How are vehicle ownership trends impacted by 2018 car recalls?
Automakers issued numerous car recalls in 2018. Fiat Chrysler Automobiles (FCA) recalled almost 6 million vehicles over safety concerns. Toyota recalled over 1 million because of faulty airbags, and began 2019 with a recall over similar issues. Ford, Honda Acura, General Motors and other companies aren’t without their share of vehicle recalls in 2018. Whether you’re in the market for a new vehicle or you manage a fleet for your company, vehicle costs impact you. But what role do the car recalls of 2018 play in current vehicle cost trends?
Recalls and Your Company Provided Vehicle Program
Your company-provided vehicles are great for branding. They might also be considered a perk of the job. But when it comes to recalls? They’re sitting ducks. Recalled vehicles that remain unrepaired compromise mobile workers safety and leave the company exposed to liability. One accident can result in both the loss of life and a lawsuit.
Following the safest of protocols, pulling the recalled vehicles is paramount. Repairs to the occasional vehicle in the fleet are common enough. But when it’s across an entire fleet? That’s cutting into valuable time on the road. The extent of the damage to productivity is dependent on two things: the number of same year/make/model vehicles affected and whether a solution has been found. Even if the solution has been found, vehicle repair may also depend on part availability. It’s a fleet manager’s worst nightmare.
Recalls and Your Personal Vehicle
If you learn your vehicle has been recalled, follow the instructions you’ve been given. While the process varies, they generally ask you to bring your vehicle in to an authorized dealership. The repairs should not cost you anything. And it sure beats the risk of a safety hazard.
But say the negative experience has put you in the market for something more reliable. What do your options look like?
Vehicle Prices are Going Up
Whether you’re looking to replace your fleet or your personal vehicle, you’re going to be spending more. According to our 2019 Cost of Vehicle Ownership Trend Report, new car prices are expected to increase by 2% in 2019. If auto tariffs are enacted, new car prices would likely increase considerably. There has also been an increase in safety improvements, which raise the price point, but with good reason.
It’s also trending to be a better year to buy a used vehicle than it has been in the past five years, despite the 2018 car recalls. This can be chalked up to demand finally catching up to the supply of used vehicles that followed the Great Recession in 2015.
Depreciation Rates are Slightly Down
And if you’re in the market for a new car, you’re probably looking to get rid of your old one. Depreciation has decreased for the third year running. You might not get exactly the deal you’re looking for, but it should be a little nicer than last years.
However, if you are selling your car and it has an open recall, please have it repaired before you resell it. As of late 2018, there are over 70 million vehicles on the road with open recalls. And sure, selling it before repairs have been made might be saving you some trouble. But it will also create trouble for many more, especially if the next owner is unaware.
What to Look Out for in 2019
The actions we recommend in 2019 depend on your current vehicle situation.
If you’re buying for yourself, you’ll be spending more, but with the added benefit of improved safety measures and decreased depreciation.
If your business has a company-provided vehicle program, you might want to look at other options. The costs of recalls can be staggering when you consider the level of disruption a recall creates for your mobile workers. And that isn’t even taking into account the considerable costs of managing a fleet. Your best alternative is a solution that helps both your company and your mobile workforce.
Looking for more information on 2019’s costs of vehicle ownership trends? Find them in our report.