Built Ford Tough
#16
08-14-2014, 09:03 PM
#17
08-15-2014, 02:13 PM
Insurance companies don't care whether a vehicle "holds its value". They care what their payout is, and typically once the cost of repairs equals ~50% of the vehicles' current market value (2004 FX4 w/155K miles = $13K in my area) it becomes totaled. I worked for Farmer's in vehicle claims during my college years, so it just surprised me. Heck, in many instances when significant damage was done to the the bed, they just go out and find a new/LKQ bed as opposed to repairing the original bed due to the repair costs of dealing with getting the large panels to straighten out.
Last dealership I worked at was the highest volume distributor of Ford collision parts in the nation, not bragging, it's a fact. Had nearly 500 body shops on account covering four states and an on site inventory that floated between $3-$4M compared to most dealerships that struggle to maintain a $100k inventory.
I'm sure you saw it from the insurance side but I was seeing it from the perspective of the parts guy taking the orders and selling the parts. I was constantly amazed at the size of a lot of orders and the parts being replaced from cabs to boxes to complete frames and they don't put that kind of time and money into a vehicle unless it's resale value justifies it.
-Steve
#18
08-18-2014, 10:30 AM
Senior Member
The terms "holding its value" and "market value" are obviously related, but the insurance companies DO NOT CARE if a vehicle holds its value before or after a damage claim. They only care about what the car is currently worth in regards to its "market value". If the truck was worth $15K before the claim, it certainly won't be worth that much afterwards to most due to now having a substantial damage history. Their job is to rectify the owner for as cheaply as possible. If the cost of parts is over that 50% area, chances are the labor for the repairs will be a large chunk of it, too. In addition to the actual money spent, the amount of time and resources the insurance company has to spend in order to fix a heavily-damaged vehicle soon gets close to the market-value of the vehicle. In the effort to expedite the process, many will total out the vehicle in order to get the owner rectified without a month-long repair process.
There are some caveats to the normal practice, especially on rare or classic vehicles. For example, had a friend total out his Viper a week or two ago. Full race suspension, supercharger, etc and ended up going ***-first into a curb which folded the rear wheel under the vehicle and twisted the frame/rear end. Repairable? Certainly, but given the market for the car, a Viper with a twisted frame is about worthless and it would involve taking the entire body off of the frame to fix. Insurance company took one look and totaled it out. Not because the repair cost was too high (it would've gone through $30K for sure), but because fixing the car wouldn't have fully rectified the owner. It's a very interesting industry (insurances), but I don't work in that area any more.
There are some caveats to the normal practice, especially on rare or classic vehicles. For example, had a friend total out his Viper a week or two ago. Full race suspension, supercharger, etc and ended up going ***-first into a curb which folded the rear wheel under the vehicle and twisted the frame/rear end. Repairable? Certainly, but given the market for the car, a Viper with a twisted frame is about worthless and it would involve taking the entire body off of the frame to fix. Insurance company took one look and totaled it out. Not because the repair cost was too high (it would've gone through $30K for sure), but because fixing the car wouldn't have fully rectified the owner. It's a very interesting industry (insurances), but I don't work in that area any more.