Safety at What Price?

John and Jane are a newly married couple with their first child on the way. One sunny afternoon, they set out to purchase a minivan for their growing family. Upon arriving at the dealership, Charlie, an experienced car salesperson greeted them.

As Charlie welcomed the couple, he thought back to how many couples similar to John and Jane he had helped before. He thought back to the days of the dependable Oldsmobile Cutlass and how different the purchasing expectations of buyers today are from back then.

“How can I help you today?”asked Charlie.

“We’re looking to purchase a minivan,” Jane answered. “Something reliable but most importantly safe. We want airbags, cruise control, power locks and doors with remote key entry, a GPS…oh…and a DVD player to entertain the little one. Just the basics.”

Charlie thought to himself: Just the basics? That’s more than just the basics.

Are Jane’s requests really more than just the basics? The automotive world has evolved greatly with the introduction of new and improved technology for consumer safety and convenience. Consumers no longer consider the “basics” to be getting someone from Point A to Point B. Consumers in the new millennium are looking for the conveniences available in the market; now they are considering those conveniences to be a standard necessity. It is evident consumers’ expectations increase at the same rate technology does.

What do you consider when purchasing a new vehicle? Do you think about the same features as John and Jane? As you know, these features are all offered at price; some are now accounted for in the base price of a vehicle. But have you ever stopped to consider what it would cost to repair or replace these additional features? Not likely. No one plans to have an accident, but the cost of repairing these modern automotive conveniences is an issue faced by collision repairers on a daily basis. And rising costs to repair vehicles will in turn have an impact on insurers when it comes to underwriting and pricing an insurance product. So let’s look at some of today’s “basic” features and see how they might affect a collision repair centre or insurer’s costs.

SAFETY FEATURES

Airbags

Upon purchasing a new vehicle, consumers like John and Jane are looking for additional safety features. One of the most popular features is additional airbags. In the past, airbags were only offered for the driver and front passenger. Today, they are present throughout the vehicle. They include side airbags and airbags for the passengers seated in the rear of the vehicle. These features have been added to the vehicle to protect against high-impact collisions, but sometimes they deploy in a low-impact collision. A deployed airbag can add between $3,000 and $7,000 to the repair costs (including replacement and labour and parts related to the airbag deployment), which increases the potential the vehicle will be ‘written-off.’