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Sunday, June 18, 2017

Mazda Insurance

2016 Mazda 3 Sedan
My daughter and I went to Miami a couple of weeks ago. She was planning on attending school there, so we were getting her established with a place to live and a car to get around. We found a 2016 Mazda 3 sedan at a small shop on the southern edge of the city for $11,000. I thought this was a heck of deal, as a visit to a dealer had turned up one similar car for $20,000.

Although it looks like an obvious deal, there is a caveat. The car we bought had been in a front end collision, had been written off by the insurance company as a total loss, and then repaired by the small shop, so the title is 'branded', and there is even a sticker on the door frame that says 'rebuilt'. But the car looks good and it drove fine, so we bought it.

When my daughter's plans for school collapsed, we had to decide what to do with the car. We could have tried to sell it, but given that we were trying to get out of town, that didn't seem like a good idea. We could have shipped it back to Oregon at a cost of  $1,600. Since this debacle had already cost us a small fortune, I was loath to rub salt in my wounds. Eventually, we decided that my daughter and her husband would drive the car to Oregon. They took a week and they got to see the country, all 3,000 miles of it. Gas was $200, motels were $1000. If you add it all up (airfare, lost wages from time off of work), I am sure shipping the car would have been cheaper, but the experience of The Great American Road Trip has to count for something. Just glad that my pockets were deep enough to afford them this experience.

The car made the trip without any problems, so I expect it will probably serve us well for many years to come. Now something may come up that will cost a couple of thousand dollars to get fixed, but we did save nine grand on the purchase price, so even should a small disaster strike, we should be ahead of the game. I'm keeping my fingers crossed, just in case.

When we were buying this car we talked to the proprietor. Seems that rebuilding cars is what they do. They buy late model Mazdas (and only Mazdas) that have been in front end collisions and written off as totaled by the insurance company. They repair the damage and then resell the cars. The curious thing is that some of these cars may only have $1,000 worth of damage. Now maybe she was exaggerating, or maybe that was just how much the parts cost, but still you get the idea that there is something funny going on here.

I think I have figured out that is. I don't know, but I suspect, that classifying a car as Totaled frees the manufacturer from the obligations of their warranty. Now a large percentage of new-car buyers will take good care of their cars, drive them conservatively and see that the required maintenance is performed in a timely function. After all, buying a car requires a considerable financial investment. On the other hand, I suspect there is also a large percentage of people who don't do any of these things. They drive with wild abandon, never bother with maintenance and don't even think about the car until it won't start. Then they call the dealer and scream out their frustration.

If all car buyers belonged to the proper, conservative, first group, then the manufacturer would probably not need to set aside more than $100 for each car for warranty work. But the devil-may-care bunch in second group could cause the manufacturer to set aside several thousand dollars to deal with their warranty claims.

I can think of no other reason to explain why the insurance companies would declare a vehicle with so little damage to be totalled.

1 comment:

AndrewP said...

Rebuildables & Rebuilt's, I was warned about flooded cars that were totalled and 'rebuilt'. They look fine superficially but being soaked, especially in salt water, may impact wiring and instrumentation down the road.

After looking at the following links, looks like one could get a deal on a flooded title car ( just make sure you have good road side assistance for the first 6 months) :

https://www.google.com/search?q=flooded+rebuilt+cars&rlz=1C1KMZB_enUS734US734&oq=flooded+rebuilt+cars&aqs=chrome..69i57.6381j0j7&sourceid=chrome&ie=UTF-8