We are in the midst of a “total loss” epidemic says “Car Dealership Guy” on Twitter. Pictures explain why.
Used Car and Truck Prices vs Maintenance and Repairs
Total Loss Epidemic
Car Dealership Guy Comments
We are in the midst of a “total loss” epidemic. More than *20%* of vehicles are now declared a write-off by insurers after examining claims. That’s around *five* times higher than in 1980. But why?
One big reason is that the cost of vehicle repairs has increased by almost 50% since the pandemic started—far exceeding inflation.
Another major driver: Declining used car prices. It may seem counterintuitive, but the rate at which used car prices have fallen over the past couple of years encourages salvaging instead of repair… And all that contributes to an increase in vehicle write-offs.
No wonder Copart’s stock price has gained 1,100% over the past decade…
Historical Context
If you get into a wreck and total your car, and all your insurance covers is the decreasing value of your car, what can you afford to buy?
Discretionary Spending Tumbles
Target CEO Brian Cornell said the results show “continued soft trends in discretionary categories.”
On May 22, I commented Discretionary Spending Tumbles at Target, Shares Drop 10 Percent
We had an advance hint at Target weakness.
Are Consumers About to Throw in the Towel?
On May 16, I commented Retail Sales Fall Flat, Are Consumers About to Throw in the Towel?
On a year-over-year basis, real retail sales have been negative 12 out of the last 15 months.
Real vs Nominal Advance Retail Sales Percent Change From Year Ago
The vaunted consumer is much less than portrayed.
Fed Consumer Survey
Let’s check out some charts from the latest fed survey on how well people are doing financially. This data and a new chart by me tie everything I have said about the rent and the election together.
Please consider Fed Consumer Survey: Are You Worse Off Than a Year Ago?
Are You Worse Off Financially Than a Year Ago?
Between 2022 and 2023 the numbers improved (lead chart). However, the numbers are a disaster compared to the peak in 2019.
Can You Handle a $400 Emergency?
Millennials and Zoomers are increasingly stressed since the end of 2021.
All of the savings from three rounds of pandemic stimulus, rent abatements, and student debt cancellations have been wiped out by rising inflation.
Click on previous link for more details.
“Towel” was thrown in long ago. The cure for high prices is high prices 💩.
My channel checks for Memorial Day Weekend here in Lake Tahoe are down and down big. “Feel me” kids😭
First rate cut will be an emergency, more big banks going T.U. when the CRE debt comes home to roost 😳.
Nothing like an old manual transmission
pick up that’s easy to work on and gets me where I need to go.
Airbags can make otherwise good cars become worthless except as parts. The whole thing is insane – to mortgage your soul to get a car and then wreck its value with a minor accident
And yet: Even absent aibags, new cars remain far safer to occupants than motorbikes. As well as vintage ones. Yet: Vintage cars and motorbikes are safe enough to be legal. But not new cars sans airbags….
Elementary logic was never a strong suit of idiots’.
I accept means to improve safety but not to the point of making a car unaffordable. Some lower priced small cars can have 6 airbags and I’ve walked past them at the local salvage yard in sadness. The Federal government seems oblivious to the cost of a new car vs average wage but that applies to rent and housing costs as well.
Noone in the immediate social circle of lawmakers are unable to afford new cars. And, being far too stupid to have any hope of ever even beginning to recognize Bastiat’s “unseen” in anything: To them, mandating more incremental “safety” just appears to result in all the cars in their neighborhood becoming safer.
The 10x number of those who instead become unable to buy a new car, and hence end up with even less safe older ones or bikes/scooters/buses; may as well be higher math it’s so far above their meager braingrade, as far as idiots dumb enough to fall for arbitrary government mandates somehow being a useful thing is concerned.
This is the way the insurance companies are saving money. Why pay $10,000 in repairs when you can total the car and pay $2,500.
– We are in the midst of a “total loss” epidemic. More than *20%* of vehicles are now declared a write-off by insurers after examining claims.
> Yet another reason, amongst so many of them, to never buy an EV EVER!!! GV’s are far less costly to run, operate, repair, and most of all, with you, your buddy’s or a friend of a friend you can fix most anything on a GV, typically very cheaply, and very quickly. I would, and do know, because I have done it most of my life. An engine puller was the only thing I had to seek out to find, but after a few calls, one was located in my own town. My Chevy had a nice used, but fully functional 350 dropped in and drivable in less than a month.
– One big reason is that the cost of vehicle repairs has increased by almost 50% since the pandemic started—far exceeding inflation.
> My very first taste of this, was when my wife had screw go into one of her 4 new AWD tires. A total loss to ALL 4 Tires as a result. You can replace just 1, but rather in nearly all cases, I was told by several people upon investigation, so all 4 must be replaced. A $20 fix with a plug, quickly became a $1,200.00 repair, and Needed to be done ASAP, as the car was inoperative.
– If you get into a wreck and total your car, and all your insurance covers is the decreasing value of your car, what can you afford to buy?
> Not much for that small sum, and especially when you consider the jump in cost. For most an EV (TG!) is out of reach, as are most Hybrids unfortunately, but used is nearly always the only option for most. Yet more costly repairs on the way…
– Discretionary Spending Tumbles
> What’s that? Some new foreign language word? I hadn’t heard that word used in years…
– All of the savings from three rounds of pandemic stimulus, rent abatements, and student debt cancellations have been wiped out by rising inflation.
> All the cost to Pay Back 3 rounds of stimulus (should have been 1, with 2 at most) has held us back for years now. Rent has skyrocketed to make up for it, no such thing as student debt cancellation, as it just shifted the cost to the Working People, so they will pay for the other parents children’s education, while the kids get no real education worth value, no loans to pay, but don’t look for Mom & Dad to assist any further…
Oh, and Inflation, the “Real Tax” on people, thanks!!!
The state-subsidised electric car market has crashed in China and the country is trying to dump the vehicles on the West, but the same is happening here as well. For manufacturers it’s going to be a blood bath. Ross Clark has the details in the Spectator.
They’re not even cost-effective, says Clark: “Not only are EVs themselves 40% more expensive to buy than petrol cars, but they are also costlier to run. The average charge for refuelling at a rapid charger is 22p per mile, compared with 17p for petrol.”
Over to Jeff Green…. who is busy buying up all these unwanted EVs for next to nothing cuz?
I’ve always said the EV’s are just a transition/bridge to H2 vehicles, which don’t require the huge batteries and where existing gas stations can be adapted to deliver the new fuel.
Exactly the way totalitarian communism is always “just a transition/bridge to” some child’s fantasy of what she has been told is some Utopia. Because, like, an “expert”; was it Marx or Musk?; said so!!!
Very well said!
The West can’t afford GV’s right now, so don’t look for the West to buy up all the China EV’s. In reality, the World can’t afford EV’s right now. Good Luck with your dump China, no buyers here…
Any and All state subsidized projects crash, with the state Politicians getting lots of donations to their coffers, but American workers and families getting shafted once again with the (tax) Bill!!
The irony of it all, is that China is the Perfect Playground for EV’s. Much, much more so, than anyplace in the West! If they can’t or won’t sell in China, then they are not worth owning, as that is your prototypical Place for them!
“The great electric revolution that was promised just three years ago is already failing – and it will bring the car manufacturers down with it”
Yep!!! Jumped the shark yet again…
My Euro car was recently run into by a kid on an electric scooter. Dented two doors which are made of aluminium. Creased the door skins which couldn’t be repaired. Two new doors fitted plus colour matching the whole side of the car – cost = $7000.
If the doors had been plain metal then simple ventless paint repair which would have been far cheaper.
I took my car to the panel shop. There were at least 50 cars there with a small amount of damage but all had hazard sharps stickers on the windows.
I asked the repairer about those cars. Stolen cars – suspected stolen by drug addicts.
Cars had to be throughly examined by two specialists for hidden needles or drug paraphernalia. This included removing most of the interior and checking in sills under dash ect – exterior everywhere. Specialists dressed in PPI and anti needle stick gloves.
An inspection clearance declaration to allow the repairers to go ahead and another clearance before the car was handed back to the original owner.
In many cases the cost of the inspections and repairs exceeded the value of the vehicle. Crashed vehicles which had been stolen by drug addicts with remaining blood splashes around the car were invariable scrapped.
Wow! Never heard of that. Life is getting to complicated.
Planned obsolescence is now standard equipment.
I tried to warn people and all i got was ridicule. i said it’s not ice or ev, it is neither. those who ditched the car are way better off saving a ton of money that can be used to invest.
people need to learn to live within their village like 99% of the planet.
but keep buying those worthless cars and paying sky high insurance, i am laughing all the way to the bank collecting dividends and share appreciation.
…..$…..$
Your priority seem to be stay at home like a couch potato to make more money. One of my priorities is to travel to places where an EV would have 0% chance of making it.
My 4-Runner (or something like it) is not worthless, it is invaluable for my priority.
Trying to force your priorities on others and/or mocking others who don’t have your priorities is just what you are doing now.
But yes, in general, may people struggle to maintain a lifestyle they cannot afford. The way you phrased things, is arrogant and condescending.
I don’t sit like a couch potato, summer is almost here and I’ll be heading over to sail Scandinavia so you won’t be hearing from me for a while as I’ll be on a boat with no internet.
There is a strange dichotomy on this site. people complain about the high cost of everything as if they are entitled to their lifestyle and I am merely pointing out that everyone will need to make changes moving forward due to high inflation that won’t be going away.
I have given the reasons why, too many retirements too much government free money and not enough young people. Throw in hostility to immigration and trade wars and lifestyles in America will easily decline 30% right off the b at over the next 10 years.
There is no politician that is going to fix any of this mess and I honestly don’t know what it will take to fix it. All I know is that everyone will need more money to do the things that are important to them.
Enjoy your trips to the open country while you can, all good things eventually come to an end.
Basically, I agree with you. I sold my car and rode my bike everywhere. I was a bike commuter for twenty years or more, although I did purchase another car. Humans must adapt, ask any dinosaur.
Well, since you don’t have to keep your eyes on the road and your hands on the wheel while you roll baby roll, you’ll fit right in to a Bill Gates 15 minute city. Enjoy the bug meat.
I must agree with Mish. The I told you so, is unnecessary and everyone can now say that.
You must live in the city, because I have lived in many different states in my lifetime, and very rarely is a car not necessary anywhere but a city, but that would also depend on which one.
Most people don’t have $$$ to invest.
The condescending laughter at the end, did it for me…
And it’s worse if you own an EV.. cuz even slight battery damage means the entire battery needs to be replaced
Right Jeff/
Don’t Forget, they also have to be disposed of properly, and at considerable expense. good luck with that…
Example Battery Cost:
The Tesla Model 3 will take you over 300 miles on a charge and the replacement battery costs around $16,000. Labor costs to replace that Tesla battery will run you an additional $2,300. That’s because swapping out the battery pack on most electric cars is a complicated task, similar to replacing the engine in a gasoline-powered car.
So 65K for the car, 18K for a new battery, and just to buy one, you’re looking at over 80K right out of the gate. Forget charging cost, typical repairs (also more costly) etc. You’re up to 100K in no time, and that’s guaranteed!!!
Good luck with that too…
ONBEVS. Only Morons Buy EVs.
Agree
“mposhit, papascam, makra, imgreen, realist, jeffgreen”
Wonder if gaslighter, multiple alias, troller extraordinare is going to comment on this one. Gaslighter claims he doesnt own a car. Cant believe anything gaslighter claims, I mean after all We werent listening that he claims to have moved from Chicago to Texas.
Isnt that a classic from gaslighters, “you werent listening”
“I looked at a condo today and another one a few days ago in a nice area and may put in a low ball offer to see how desperate people are to get out.”
Just wondering when hitchhiking, do you feel safe checking out the condos?
This will all be moot in a few years as fully autonomous cars begin to take over the roads. There will be less accidents and therefore less insurance claims. And less human deaths and maiming.
When all the cars on the road become autonomous (i can see a mandate for this, starting, of course, with my state of CA (where a state Senator is currently trying to pass a bill requiring cars to beep if they exceed the speed limit by 10 MPH by 2032)) there won’t be any need for insurance at all, since networked cars will not crash into each other (except in some sort of massive computer network error).
In fact, people will not even own cars. Cars will be provided as CaaS (Cars as a Service) within minutes after you call for one.
The self-driving vehicle is always promised as just right around the corner, but we never seem to actually get there.
Even if we do get there, the machines aren’t going to operate flawlessly. Mechanical failures, system failures, hacking, sabotage, fraud, and many of the rest of the problems behind accidents will remain.
There is always someone who has a quip about the slow advancement of technology, sigh.
Right now, Waymo recently received permission in CA to drive fully automated for-hire cars in not only SF county but also most of San Mateo county, (directly below SF) in all forms of traffic..
As to accidents, there will be some in the early stages of the rollout and the media and people such as yourself will make hay of them. But the reality is that 41,000+ people DIE in vehicle accidents EVERY YEAR. Whatever accidents occur with autonomous cars will be far, far, far less than the carnage that human drivers produce each year.
This reminds me of a joke I heard many years ago:
Bill Gates was having lunch with the CEO of General Motors. Bill bragged that if autos had progressed as fast as computers, cars would get 1000 mpg and sell for $2500.
The CEO of GM retorted, “Our customers will not tolerate cars that crash twice per day.”
“This will all be moot in a few years…”
Yup!
I know that will happen for afact. Because my retarded cousins got a welfare check with money Powell had stolen from the two remaining Americans competent enough to build a car, and inveeeested it in the tooth fairy!
Here’s a tie-in article:
Let’s Imagine you own a 7 -10 year old car, with a REAL retail (if sold by owner) value of $7500 (on an original $15,000 Car). Thus it has depreciated by 50% or maybe more but I rounded this because SOME cars hold their value better (Subaru and Toyota).
Then you get sideswiped and no one is hurt but it takes out the entire Left Front panel and bashes into Engine and takes out the Fuel Inject, puts holes in the Engine, wipes out the radiator, alternator, and so on.
The Insurance company will give you $3500. $4,000 less than the retail value. You can do nothing about it.
Why didn’t they give you what you claim is the full value? I assume this is from first-hand experience.
Insurance companies pay wholesale value not retail value when they total a car.
You know the old saying that a car drops 10% in value when you drive it off the lot. It’s true. If you were then wrecked the insurance company would only pay wholesale value (ie your trade in value) for the car and you’d be out 10%. For people buying with no money down, they get extra insurance called gap insurance to make up the gap between wholesale and retail value. Obviously this costs extra and many don’t buy it.
With regard to the TGT chart. Five waves up and a beautiful island top.
👍
When the lines started to break apart in 1970 and productivity kept going up but wages after inflation didnt, we became a poorer country with only the top 10% benefitting. A poorer country meant that more and more people would have increasing problems affording and covering their expenses. The 10% had help. Their government helped a lot.
The trend for all consumer goods has been “needlessly complicated and not user serviceable”.
Planned obsolescence is not good for the consumer when inflation and labor shortages are running the show.
In freer countries, the cars; and especially the scooters/bikes; sold, are still increasing in reliability year over year.
But when complexity itself gets mandated by a totalitarian junta then, yes, reliability inevitably suffers.
In America, a compounding effect is that the country is rapidly getting poorer. We’re effectively part of the third world now. Third worlders have always had to make do with worse quality products than those in the first world.
https://m.youtube.com/watch?v=Q6TTOx9I6y0
Its even worse for EV’s. If there the battery is compromised in any way the car is written off because replacement is usually 20K or more.
Last December I was rear ended by a delivery truck. When I was at the repair shop (that eventually wrote it off) I saw an inordinate amount of Teslas there getting repaired. I was told it’s big business because even a minor dent means major repairs because of the giga casting which means nothing is easily replaceable so it means specialty shops are the only place you can get the work done. It’s why EV insurance or rather Tesla insurance is skyrocketing in cost.
You really can’t take a chance that the battery is not compromised given it’s high voltage and a battery fire is unextinguishable.
I am about to go back to my old plan of my youth of buying junkers and insuring with only PL and PD, essentially self insuring except for liability.
If you have repair skills this is the way to go for sure.
You’d be surprised what’s considered a junker these days. Cars that are 10 years old are worth nothing if they have 120K miles on them. Many of them are still very nice cars (in Florida you’ll get one with no rust and very often a clean interior) but for insurance reasons are considered junkers (even a minor collision that is a 3K repair bill will cause the insurance company to send you a check for 2-3K and total the car).
If you don’t mind a rebuilt title, you can get a practically brand new car for peanuts. My Lincoln SUV was rear ended and written off in December. It was 3 years old with <30K miles. The cargo area was destroyed but the front/back seat area’s were pristine. It was sold as salvage title. If someone could do the work to rebuilt the cargo area (or didn’t care whether it worked all that well in terms of the lift gate) they’d have a perfectly good car with very low miles.
I did exactly this with a rebulldable title on a BMW I bought at copart for $4k. You have to think of it as a disposable car. Any engine or transmission repair is easily going to cost 4-6k. If I get 12 months out of it I consider it a win
The other problem is my car is blacklisted for some reason by insurance companies. Only one “special lines” company will insure it, even without collision coverage
Exactly and yep I am a bit of a shade tree mechanic and have been since I was a wee un. I have made a few bucks flipping junkers/transpo cars at points in time in my life and might start doing a few if I can work around Cali regulations. Would probably stick to Sube’s, Toys, and Hondas eg cars that really last if treated well
Yes, the gold ole days: NO collision on my $400 ’62 Chevy Impala. Piece of shit. It finally got towed off. It was bashed in by a hit and run driver while was back to Illinois for Xmas.
Insurance may become a thing of the past.
Buy used and buy seldom.
Legally you can’t drive without it and lord forbid you ever get in an accident because you’d be sued for everything you own.
In VA you can pay a yearly fee of $500 to legally go uninsured.
“Every person registering an uninsured motor vehicle shall pay a fee of $500 at the time of registration. Payment of this fee allows a motor vehicle owner to operate an uninsured motor vehicle; however, payment of this fee does not provide the motorist with any insurance coverage.”
https://www.dmv.virginia.gov/businesses/insurance/umv-fee#:~:text=Every%20person%20registering%20an%20uninsured,motorist%20with%20any%20insurance%20coverage.
LIABILITY ONLY. Collision and towing and even COMP can be eliminated or negotiated down. FOR YEARS, I maximized my Deductibles….to $5,000 and essentially “self-insured” and the savings over my $22 autos and RV’s was over $68,000 (over 40 years of driving). It was averaging $1500 to nearly $2000 annual savings (I had four Motorcycles, RV’s, 3 Cars, etc. – all at the same time when it hit me it was time to DOWN-SIZE).!!!!!!
I live in a big apt. complex, and I’ve noticed that my neighbors are no longer fixing the dents and scrapes on their cars.
Makes an opportunity for entrepreneurial people with their own shop and repair skills. Buy a “totaled” car at auction with repairable damage. Explains the growing used car market for vehicles with “salvage” titles.
I think the demand for salvage title vehicles is more a function of regular vehicles being unaffordable for many.
Insurance companies aren’t stupid. They wouldn’t take the loss if they could properly repair it for less than the value of the vehicle. Many of the salvage title vehicles are rebuilt by someone looking to make a quick buck by cutting a lot of corners. Once in awhile you can get lucky with one of these vehicles, but others are rolling death traps. If you can repair it yourself, at least you’ll have an idea of how to fix the myriad issues that may crop up later.
The real issue is the design of modern cars. Repairability is not a concern when these cars are designed. The endless electronics are problems looking for solutions, and when they start to fail (or get damaged in an incident), costs can skyrocket. It’s simple enough to make an aftermarket piece of sheetmetal or exhaust or even swap an engine, but customized electronics are a different story. You may have one of three or four different computers in the same year and model vehicle to perform a simple task that is dependent upon other options your specific vehicle has, and if you get the wrong part (one that works fine in a slightly differently equipped vehicle), it won’t work. Things are too customized and too complicated. Just the diagnostics to figure out what is wrong can quickly exceed $1000 on today’s computerized rolling tin cans.
Crumple zones and a bunch of airbags also serve to save people, but that comes at the expense of the vehicle. What might have been a simple repair on a 1970s vehicle quickly becomes a 5-10k repair just for airbags and cosmetics.
Interesting. We had a 2014 Honda Odyssey Elite that was a “college” vehicle right up until 4 weeks prior to graduation when it was rear ended with what I thought was minor damage at a stop light. Insurance declared it and wrote me a check for 14k.
Lucky to get $14K.