Thursday, November 28, 2013

Diminished Value: Things To Be Thankful For

The In's and Out's of Diminished Value

     Thanksgiving is once again upon us.  A holiday replete with family gatherings, enough food to feed a small army, and of course the inevitable food coma.  While some may be thankful for their grandmother's yams to come, there are others in the automotive world who may be looking for more to be thankful about.  Whether you be a fan or a foe of the canned cranberry sauce that is likely to rear its head, I present you with your 2013 Things to Be Thankful For, Diminished Value. If you have ever owned an automobile, or ever plan to, this is a concept that I urge you to familiarize yourself with.  This post is meant to serve as an informatory guide as to how best to navigate the waters of the sea that is diminished value.

What Is Dimished Value, And Why Is It Important?

     No matter your geographic location,  it is almost guaranteed that to legally drive an automobile, you must meet certain insurance minimum requirements.  There are undoubtedly those who drive without it, but these drivers would fall within the minority of the driving population.  I start with mentioning auto insurance coverage, as diminished value is a legal term and financial tool that often involves insurance carriers.  Diminished value in layman's terms is described as the approximate monetary value of a given vehicle prior to being damaged, and the adjusted value of a vehicle that results from a given collision or damage related incident. 
     Your car was worth $25,000 prior to being hit by that oblivious driver performing an illegal U-turn.  The cops are called, liability is determined, and your car is towed to a repair facility.  Even if the auto body repairs were performed flawlessly, your car now is the proud owner of a Carfax report, and in good faith you must tell future potential buyers about the vehicle damage.  So this all seems fairly straightforward, so what's the big deal?  Consider this: certified cars salesman initially will deduct up to 40% of trade in value as the result of one Carfax accident report.  Forty percent is a significant loss no matter what the value of your vehicle, and as the value of the vehicle grows, as does the amount of money you lose as well.  If you cannot understand the importance up until this point, private buyers are terrified of Carfax accident reports, and shy away from vehicles with a past.

How Do I Go About Submitting A Diminished Value Claim?

     Diminished value claims are not met with a high amount of praise when viewed from an auto insurance carrier perspective.  Then again, what auto insurance carrier likes to pay one cent more than they have already paid on behalf of their insured?  These auto insurance carriers will try to say that there is no law on the books that requires them to pay for these claims.  Again, they will do anything to talk their way out of paying more money.  I can tell you first hand, I have aided dozens of customers through this process, and every single one of them was successful in their pursuit of diminished value.  As you may know already, I work at a high-end auto body repair facility, meaning that the average value of our customers' vehicles may be higher than your average repair facility.  However, out of the many diminished value claims that I have personally been involved with, the range of claims have ranged from around $3,000-$22,000, depending on the value of the vehicle.  The higher the value of the vehicle prior to the accident, the higher the amount of diminished value as a result of the accident.  Now that you have an understanding of the basics, let me give you a few pointers and important information as to your diminished value claim.

1. Diminished Value Claims Cannot Be Filed With Your Own Insurance Carrier- In other words, dimished value claims can only be filed through the auto insurance carrier of the liable party that damaged your vehicle. This is one of strongest arguments for always going through the insurance carrier of the responsible party, as your premiums cannot be affected, and you can pursue diminished value.  If you go through your insurance company when you are not liable for the damages, diminished value can still be pursued through subrogation, though it is far more time consuming and complicated.

2. Police Reports Equal A Carfax Accident Report- If the police issued a citation or wrote up an accident report, it is more than likely that your car now has a tainted history.  These are the reports that car dealers use to greatly reduce trade in value, and private buyers hate to see.  Even if the damage was minor, these reports do not really differentiate between minor and extensive damage, meaning small accidents come with the same financial consequences as large ones.  Carfax or other history reports increase the amount of the settlement as a result.  A Carfax is not mandatory for diminished value, but if your car was repaired properly, with no lasting consequence, sometimes it may not be worth your time.

3. Unless You Want To Increase The Chance Of A Total Loss, Report The Diminished Claim After Repairs Have Been Completed- I have seen many customers pursue diminished value from the very onset of the vehicle damage, and I have seen these same customers lose their cars to total loss more often than not.  Insurance companies will almost never total a car after it has been repaired, as the repairs have been completed, and the repair facility has been paid.  Then the diminished value claim is seen as a separate part of the claim, whereas if initially pursued it is added to the total cost of repairs.  So unless you want your car to be totaled, have some patience and wait for the repairs.

4. Who Can Help Me With My Diminished Value Claim?- A reputable auto body repair facility should be able to direct you to a diminished value professional. These diminished value professionals will sometimes work with a base fee, that increases as the diminished value increases (<2000=$150, >5000=$300, etc.).  Others work on a percentage basis, feel free to choose whichever you are more comfortable with, as percentage basis will be a larger fee, but serves as larger motivation for the dimished value professional to complete the claim.  You can also help yourself through the process by taking before and after photos, asking a dealer what they would pay for your car wrecked, and providing a carfax report as proof of a dimished value to come.  

Wednesday, November 27, 2013

One Car, Two Car, New Car, Used Car

     In the world of car buying, many people seem to have some strange ideas and strategies for the best way to buy an automobile.  There are various species of car buyers and sellers in this world, each of which comes with a particular set of identifiers.  While buying or selling your car may seem like a fairly straightforward concept, I can promise you that there are a wide variety of ways in which you can go about it.  The various scenarios are often influenced by the amount of effort required, the general understanding of the car buying and selling process, and the amount of cash a particular person has in the bank or under their mattress.  Regardless of what type of buyer you may be, I can promise you that there are good and bad ways of navigating through the process.  Unless you enjoy putting your hard earned money in the garbage disposal for kicks, I suggest you continue reading.

Vehicle warranty finances new car buyer
1.  Time Is Money, and I Spend It Like Its Going Outta Style
     For those of you who may be unfamiliar with this young fellow to the left, his name is Kanye West, and I have decided not to comment on his outfit.  This particular photo of a particularly successful human can be used as an extreme example of the first type of car buying scenario.
     If you happen to be so successful that you need golf gloves to properly hold your many Grammys, or multiple solid gold watches to properly tell time, then clearly money is of no issue. In fact, if you are anywhere near this level, I'm not entirely sure that this post is of any use to you.  To put it plainly, buying a brand new car off the lot is akin to paying a high-priced travel agent to book you a vacation.  While you may not have to exert any effort beyond paying the bill, you yourself could have booked the same vacation (if not a better vacation) for less than half the price. The car buying experience that can be found at a new car dealership is very similar to the travel agent scenario.  You are paying more for the experience than you are for the vehicle that you drive off the lot.  In fact, the instant after your beautiful new shiny car leaves the lot, you will lose anywhere from 10-30% of the value depending on the make and model.  All warranties and ass-kissing aside, you are throwing money away, just to say you bought a "new car." Again, if you are short on time and energy, and long on resources, by all means, this scenario may suit you best.  However, if your biggest concern is finding the best possible vehicle within your budget, I highly advise you against scenario #1.

2. I Have The Money, I Have The Time, I Want The Best My Money Can Buy

buying used car tips automobile
     For your information, this is the camp where I choose to reside.  I am by no means wealthy, and I have no crystal ball.  That being said, I do have a lot of experience in the automotive industry, with an emphasis on high-end collision repair.  Though I may have more knowledge and experience than most, I by no means am the foremost expert in the field, nor do people pay me for my wisdom.  Even if you have little to no experience or knowledge as it relates to automobiles, there are a wide variety of resources available to you.  Wherever your geographic location may be, there are reputable mechanics and collision repair specialists who would be more than happy to help you, often free of charge.  Fostering a relationship with knowledgeable people in the industry can be a valuable asset in the future.  Whether you consult them for future vehicle purchasing, or maybe you have a light on in the dash, they often can save you time, energy, and money.  It never hurts to grease them up with a tip for their time and effort, which is what I do in similar situations.
     Perhaps you are unfamiliar with any local mechanics or body shops in your area, which is not uncommon. You can always call a local dealership and ask who they would suggest for such services, or you can consult any one of a number of online forums for information, reviews, and further insight.  If all of the above methods fail to provide you with the necessary information, you can always go the route of a vehicle history report.  Two examples of such vehicle history reports would be Carfax, and Experian Auto Check. Although, if you have read any of my earlier posts you will find that these services can be wholly inadequate from a vehicle damage history perspective.  These reports can be very informative as they relate to a number of total previous owners, maintenance records performed at the dealer, and the status of the title.  However, all of this information can be found through your local Division of Motor Vehicles, or by calling into local dealerships with a Vehicle Identification Number.  If a particular person is selling their car, it is likely that they will have maintenance records on hand, and should be viewed as somewhat suspect if they do not.
     If scenario #2 seems to fit your particular needs and desires, then you think in a similar fashion as myself.  The main reasoning behind this scenario is that you want to find the best possible car given your budget, while mitigating future risk by doing the right amount of due diligence. If you are willing to be patient while searching for your desired car, while collecting all the information you need to make an educated decision, you can find a great if not pristine car at a sizable discount.  Here are a few things to keep in mind for scenario #2.

  1.  Be Patient- You don't need to pull the trigger on the first car you find, find comparable vehicles so that you know you are making the best decision.
  2.  Use The Resources You Have Available- Unless you are Kanye West, or have little to no concern about the value of your investment, take the time to research prospective vehicles.  The little extra time and effort will make all the difference in making the best decision.
  3. Listen To Those Who Know- If you have taken the time to consult knowledgeable parties for a professional opinion, do not shoot yourself in the foot. Even if you are completely in love with a particular car, if a professional advises against it due to its shortcomings, take their advice. There are always more cars, refer to tip number 1.
  4. If It Seems Too Good to Be True, It Probably Is- Would you trade $5 dollar bill for a $1 bill? If you answered yes, then I am sorry, but the intelligence train missed your station.  It's very similar with automobiles, if a particular seller is selling a car for far less than market comparisons, there is likely a big reason for the big discount.  There are exceptions to this rule, but as long as you have followed tip number 2, you should feel comfortable in your decision.
  5. A Previously Wrecked Car Is Not A Deal Killer- I know that most people have ten bad experiences with cars for every 1 good experience with them, however, this should not be the case.  Yes there are lemons out there, and yes people can be dishonest, but if you have followed the tips listed above then you should be fine. Wrecked cars are only a bad idea if they have not been repaired properly, and if the seller is unwilling to disclose many details.  Consult your local professional with the details you have been given, they can help you decide whether or not to move forward.

3. So What If It Has A Salvage Title? The Seller Said It Was Minor Damage, And It's A Screamin' Deal!!!

salvage title vehicle damage history dangers    You likely stumbled across this blog because you Googled "how to buy a new car", or "how to buy a great used car for less?" If you did in fact use one of these search queries, or any other similar search, then you should not ever even consider buying a salvage vehicle.  Let's say you followed the five tips enumerated above religiously, then you should probably be more or less okay.  Buuuut, I would strongly advise against it. I cannot tell you how many times I have heard people say, "Yeah it's a salvage title, but it was hit from
behind, so it's good mechanically." Or how about this one, "It wasn't even wrecked, it only has a salvage title because it was a theft recovery!"  Wrong, wrong, wrong, stupid, shameful, and wrong again. Salvage title cars have either caught fire, been inundated with water, stolen for an incredibly damaging joy ride, or the insurance company deemed that the cost of repairing the vehicle would be equal to or less than 75% of the overall value of the vehicle if it had not been wrecked.  If someone pitches that a car has a salvage title due to rear end damage, what does this tell you?  That the particular car was hit tremendously hard from behind to achieve such a high cost of repair, as there are very few high dollar mechanical parts in the rear.  The same goes with a theft recovery car, someone drove it as hard as they could, until they got caught, or until the engine ceased.
     While a similar, but more stringent, rule applies to buying salvage vehicles, unless you are a knowledgeable car buyer, do yourself a favor and move on to the next car.  As long as a salvage vehicle has been repaired properly, then other than the diminution in value, it should be a perfectly good car. HOWEVER, salvage vehicles are notoriously purchased by pride less bottom feeders, who have no pride in their work, cut numerous corners throughout the repair process, and render a car unsafe to drive and impossible to sell. Do yourself a favor and don't venture into the netherworld of compromised salvage vehicles, because you most likely get bitten.  Best of luck, and happy hunting!   

Tuesday, May 28, 2013

Cheap Auto Insurance Continued, The Claim Game

     Thank you for calling Wreck Repair Report's claim center hotline, for Spanish oprima el numero uno.  For those of you who have had to suffer through the automobile claims reporting process, I feel your pain.  With everything that is thrown at us in a given day, things like work, school, offspring, sleep, overly involved neighbors, most of us do not have the luxury of scheduling an unplanned car accident into our calendars.  Whether your unfortunate incident results from a distracted text happy tween. Or perhaps a disgruntled shopper wielding a sharp key in the parking lot, chances are, submitting an auto insurance claim is an unwelcome addition to your daily schedule.  It is fair to say that most people do not anxiously await the day when they finally get their chance to submit an auto insurance claim.  That being said, let me enlighten you with how your hard earned cash is translated to service from a claims process perspective.
      Just like many other things in life, with auto insurance, you get what you pay for.  Think about it this way, let's say you need a new hose for your backyard, so you go to a hardware store to get one.  Once there, you discover that there are over twenty choices to choose from, ranging from $12.00 to $85.00.  Being that you are not likely a garden hose expert, you choose a hose for $15.00, and head home.  After hooking up your new hose to the faucet and turning on the water, it begins to flow as expected.  However, there is a small leak at the connection point, the hose kinks itself easier than you would prefer, and attaching various watering nozzles requires a decent amount of time, energy, and frustration. Depending on what type of person you are, you either deal with the added inconvenience and keep the hose, you exchange it for the same hose as yours seems defective, or you return it and buy a hose four times the price of much higher quality.
claims insurance automobile representative
      You know what they say, hindsight is 20/20. Learning this lesson with a new garden hose doesn't set you back much, other than wasted time and gas.  Shopping for and choosing an auto insurance carrier is quite similar to the hose situation described earlier. However, there is much more at stake should you have to learn the lesson the hard way, to include time and money spent, procedures you must perform, and how much you are valued as an insured customer.  Again, it all depends on what type of person you are, and what type of value you place on quality, performance, and customer appreciation.  I don't want you to learn your lesson the hard way, so let me help you avoid the hindsight headache, by helping you develop foresight based upon your personal preferences.

 Involved Customers Who Expect High Levels of Service & Appreciation

     If you are this type of customer, you most likely expect and demand the highest quality services and products, that assure you of the value of your investment.  Furthermore, you most likely expect a certain amount of respect and appreciation as a customer, where your desires and preferences are accounted for, and held in high esteem by your insurance carrier.  Any amount of involvement desired throughout a vehicle related incident, and subsequent claims processes, is welcomed and encouraged. If you find yourself in this customer category, there are a few things you should keep in mind.  As my experience involves higher end vehicles with high book values, most of the customers I interact with fall within this category.  Regardless of whether you own a Honda or a Bentley, you owe it to yourself to do what you can to protect the value of your investment.
     Before pulling the trigger and purchasing an auto insurance policy, there are some questions you should ask first, whether through consumer reviews or an actual insurance agent.  Questions such as: ---  -What Direct Repair Facilities do you use? 
-Are any of these repair facilities recommended, authorized, or certified by the dealers of my vehicle?
-Are only factory OEM parts used, or what is your policy for aftermarket/reconditioned parts?
-Are there adjusters that you employ locally, and what is the procedure for vehicle inspection?
-What is my expected wait time to schedule an inspection with an adjuster?
-How are claims submitted, with a live person over the phone, or electronically via the internet?
-Will my opinions and concerns be accounted for during the repair process?
-How often is betterment applied during vehicle repairs?

     I am sure that some, if not all, of the insurance jargon used in these questions may be unfamiliar to you. So let me break it down for you.

Direct Repair Facilities (DRPs)

     First and foremost, there is something that you must understand about these facilities.  Regardless of the catchy name that is used by a given insurance company (Pro-Shop, Preferred Shop, Shop of Excellence, Etc.), these shops are more often than not a classic bait and switch.  As you may have gleaned from some of my other posts, auto insurance companies are more concerned with price than they are with quality.  This is the general rule, it is not the exception.  The contractual agreement that is signified by most DRPs and an insurance carrier involves a given repair shop accepting lower hourly and supply rates, in exchange for the insurance company to funnel them more work.  In addition, these facilities agree to more frequent inclusion of aftermarket and reconditioned parts, as well as lowered repair and refinish times.  In other words, these facilities have a contract to advocate for a contracted insurance company, instead of advocating for their customers.  They often repair parts and panels that should be replaced, they spot paint and open panel blend, and ultimately agree to use replacement parts that are of a lower quality and standard than original manufacturer parts.  DRPs are set up to minimize the bottom line of their contracted insurance carrier, they are not set up to protect the value of your automobile investment.  The exception to this rule is found within automobile insurers that typically insure higher end vehicles, collectibles, and antiques. As these insurance companies charge higher premiums, as the value of the automobiles they insure depends upon a flawless and indistinguishable repair.  I cannot tell you how many times we have been asked to rectify the mistakes of these facilities, often requiring more time and expense than was incurred from the original damage.  

Dealer Recommends & Repair Guarantees

      You should view your car as an investment.  While automobiles depreciate more than other investments, it is always wise to bolster the value of your vehicle by ensuring a proper repair.  While it may seem inconvenient, it is definitely worth the time to call local dealerships to see who comes highly recommended.  Many insurance carriers use the promise of a guarantee to steer you toward their DRPs.  However, any reputable auto body repair facility should have guarantees to match, if not exceed those promised if you only go to Pro-Shop A or B.  In fact, any reputable facility should always have their customers' best interests in the forefront of their minds.  After all, it only makes sense that they should be working for you right?  REGARDLESS OF WHAT IS SAID TO YOU BY ANY INSURANCE COMPANY, YOU ULTIMATELY HAVE THE RIGHT TO HAVE YOUR VEHICLE REPAIRED AT A SHOP OF YOUR CHOOSING.  WHILE THEY MAY ATTEMPT TO STEER YOU TO A DRP, THEY CANNOT FORCE YOU TO TAKE YOUR CAR THERE.  THIS PRACTICE IS IN ALL WAYS ILLEGAL, AND HAS BEEN SO FOR NEARLY A DECADE.

Adjusters & Claim Submission

      Regardless of what type of customer you consider yourself to be, pay attention to this section, as it applies to everyone.  There are a wide variety of processes applied by automobile insurance carriers when it comes to damage adjusters and claim submission.  For instance, many companies employ their own damage appraisal adjusters (State Farm, Farmers, Progressive, Geico, American Family Ins, Allied/Nationwide, Etc.). Whether they set up an appointment to meet you at home or work, direct you to a drive in facility to meet an adjuster, or schedule an inspection once your car has been dropped off for repairs.  These adjusters work directly for a given auto insurance carrier and are subject to a supervisor, who then in turn has a supervisor.  These adjusters often have their hands tied, as they can literally be scolded and punished for not writing best case scenario estimates of damage.  However, they are often the ones with whom you make direct contact, and are quite responsive to customer requests and demands.  Also, many auto insurance carriers have greatly cut down their number of company adjusters, meaning that they are overworked, overbooked, and have less time for initial inspections and re-inspections.  If you prefer heavy involvement throughout the entire process, these adjusters serve as a company representative, and will be quite open to your calls and questions.
      Companies that are not local, or are often smaller in scale, will employ Independant Damage Adjusters (IAs) to appraise the damage to your vehicle.  These adjusters are not direct employees or representatives of a given insurance company, but are rather contracted employees.  They are subject to many of the same rules and expectations of company adjusters, however, they have a certain degree of latitude in their decision making.  While IAs will often write similar initial estimates as company adjusters, they can be more flexible, as they cannot ultimately be fired.  At the very worst, they may not be used as a contracted employee as often.  That being said, they are often quite busy, take a longer time to issue payment, and can be considerably more difficult to contact.  If you prefer less in person involvement, but still like the idea of possible contact, this is something to keep in mind.
      The last category of damage adjusters and claims submission processes, is the electronically oriented auto insurance carriers.  Let it be known, that over the last two years, I personally have seen a huge movement towards these types of systems across the industry.  Some auto insurance companies that have typically focused upon these types of processes will sound familiar to you (Esurance, Ameriprise, and Mutual of Enumclaw for example).  Auto insurance carriers relying upon the electronic claims submission often communicate via email, require extensive photo and invoice documentation, and do not require as much use of in-person adjusters.  These auto insurance companies will either use a third party system for claims and document upload, or will have a system in house.  For those of you who are more electronically savvy, or prefer to communicate electronically, these insurance companies may be more your style.  There is very little to no in person involvement, and most if not all correspondence is done from your computer, smartphone, or tablet.  It would be wise to ask your prospective repair facility whether or not they are electronically literate, because some of these systems require more than a basic understanding of computer processes.  As an aside, just last week I spoke to a third party claims processing representative, that said that most auto insurance companies are beginning to move toward this 21st century option.

How Can Betterment Be a Bad Thing for Customers???

      Really though, how can a work that has better in it be a bad thing for me as a customer?? If you are asking this question, then you've fallen for another bait and switch, sorry.  Whether intended or not, betterment does not represent the "bettering" of a customer because auto insurance carriers just care so much.  Sorry to break your heart, but betterment is actually quite the opposite.  Betterment basically stands for the amount (usually given in percentage) that will be charged directly to the insured or claimant for a given replacement part.  For instance, an adjuster may decide that your damaged tire was so used up, that they will expect you the customer to pay anywhere from 15%-50% of the cost of the replacement part.  Whether you are the insured, or the claimant, you are expected to split the cost with the insurance company.  Even if the accident was not your fault.  This may not be a big deal on your scuffed Geo Metro Rim.  However, if you drive a newer Porsche 911, your cost could be $1400.00 on just one wheel alone.  So you would be quite wise to ask a prospective auto insurance carrier what their policies on betterment are, because with you deductible these can quickly add up.  From my personal experience in the industry, it is unfortunately the larger insurance companies charging higher betterment percentages (Farmers, Progressive, Geico, Midcentury,  Etc.). I apologize if this article was too long for your taste, but you have got to remember, I am only trying to help you look out for yourself.  Happy hunting.    

Thursday, May 9, 2013

Cheap Auto Insurance, Cheap Premiums for Cheap Parts

     Who would have ever thought that auto insurance mascots would ever have reached a level of stardom akin to Justin Bieber or One Direction?  Maybe that is a little bit of an exaggeration.  As I have yet to see an auto insurance mascot with a similar group of fans as the "Directioners", who would burst into tears at the sight of the band, and would likely risk life and limb for concert tickets.  That being said, I'm sure that if I was to mention the name Flo from Progressive, or the Geico Gecko, you could likely recount the plotline from four of their respective commercials.  While these mascots lack fan groups with clever names like "Flo-riderz" or "Geckominids", they have reached their superstar status because of advertising campaigns built upon that all too familiar phrase. A phrase that goes something a little like this, "Come with us, and save money on car insurance in a matter of minutes!!"  Guess what? It's not that simple, let me broaden your view so that you can better understand why.  To put it simply, much like everything else in life, when it comes to auto insurance, you get what you pay for.

CAPA Certified auto body insurance

1. Aftermarket/Reconditioned Parts

    As you read through the various parts of this post keep one thought in mind, insurance companies operate on a for profit business model.  Meaning that in able to decrease premiums for existing and prospective customers, they must find ways of decreasing overall operating costs. Believe it or not, auto insurance carriers do not offer low prices out of the goodness of their heart.  One way that many auto insurance carriers have decreased costs, is the use of aftermarket and reconditioned (used) replacement parts. While this may not worry you if you have an older Honda Civic, it may cause a little more stress if you drive a higher end car such as a Porsche, BMW, Audi, Mercedes Benz, etc. While some companies will only bid CAPA (Certified Auto Parts Association) certified aftermarket parts, some auto insurance companies will bid whatever part they can find at the cheapest price.  While CAPA certified parts are built to a given vehicle specification, non-CAPA certified parts vary widely in manufacturing. CAPA certified parts often have imperfections or appear substandard, while non-CAPA certified often fit poorly on the intended vehicle, leading to disjointed connections and skewed body lines.  In my professional experience, factory OEM (meaning manufactured by the actual company, like BMW parts for instance) are always preferred.  Most aftermarket or reconditioned parts are turned away because of flaws, warping, damage, or improper repair.
Auto Insurance Losers in This Category:
- Farmers Insurance, Geico Insurance, Progressive Insurance, Mid-Century Insurance.
        Reasons for failure: Nearly always bid aftermarket or reconditioned parts if there is even a slight savings in cost.  Little consideration for newer or higher-end vehicles. Will bid non-CAPA certified parts, and often refuse to approve factory OEM parts, unless they will agree to price match.

Auto Insurance Winners in This Category:
- Chubb Insurance, Allstate Insurance, State Farm Insurance, Esurance, USAA Insurance.
        Reasons for Praise: While some of these companies may originally try to bid aftermarket or reconditioned parts, only CAPA certified parts are bid.  These auto insurance carriers will often opt for factory OEM parts replacement, unless there is quite a large discrepancy between prices.  Further, these auto insurance carriers are much more receptive to customer and repair facility requests for factory OEM replacement parts.

     Ultimately for owners of newer model vehicles, or vehicles with a higher book value, this auto insurance trend should be considered. On the other hand, for owners of older model vehicles, or vehicles with a lower book value, it may not concern you that these parts are used to a greater or lesser extent.  Either way, when looking at the cost of premiums, just remember, you often get what you pay for.

Carfax, Used Cars, and Accidents. Is Carfax Outfoxing You?

     There once was a nebulous and dark land, where fear and dishonesty reigned king.  This frightful land was occupied by an endless population of used cars, from the lowly Ford Pintos to the majestic Maseratis.  There were stories of brave souls, who would venture into the shadowy landscape, with hopes of finding the perfect used automobile.  Their quest was not without obstacles. In their path stood greedy used car salesman, prices too good to be true, and mere promises of cars with accident free pasts.  These brave buyers, with all of their good intentions and hope, were left to fend for themselves. Until the arrival of the all-knowing ever powerful Lord Carfax that is, serving wary buyers like a beacon of light and clarity, forever vanquishing the dishonesty and confusion in the used car world for all of eternity!!!

     Just in case you couldn't tell, you just read the Carfax fairytale.  Surprisingly enough, the general public consensus of what Carfax actually provides, is not that far off from the mythical story above. You can credit their marketing director, or perhaps that clever sweater clad fox. However, it is entirely necessary that you understand what Carfax actually provides, before purchasing a vehicle solely based upon a "Clean Carfax Report." As a disclaimer, I am not attempting to tarnish the Carfax name, I only seek to illuminate some of its shortcomings.
Carfax cost accurate damage history vehicle      

1. Carfax Provides Many Services, Accurate Damage History is Not One of Them.

     Carfax reports in many cases provide odometer readings, number of previous owners and registrations, status of vehicle title, occasional maintenance information, and limited vehicle damage reporting.  The majority of Carfax reports are gathered from public information sources, such as DMV records and police reports.  Meaning that most information is readily available to the public for free, although it may take some digging.  Almost all vehicle damage history is obtained from police reports, meaning that there is very little detail and accuracy in the final report presented.  While the police perform a valuable service, they are by no means professional damage appraisers, nor should they be treated as such.  Also, keep in mind that less than 50% of accidents are ever reported to the police.

2. Errors and Limited Information Included in Reports

      As previously stated, policemen are not formal damage experts, and only include information relating to reason for citation, and how a given incident occurred.  Carfax reports as a result are usually limited to the primary area of damage (Front, Left, Right, Rear), whether airbags deployed, whether frame/structural damage was evident, and whether damage exceeded $1,000. From a collision repair perspective, even some of the hardest impacts end up with no structural/frame damage. The only way to actually ascertain whether or not it did, is to remove damage parts, so that underlying damage can be found.  It can not, and should not, be determined at the scene of an accident, unless it is done by a professional appraiser.
     There have been multiple lawsuits filed against Carfax and other related services for the inclusion of inaccurate data (for example reporting deployed airbags when in fact no deployment occurred). Also, there are others who purchased a car based upon a clean Carfax, only to find that the car had experienced significant damage in its past.  To make matters more complicated, the only other indicator of the total extent of damages is if expected damages exceed $1,000.  Let me tell you first hand, whether a Kia or a Porsche, you cannot properly replace a front bumper for less than this amount.
      On to the airbags.  Many people believe that the deployment of any of the airbag restraint systems automatically serves as a deal breaker.  Vice versa, if a car had an accident and the airbags did not deploy, it must have been a fairly minor accident right?  WRONG! Airbag deployment systems are built upon advanced physics calculations, that far exceed the understanding of the common man.  Cars can experience high speed impacts where significant damage is sustained, but no airbags are blown because of the angle or physics of the force distribution.  While on the other hand, other vehicles may be traveling less than 10mph when impact occurs, experiencing comparatively minor damage, where multiple airbags will deploy.  In other words, when accounting for errors in reporting, limited detail in damage specifics, and low rates of accident reporting to police authorities, the damage component of Carfax becomes quite unreliable.

3. Is Carfax Outfoxing You?

     Carfax does provide important information relating to the title status, ownership changes, lemon law status, and possibly maintenance on a given vehicle.  While some of these things hold importance to some people, what most people are looking for when they purchase a Carfax or similar report, is whether or not a vehicle has been in an accident.  Sadly enough, this is the one thing that these reports do not adequately represent.  So, should you buy a Carfax, or Experian Autocheck, or any other related report?  That choice is obviously up to you, and I would not advise against it if it gives you a sense of comfort or reassurance.  However, I strongly advise that you do not rely solely upon these reports as the green light, or the red light, when buying a used vehicle.  There are other steps you can take to learn about past accidents and collision repairs on a vehicle listed below.
-First and foremost, understand that just because a vehicle has been wrecked, does not mean it will forever be tainted.  What is more important, is whether or not the given car has been repaired properly.  Meaning paintwork that is color matched by factory paint code, continuity of texture and color between panels, very minor bondo or filler used, and replacement parts that are preferably factory OEM manufactured.  If aftermarket parts were used, make sure that they are CAPA certified (Certified Automotive Parts Association).
-If a given vehicle has been wrecked, ask the owner or dealer where the car was repaired.  Then place a call into a trusted local dealership of the particular car, and ask which bodyshops/mechanics they recommend, so that you can ensure the car was repaired at a reputable facility.  Almost everyone will say it was repaired at the best body shop in a given city. So no harm in finding out for yourself right?
-Take the vehicle to one of the recommended repair facilities to have them take a look at the car.  You would be absolutely amazed at the minor imperfections a trained eye can catch.  Often times an estimator can tell if a car has ever been painted, repaired, or wrecked just by looking over the car for a few minutes.  This extra step can go a long way.
-Finally, if you do not have the time or the access to any of these options, take a close look at the car for yourself.  Does it have flaking or bubbling paint at all? This could be evidence of rusting, or excessive filler used, meaning that the car was likely improperly repaired.  Do the body lines match up on the bumpers, the doors, the hood, the headlights, the trunk/hatchback, etc.? Body lines should be similar on both sides of the panel, and excessive gaps are another sign of improper repair, non CAPA certified parts, or possibly remaining frame damage.  Taking a closer look can go a very long way.
-At the end of the day, you should look at buying a car as an investment.  You want to ensure that you get the most bang for your buck, and that you are not buying a car under false pretenses.  It is far better to buy a car that has been wrecked and repaired properly, then it is to buy a car with a clean Carfax, as we both know now how dirty a clean report can actually be.

Wednesday, May 8, 2013

Wrecks, Repairs, and the Insurance Realm

     Most people have little concern for the world of collision repair, until they are blindsided by another driver or some other unfortunate incident involving their vehicle.  Some are fortunate enough to never have been involved in an accident, while others seem incapable of avoiding them.  Attracting damage to their cars, as if there is a target firmly planted upon their back.  Whether you are one of the lucky few to have never damaged your car, or one of those who are seasoned pro's, I can promise you that there is still much to learn.  I'll take this moment as my cue to introduce myself.

     My name is Sam Plumb, and I have spent a vast majority of my life surrounded by wrecked vehicles, insurance claims, and everything else involved with the nebulous world of collision repair.  My father and his business partner have successfully operated within the industry for close to 40 years, and there are good reasons as to how and why.  Most notably, they created a collision repair business that does not cut corners, that does not compromise the value or integrity of any vehicle.  They created, and have maintained, something that is increasingly rare in the industry.  They built a business that revolves around the idea of having pride in the work performed, work that produces a final result so pristine, that it is almost as if the damage never occurred.  I am not telling you this to brag about my father's business by any means, I do so only to give you a better idea of the environment in which I operate.

     Throughout my experience working in the industry, I have noticed a heartbreaking trend regarding any type of automobile repair.  It seems as though everyone has ten bad experiences for every one good experience in their past.  This is probably the reason why used car salesman and automobile mechanics are some of the least trusted professions year by year.  It is also the reason why services such as Carfax have become household names, despite the limited information they actually provide. Through the years of my experience I have realized how stressful and confusing all things relating to car wrecks, insurance claims reporting, and diminished value can be to an outsider.  Which brings me to why I am writing to you now, as a seasoned insider.  As future posts develop, I hope to provide you with all of the information necessary to comprehend and command your own unfortunate accidents.  I hope to provide my readers with industry insider information, all of which has been gathered through my experiences with thousands of high end vehicles, every imaginable insurance company, involving any and all customer circumstance. Information will include how to best proceed through claims processes, common misnomers of insurance procedures, way in which you can best protect the value of your investment, and insurance company particulars based upon customer response and developments within the insurance industry as a whole.  My expertise has focused mainly upon Porsche, BMW, Audi, and Mercedes Benz, however, I hope that the information provided will be useful to all vehicle owners far and wide.