Negotiator: Initial total loss ACVs coming in low, might cost consumers, shops chance to repair

Another consumer advocate has reported encountering multiple instances of vehicles totaled because of erroneously low valuations.

Upon further scrutiny, the vehicles’ revised valuations suggested a number of them might have been repairable, according to ZB Claim Services President John Walczuk.

The assessment is similar to an analysis by Texas appraiser Robert McDorman, gm of Auto Claim Specialists. McDorman recently provided us with data from more than 700 total loss appraisal clause actions which showed vehicles were actually worth around $3,500 more than the insurer had initially estimated. That discrepancy was large enough to flip some ostensibly totaled vehicles back to being repairable.

“It does not matter what MFG, Model or year,” Walczuk wrote in a June 23 email. He said Kias and Hyundais “are showing up under 4-6K on $20,000 dollar ACV vehicles.”

“Forget about trucks, 25-30 under is a regular finding,” he continued.

Walczuk’s account indicates that body shops and consumers might want to double-check the cost the insurer used on their ostensibly “totaled” vehicles.

“Think about, how many insureds actually question exactly what the carrier states?” he wrote in a June 24 email. He argued that body shops should be more participating in behalf from the customer.

“It is not their job to assist, true, however they should be guiding to some extent,” Walczuk wrote.

However, he warned that carriers might be unreasonably wedded for their initial call to total a car.

“To begin with, carriers never reverse direction after they deem an automobile a total,” Walczuk wrote in a June 24 email. “I'd one out of eight years, and that was since the shop guaranteed they would not pass the % threshold on repair. It been a BMW M 550, but that was it.

“Yes the valuations I'm seeing would shift some vehicles back to repair status, however the above tells you what the carriers position is on that. It is a dollar game. Why do a repair that costs more than a total by having an offset in salvage?”

The used vehicle marketplace is hot at this time, and short supply makes totaled vehicles more profitable despite its condition, based on Walczuk.

“The carriers are experiencing the low valuations as their cost of repairs is lower and also the salvage is bringing super high price,” he wrote June 24.

Citing vAuto Available Inventory data, Cox Automotive on June 23 reported that although second hand vehicle supply “moderated through May … used-vehicle prices didn't follow suit and instead set new record highs for that start of June.”

Cox said the typical second hand vehicle price “soared” to $24,414, a new record — and up nearly $2,000 in the old record of $22,568 at the start of May.

“The pace of price increases sprinted through May, closing the month nearly 25% greater than exactly the same period in 2021 and 2021,” Cox wrote inside a news release. “Last summer, the typical listing price surpassed the $20,000 mark for the first time and has been rising since.”

Cox predicted the used market would stay hot this summer, which means repairers and consumers may want to pay special focus on the ACVs cited to declare vehicles totals.

“The times of supply for used vehicles isn't worsening but remains within an extremely tight supply situation,” said Charlie Chesbrough, Cox Automotive senior economist. “As an effect, costs are rising rapidly. Higher prices likely are slowing the sales pace, which is allowing existing inventory to keep going longer. Using the new-vehicle market still inventory-constrained and consumer interest in all vehicles elevated, high costs and short supply for the used marketplace is likely to linger through the summer.”

He shared the following vehicles recently handled by his firm as “representative results” from the issue:

From Nj, which has a 100 % damage-value threshold for a salvage title:

• 2021 Audi Q3. Offer: $15,600. Valuation: $19,100.
• 2021 GMC Sierra 2500: Offer $35,000. Settlement: $44,000.
• 2021 Nissan Sentra: Offer: $12,200. Valuation $18,900.

From Ny, which mandates a salvage title in a 75 percent damage-value threshold:

• A 2021 Hyundai Elantra in Ny. Offer: $10,600. Settlement: $15,000.
• A 2021 Toyota Highlander hybrid in Ny: Offer: $31,100. Valuation: $39,200.

From Pennsylvania, which defines a salvage vehicle at an 100 percent threshold.

• 1998 Dodge Ram 2500 SLT Diesel: Offer: $9,000. Valuation: $18,900.

From Wyoming, which mandates a salvage title in the 75 percent threshold:

• 2008 Silverado HD 2500-Duramax: Offer: $17,300. Valuation: $27,800.

“The present market and valuations are also impacting claims for diminished value,” Walczuk wrote June 24. “If you aren't inside a special type of vehicle, will refer to it as the exotics, market values have a tendency to mask your real DV loss.”

CCC's 2021 “Crash Course” found 20.Five percent of vehicles deemed total losses in 2021 – meaning shops missed out on the opportunity to repair one in every five automobiles. This is up from just 15 percent this year. The typical totaled vehicle in 2021 had an actual cash worth of $10,444, which the average repairable vehicle was worth $16.657. The typical repair bill was $3,421 in 2021.