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Sunday, December 23, 2007

The hidden costs of the minivan?

The Insurance Institute for Highway Safety has released a report on the impact of low-speed collisions on the front and back bumper systems of minivans. The upshot?

None of 6 minivans, all 2008 models, is designed to resist vehicle damage in many low-speed collisions. The front and rear bumper systems on these minivans allowed $5,000 or more damage in a series of 4 crash tests conducted at 3 and 6 mph. The Nissan Quest was the worst, sustaining damage that cost more than $8,000 to repair.
Eight thousand dollars to repair the damage from a 6mph collision? What would it take to repair the dent made by a tennis racket?

These costs sound awfully high and might result from dealers having sufficient market power in damage repair. How might that happen? Perhaps through warranty conditions or specialized technology needed to repair the damage created by the low-speed collision.

Economics would predict that customers would take into consideration the costs of repairs such as that described by the IIHS, but I wonder how many people are truly aware of these costs. We purchased a Honda CR-V last year but never inquired about the costs of repairs such as this. If the costs are known to customers, the price of the vehicle should be lower than they would be otherwise, everything else equal.

Moreover, it sounds like it would be really easy to "total" a Nissan Quest.

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