalities had depressed to their lowest turn given 1949.
Yet we are totaling distant more cars.
In 2000, about 9% of the cars appraised for repairs were judged totaled, says automobile insurance claims researcher CCC Information Services. In 2010, that number rose to 14%.
We’re not having more wrecks. And we’re not carrying worse wrecks.
We’re carrying a recession.
“Totaled” to the normal motorist equates to a mutilate with a “holy cow” volume of damage. But “totaled” to your automobile insurance association equates to simply that repairs to the automobile do not make monetary sense. That preference hinges on the car’s value, the age and the repair costs. The Great Recession has finished a number on all three.
Why we’re buying and insuring comparison cars
It all proposed with a recent, celestial run-up in the cost of used cars. In 2008, as the retrogression took hold, new-car sales plunged. Would-be buyers feared for their jobs and hung on to their aged cars. Tighter credit meant many who longed for to take the thrust couldn’t. And manufacturers could no longer lift the income indispensable to safeguard subsidized leases and rebates.
Here’s what new-car sales looked similar to over the past 5 years, according to Automotive News:
16 million in 2007.
13 million in 2008.
10 million in 2009.
11.6 million in 2010.
12.2 million (estimated) this year.
The auto market is a difficult ecosystem. “About 60% of all new-vehicle sales outcome in a trade-in,” says Susanna Gotsch, the executive and industry researcher at CCC Information Services.
Since the sales meltdown, the pool of like-new used cars has shrunk. Prices for those thickk cream puffs have risen, pulling a little buyers toward models with a couple of more miles. Those comparison cars right away are offered at a premium, with plaque startle rippling all the approach down to clunkers that can be paid for without credit.
Last year alone, the Bureau of Labor Statistics says, the cost of used cars rose 12.7%.
Cars are older, not as big — though not cheaper to repair
As people keep their aged cars longer and feel reduction prone to buy brand brand new ones, the normal age of autos on the road has risen by more than two years, from 8.5 years aged in 1995 to 10.7 years aged today, says Gotsch.
The cars are not as big as well. With the remarkable rise of fuel prices in 2008 (and Cash for Clunkers stealing 700,000 gas guzzlers from the roads), smaller, lighter, more fuel-efficient vehicles gained market share. Today, the roads lift a flourishing suit of tiny vehicles that humour more endless repairs in a wreck.
The stroke of a pile-up pushes drop over behind through a tiny car, involving a incomparable suit of the body, says insurance researcher Greg Horn of Mitchell International. “The bottom line is that the not as big the car, the more expected it is to be totaled,” says Horn.
car – Yahoo! News Search Results
12/2/2011 10:20 AM ET
|
The economy has dented your car’s value, at slightest in the eyes of insurers. Here‘s why, despite fewer critical wrecks, more cars are being spoken a total loss.
The roads are safer currently than ever. For multiform reasons — comparison drivers, better cars, graduated licensing for teenagers — deadly accidents in the U.S. have been descending for years. In fact, the supervision reported this month that main highway fatalities had depressed to their lowest turn given 1949.
Yet we are totaling distant more cars.
In 2000, about 9% of the cars appraised for repairs were judged totaled, says automobile insurance claims researcher CCC Information Services. In 2010, that number rose to 14%.
We’re not having more wrecks. And we’re not carrying worse wrecks.
We’re carrying a recession.
“Totaled” to the normal motorist equates to a mutilate with a “holy cow” volume of damage. But “totaled” to your automobile insurance association equates to simply that repairs to the automobile do not make monetary sense. That preference hinges on the car’s value, the age and the repair costs. The Great Recession has finished a number on all three.
Why we’re buying and insuring comparison cars
It all proposed with a recent, celestial run-up in the cost of used cars. In 2008, as the retrogression took hold, new-car sales plunged. Would-be buyers feared for their jobs and hung on to their aged cars. Tighter credit meant many who longed for to take the thrust couldn’t. And manufacturers could no longer lift the income indispensable to safeguard subsidized leases and rebates.
Here’s what new-car sales looked similar to over the past 5 years, according to Automotive News:
16 million in 2007.
13 million in 2008.
10 million in 2009.
11.6 million in 2010.
12.2 million (estimated) this year.
The auto market is a difficult ecosystem. “About 60% of all new-vehicle sales outcome in a trade-in,” says Susanna Gotsch, the executive and industry researcher at CCC Information Services.
Since the sales meltdown, the pool of like-new used cars has shrunk. Prices for those thickk cream puffs have risen, pulling a little buyers toward models with a couple of more miles. Those comparison cars right away are offered at a premium, with plaque startle rippling all the approach down to clunkers that can be paid for without credit.
Last year alone, the Bureau of Labor Statistics says, the cost of used cars rose 12.7%.
Cars are older, not as big — though not cheaper to repair
As people keep their aged cars longer and feel reduction prone to buy brand brand new ones, the normal age of autos on the road has risen by more than two years, from 8.5 years aged in 1995 to 10.7 years aged today, says Gotsch.
The cars are not as big as well. With the remarkable rise of fuel prices in 2008 (and Cash for Clunkers stealing 700,000 gas guzzlers from the roads), smaller, lighter, more fuel-efficient vehicles gained market share. Today, the roads lift a flourishing suit of tiny vehicles that humour more endless repairs in a wreck.
The stroke of a pile-up pushes drop over behind through a tiny car, involving a incomparable suit of the body, says insurance researcher Greg Horn of Mitchell International. “The bottom line is that the not as big the car, the more expected it is to be totaled,” says Horn.
car – Yahoo! News Search Results