January 20, 2004 > A Crash Course
A Crash Course
A glimpse into the world of Collision Repair
by Kathy Mello
Happy new year on behalf of Team TGIF! I am refreshed by the thought of 2004. I think we can all agree that the last few years have been challenging and that so much has changed. It seems that the only thing we can count on is the fact that change continues to be the one certainty. Change has even taken place in the collision repair industry regarding the type of repairs that we are seeing.
In 2002 we were doing mostly smaller "bumper jobs" due to the fact that the freeways were jammed and cars were driving slowly and close together. Now that traffic has diminished, we are driving at greater speeds resulting in greater damage when an accident occurs.
As a result, and with the addition of airbags bearing an average replacement cost of $2,500 per bag, there are more cars being totaled out. A total loss classification occurs when the car is deemed "not financially feasible to repair.
Not only is this scenario difficult because it is unexpected, but it can cause a change in plans. An example of that happened to my mother. At age 70 she purposed that the car she owned would be her last. Her perception was that by taking good care of it, the car would last her until the end of her driving days. That was until her purse fell off of the seat one day and spilled to the floor. She compulsively bent down to retrieve the contents, and in one split second she found herself connected with a parked car.
(The scary part is that they say we ladies become our mothers, and I recently did the same thing.) The good news is that neither she nor her passenger was hurt. After all, the car was replaceable and at age 80 she is driving in a newer, safer vehicle with airbags as a result.
It can be a dark path down total loss lane, and knowing what to expect can possibly shed some light on this unwanted journey. The process begins with the repair plan done by a collision expert, or the insurance
company writer. The data is collected and the total loss determination is made by your insurance company. Each company has its own formula for that valuation. Once total loss is determined you should hear from your insurance company, and your file is then transferred to the total loss department where they do their market value research. This process takes from 5 to 10 days (another good reason to carry car rental coverage unless you have a spare).
During that time, it is a good idea for you to do your own research by checking the Kelley Blue Book, browsing the classified ads, the auto trading magazines, car lots, and the wonderful web (see www.cars.com, www.kbb.com, or cars-on-line.com, just to name a few). This process will educate you and the documentation will help you to negotiate a fair settlement when the time comes.
There is such a thing as an "obvious total loss" which is when the estimator can just look at the vehicle and see that the cost to fix it is too great. The other extreme is the "marginal total loss" which means that there may be a chance of repairing the vehicle by utilizing aftermarket or used parts. The exception to this is that some insurance companies do not allow aftermarket sheet metal to be used.
Although your insurance company will handle your total loss claim, you can expect your collision repair expert to help you through this process. Both the body shop and the insurance company welcome the opportunity to repair your vehicle so if it is feasible, they will work in that direction on your behalf when possible.
There are a few pitfalls that we have seen in the "TL" situation. One example is when a person (usually a teen) owns vehicle of lower market value (say it's worth $3,000.00) and they have $5,000.00 worth of stereo and accessories. Unless there is a rider on the policy for the extra equipment, the payout will be based only on the market value of the vehicle and not the accessories.
Another unique situation is when a car is financed and the finance company has imposed insurance for a non- insured (perhaps the policy has lapsed and has not been reinstated in a reasonable amount of time.). The finance company will then impose an insurance carrier of their choice. In this case, to save on costs, they will sometimes only insure the vehicle for the amount of their liability (the amount you owe them for the vehicle). If you only owe $500.00 on the vehicle, it could total out at that amount of damage. This is another good reason to keep your insurance current.
There is the possibility of buying your salvaged vehicle back. Caution should be used in this choice. So many of us are attached emotionally to our cars (Do you have a name for yours like some do?). We do not want to let go of it when it is deemed "TL". The difficulty with buying it back to repair it is that once the money is spent to do that you risk losing if you have another accident, as you will only get the current market value at the time regardless of how much you put into the repair. A vehicle with a salvage title is also worth less to resell. Rich Mello, founder of TGIF Body Shop, cautions that "We should not remain emotionally attached to our vehicles". Although this is sometimes difficult advice to take, this statement becomes more relevant as total loss vehicles become more common.
The good news about replacing that salvage vehicle is that there are many new car "deals" with no money down and no/low interest loans. As a result, used car sales are competing for your business. It is a buyers market now; remember to consider the longevity of the car's value when you choose your new car. If you find yourself in a total loss situation with no one to talk to, please do not hesitate to call us at TGIF. Our qualified staff will be pleased to address any unanswered questions.
Here's hoping you never have to go down this road, but if you do, we are here for you. Let's share the best in 2004!
T.G.I.F. Body Shop, Inc., founded by lifelong resident Rich Mello, has been serving customers with collision repair since 1980. Please call us at 510 490 1342 with any questions or topics that you wish to have addressed.