Fourth-quarter 2008 appraisal values for collision and comprehensive losses were largely unchanged compared to the same period in 2007, according to a recent report from an auto damage estimating and management firm.
San Diego-based Mitchell International Inc.'s latest Industry Trends Report noted that the 2008 fourth-quarter initial average gross collision appraisal value is $2,898, which is $55 more than the fourth quarter of 2007. For comprehensive losses, the 2008 fourth-quarter initial gross appraisal value was $2423, an increase of $56 over last year.
Mitchell's figures are compiled through appraisal data uploaded to Mitchell's Advanced Information Management System from participating insurance carriers, body shops and independent appraisers.
Greg Horn, Mitchell's vice president of industry relations and editor in chief of the Industry Trends Report, said the appraisal numbers are "surprisingly flat" and "remarkably consistent" given inflationary pressures, such as the increase in price of paint and materials.
Vehicles tended to have a lower actual cash value (ACV) this past quarter than in the past, and the vehicles were also, on average, older.
Mr. Horn said the lower ACV reflects an overall depression in the prices of used vehicles. He said many vehicles are trucks and SUVs, which have depreciated in value more quickly.
Speaking to the older age of the vehicles on the road today, Mr. Horn said that the auto industry sold three million fewer vehicles this year than last year.
The older age of vehicles may have contributed to the relatively flat collision and comprehensive appraisals, Mr. Horn said. He noted that on older cars with a lower ACV, there is more of an opportunity to use alternate parts, especially used parts, which can offset price increases.
"For example," Mr. Horn said, "if your paint went up by $50, yet you found more used parts to put on, that can be a neutralizing effect to the price increase of paint."
The 2008 fourth-quarter increase in collision and comprehensive loss appraisals was higher when compared to the second quarter of 2008, but Mr. Horn said losses tend to be higher in fourth quarters, which is why comparisons to the fourth quarter of 2007 are more accurate for tracking trends. He said seasonal factors, such as winter driving, generally result in more losses.
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