Total Loss Increasingly Likely If You Wreck Your Car -

Total Loss Increasingly Likely If You Wreck Your Car

May 24, 2024Jeremy ParkinsonFinance, No picture0

Image Source: PexelsWe are in the midst of a “total loss” epidemic says “Car Dealership Guy” on Twitter. Pictures explain why.Used Car and Truck Prices vs Maintenance and RepairsCPI data, chart by MishTotal Loss Epidemic

We are in the midst of a “total loss” epidemic.

More than *20%* of vehicles are now declared a write-off by insurers after examining claims.

That’s around *five* times higher than in 1980.

But why?

One big reason is that the cost of vehicle repairs has increased by almost 50%…

— Car Dealership Guy (@GuyDealership) May 24, 2024
Car Dealership Guy Comments

We are in the midst of a “total loss” epidemic. More than *20%* of vehicles are now declared a write-off by insurers after examining claims. That’s around *five* times higher than in 1980. But why?

One big reason is that the cost of vehicle repairs has increased by almost 50% since the pandemic started—far exceeding inflation.

Another major driver: Declining used car prices. It may seem counterintuitive, but the rate at which used car prices have fallen over the past couple of years encourages salvaging instead of repair… And all that contributes to an increase in vehicle write-offs.

No wonder Copart’s stock price has gained 1,100% over the past decade…

Historical ContextIf you get into a wreck and total your car, and all your insurance covers is the decreasing value of your car, what can you afford to buy?Discretionary Spending TumblesTarget CEO Brian Cornell said the results show “continued soft trends in discretionary categories.”Target chart courtesy of StockCharts.Com annotations by MishOn May 22, I commented Discretionary Spending Tumbles at Target, Shares Drop 10 Percent

We had an advance hint at Target weakness.

Are Consumers About to Throw in the Towel?Data from the Commerce Department, chart by Mish.On May 16, I commented Retail Sales Fall Flat, Are Consumers About to Throw in the Towel?On a year-over-year basis, real retail sales have been negative 12 out of the last 15 months.Real vs Nominal Advance Retail Sales Percent Change From Year AgoThe vaunted consumer is much less than portrayed.Fed Consumer SurveyLet’s check out some charts from the latest Fed survey on how well people are doing financially. This data and a new chart by me tie everything I have said about the rent and the election together.Data from Fed Economic Survey, Chart by MishPlease consider Fed Consumer Survey: Are You Worse Off Than a Year Ago?