It used to be a problem just for the high-school kid with a ten-year-old Mustang: Get in a fender bender and the insurance company declares the car a total loss because the repair cost is greater than the value of the repaired car. But these days owners of expensive cars are getting the same treatment. The culprits: air bags and high-tech, high-cost parts.
According to trade magazine Collision Repair Industry Insight, the fraction of cars totaled by insurance companies after a crash grew from 8 percent in 1992 to 16 percent in 2003. Insurance companies generally won't fix a car if repairs cost more than 65 percent of the value of the car. "We're getting closer and closer to a disposable car," says Danny R. Bailey, chief operating officer of Overland Park, Kans.-based Carstar, a collision-repair chain.
Replacing air bags can cost up to $6,000. The ones in the front (mandatory for both driver and passenger since 1998) run $1,000 apiece, and there may also be a few side impact and side curtain bags. You can't install a used one — insurers insist on factory originals.
Bailey is pushing for a certification program that will electronically test salvaged air bags. But air bags aren't the only problem. The headlight assembly on a new BMW 5 Series car costs $1,900; for the Lexus LS430 it's $2,000. Aluminum structural parts like those in an Audi A8 or Jaguar XJ often can't be repaired and must instead be replaced. The radiator support in the new Ford F-150 is made out of a magnesium alloy. The alloy mount is lighter and more durable than a steel one, but it can't be repaired if seriously bent.
Body shops like Bailey's are the losers in this. But when they do repair a car, they can take solace in the fact that the average bill for a collision repair rose to $3,519 in 2002, up 43 percent from a decade earlier, according to the Highway Loss Data Institute.