Air bags — driver and front seat passenger air bags — have
been mandatory in cars since the mid-1990s. That means there are
now millions of older cars on the road with air bags. These air
bags are ticking time bombs, financially speaking (and otherwise;
more on that below) because of the ever-less-favorable
ratio between the value of the car itself and the cost to repair
the car if the air bags go off.
Here’s what I mean:
Let’s say you own a 2000 model Toyota Corolla. It’s still
running great and you hope to be able to drive it for at least
another five years — a reasonable expectation given the durability
of newer cars. At twelve years old, it still has a lot of useful
life left. And because it’s paid-off, you have very low fixed
costs, transportation-wise.
But, here’s the catch.
Your 2000 Corolla is only worth about $3,500 or so,
retail. But the cost to replace the air bags, if they go off in an
accident, will be in the neighborhood of $1,500-$2,000. Which
means, even before you take fixing the actual car into
account, the projected repair costs have already come dangerously
close to the “50 percent of retail value” threshold — at which
point, most insurance companies will refuse to fix the car.
Instead, it will be “totaled” and you will be given a check for the
retail value — usually, a lowball number. Rarely will you receive
a check adequate to buy an equivalent vehicle.
The number of cars (and car owners) facing this Hobson’s
Choice continues to grow each year, as the fleet ages and the “book
value” of older cars drops. It’s a pretty good bet that if your
vehicle is worth less than $6,000 it will be totaled by your
insurance company if the bags ever deploy. Under $5,000 and it’s a
certainty. (A 2002 NHTSA study found that “…nearly all vehicles
more than seven years old are scrapped if they are involved in a
crash in which their airbag deploys.”)
Current-year cars typically have at least four and in many
cases as many as six or even eight air bags. These multi-bag new
cars will reach the Event Horizon much earlier since the cost of
replacing three or four (or more) air bags will be even higher than
the $1,500-$2,000 figure for dealing with just the driver and front
seat passenger bags in older cars.
The tragedy is that many of these cars are otherwise
repairable. Air bags don’t go off in fender-benders, but it’s not
necessary to have a catastrophic wreck for them to deploy, either.
The threshold is about 20-25 MPH, which isn’t insignificant but
also not enough (in many cases) to cause major structural damage to
the car — the kind of damage that in the past would have resulted
(reasonably) in a decision to throw the car away. But today, it is
routine to find otherwise repairable cars — some that can still
even be driven — consigned to the junkyard because of the cost of
replacing the air bags. And legally, the bags must be
replaced. Even if you fix the folded fenders and the car is
otherwise fine to drive, the law requires all factory-fitted (and
government mandated) “safety” equipment to be intact and
functional. You won’t be able to pass state “safety” inspection and
get/renew your government-mandated vehicle registration until the
bags are replaced.
It is a tremendous waste — and we all pay for it, though
we may not realize we’re paying for it.
We pay, first of all, in the form of higher insurance
costs — because the insurance companies quite rationally transfer
the losses they incur onto the shoulders of policyholders. Simple
cause and effect: If the 2000 model Toyota mentioned above had no
air bags, and fixing it after an accident only involved replacing,
let’s say, the front clip (bumper, hood, fenders, etc.) at a cost
of $2,000 — vs. another $1,500 to $2,000 on top of that for the
air bags — then naturally, the owner’s premiums are going to
reflect this. Since the imposition of the air bag mandate, average
insurance costs have gone up dramatically. In most urban/suburban
areas, it is routine for even “good drivers” with no record of
at-fault accidents or “points” on their DMV record to be paying
$500 or more a year for a full-coverage policy. To put that in
perspective, consider the cost of the typical homeowner’s policy.
Most people pay about the same to cover their house — an asset
several times more valuable than a car, but which has a much lower
risk of “total loss” associated with it.
But where we really pay is in the form of loss of the
vehicle itself. Of throwing away otherwise fixable cars and being
placed in the position of having to buy a usually more expensive
replacement.
And with so many aging air bag-equipped vehicles still on
the road, it is a cost more and more people are going to be facing
in the years ahead.
There’s another cost, too — alluded to in the beginning
of this article. Air bags are just like any other system in the
car; eventually, the components degrade and develop problems. It’s
as inevitable as eventually needing new brake shoes or a power
window switch. Own an air bag-equipped car long enough and
eventually the air bags are going to have a problem. This is why
several automakers list air bag service after “x” number of years.
I like to read the owner’s manuals of the new vehicles I test drive
each week. That’s how I discovered the warning that (to cite one
example) “SRS system must be serviced” at 10 years. In one case, a
major car maker specifically recommends replacing the bags
(and related sensors, etc.) at 12 years — and you can imagine what
that would cost.
But maybe the bags will just go dark and not work.
Corrosion, a disconnected wire — either could result in a fault
that results in the bag(s) not going off when they should —
totaling you instead of the car. Or maybe the bags will
just off for no reason at all (leading to the same result, if it
happens while you’re driving down the highway at 70 MPH).
Hysterical? Exaggeration? Do transmissions in old cars just
fail sometimes? Is it unheard of for a tired, high-miles
engine to spit a rod through the oil pan? Other car systems degrade
and eventually fail in older cars. And so will air bags.
Only the results may be a bit more dramatic — and a lot
more expensive.
