Categorized | economy, happenings

Having trouble getting your car fixed?

In all the hoopla, hand-wringing, and teeth-gnashing crashing around and about the auto industry meltdown — as newly-minted experts in business, industry, and economics sound off over their omelettes in every diner from Puyallup to Poughkeepsie about the wisdom of bailouts, the real fallout is starting to hit Main Street in an unexpected and unremarked area: fixing your car.

Part of the reason for the meltdown, after all, is that people are spooked by the recession and choosing not to replace their old vehicles, but fix them instead and squeeze a few thousand more miles out of them. But one of the consequences of the auto industry meltdown is that parts are becoming scarcer — even for companies like Toyota. So fixing your automobile is starting to become harder.

And if the Obama administration had let Chrysler and GM go into liquidation, all the old GM and Chrysler cars currently on the road would become unfixable by August.

No matter what you feel about what GM and Chrysler “deserve,” could we individually and severally really afford to junk that many automobiles?

Nowhere is this more obvious than in the P&C insurance industry, where fixing up broken automobiles is what they do all day for a living. I interviewed today a couple adjusters who are both alarmed by the growing number of brands that are getting harder to get serviced. In some cases, the wait for parts can take two to three months . . . or longer. What surprises them is that they’re starting to experience problems like this with normally dependable automakers, such as Toyota. And, if you’re driving something like a Subaru or Mitsubishi, you might as well just forget it — you need to buy another car to hold you over until your old car gets fixed!

What this means is that the cost of the auto industry meltdown is hitting folks who already own a car. What happens if you’re in a collision and it takes three months for a part to come in? If you’re like most people, your insurance includes a rental car. But that coverage will dry up in about two weeks. At which point, you will have to shell out thirty bucks a day while the garage waits for a back-ordered part.

It also means that insurance companies are totalling out damaged cars as complete losses if they can’t find the parts. In the case of a collision or other damage, an insurance company will total a car if the cost of fixing the car is a certain percentage of its current value (usually 60%). But adjusters are finding themselves totalling a car even when it’s one or two thousand dollars short of the actual totalling threshold — simply because the wait for parts will be too long.

One adjuster told me of a Chevrolet Corvette that had its sunroof panel damaged. The company that makes that part has it on a national three-month back-order, meaning that the part may not come in for another four to six months. What’s the owner to do? Drive around with a hole in his roof until then?

In three interviews I conducted today with auto dealers and other garages, I found that they, too, are having increasing difficulty getting parts to fix cars. In an increasing number of cases, they are putting the “wrong” parts in to keep the car running until the “right” parts arrive, in the same way you use your spare tire in case of a flat as a temporary fix.

No matter what GM and Chrysler deserve for bad decision-making over the last two decades, the real cost of their failure — and that of the other auto companies — is just now starting to make its way down to our pocketbooks. And no matter what you think of the Obama administration’s handling of the matter, if GM and Chrysler had liquidated, all those parts manufacturers would have liquidated as well. Leaving hundreds of thousands of cars in our garages and highways unrepairable.

That, when you think of it, is the classic definition of “too big to fail.”

Be Sociable, Share!

4 Responses to “Having trouble getting your car fixed?”

  1. Jason says:

    Bull. Necessity is the mother of invention. After market parts are always available. And if GM and Chrysler would have folded, after market parts manufacturers would have sprung up to fill the need.

  2. Thanks for the correction! Absolutely aftermarket parts manufacturers would sniff the opportunity in the air. You make a very important comment that entrepreneurs will try to fill the gap. But those aftermarket entrepreneurs will build parts they expect to sell easily and not carry in inventory, which will lead to the same parts shortages that the insurance adjustors and body shop owners complained to me about. Right now, even with the car companies and their parts manufacturers still in business, insurance adjustors admitted to me that they’re totalling cars even when the total repair bill is thousands of dollars below the cutoff for totalling a car . . . because parts won’t be available for months.

    When I did work for a classic Mustang parts retailer, less than half the parts shipped from inventory. The less commonly-sold parts were ordered from the manufacturer and, more often than not, took a while to show up because the manufacturer wasn’t carrying them in inventory, either. The retailer didn’t want to hold too much inventory and neither did the parts manufacturer. A carburetor was easy. Some pin that attached to the bumper could take a couple months.

    One other issue to keep in mind is the whole supply chain picture, one that I discussed in a different blog about home electronics. Yes, there are aftermarket manufacturers, but the whole supply chain would become disrupted if GM or Chrysler went out of business. The car companies would disappear as well as their immediate suppliers; but so would many of the machine and material shops that supply the aftermarket industry. If the supply chain starts failing at lower levels because GM’s and Chrysler’s parts manufacturers go out of business, then reconstintuting some of those supply chains may be prohibitively expensive for the rest. Making parts scarce and more costly.

    But keep in mind that perfectly repairable cars are being junked now by insurance companies and their owners because (sometimes) parts are hard to get. I may have exaggerated in the post (one insurance adjustor said this is a problem about 2% of the time — but he also said that it never used to happen).

  3. I didn’t know dealerships and garages were using wrong parts to keep the cars running until the correct parts arrived.. I didn’t know these people would do something so shady. Thanks for the insight. I’ll be more wary when getting my car fixed.

  4. sandra742 says:

    Hi! I was surfing and found your blog post… nice! I love your blog. :) Cheers! Sandra. R.

Trackbacks/Pingbacks


Leave a Reply

Shoestring Book Reviews

Shoestring Venture Reviews
Richard Hooker on Jim Blasingame

Shoestring Fans and Followers


Categories

Archives

Business Book: How to Start a Business

Shoestring Book

Shoestring Venture in iTunes Store

Shoestring Venture - Steve Monas & Richard Hooker

Shoestring Kindle Version # 1 for e-Commerce, # 1 for Small Business, # 1 for Startup 99 cents

Business Book – Shoestring Venture: The Startup Bible

Shoestring Book Reviews

Shoestring Venture Reviews

Invesp landing page optimization
Powered By Invesp
Wikio - Top Blogs - Business