The Rise of the Disposable Car
Salvage auction firms like Copart are benefiting from more vehicles being totaled, but auto owners risk a less pleasant outcome.
Repair or write off?
Photograph: Central Press/Hulton Archive/Getty Images
Modern cars are equipped with heaps of electronic devices, many of which are designed to reduce the frequency and severity of accidents. But there’s a catch: The high cost of repairing these systems may mean the vehicle is written-off, or totaled, following a crash.
More than one-fifth of vehicles are now declared a write-off by insurers after examining claims; this is close to a record and around five times higher than in 1980, industry participants say. The proportion of totaled cars may increase further as declining used car prices tip the scales in favor of salvage versus repair. Auction firms that re-sell wrecks on behalf of insurers stand to benefit from this trend, whereas car buyers who stretched to finance their vehicles, but scrimped on insurance cover, risk nasty financial shocks.