Wednesday, May 25, 2011

The Value of Stuff

My father has had a life long interest in cars and even though he retired after many years as a school principal he worked during an era when teachers, especially primary teachers, were not paid a great deal. Cars were also much more expensive before the days of Japanese imports and my father, being a practical man, admired reliability and functionality over style and high performance when choosing a new vehicle.

In my early childhood our family cars were British and a series of Humbers and Hilmans transported the Kennedy family from A to B. As the British car industry struggled to compete internationally and their reputation for quality and reliability faltered he bought a couple of Holdens (useful for towing boats and caravans) and then as Japanese cars came to the fore, some Mitsubishis.

On his retirement about twenty years ago he decided to buy what he thought may be his last car. This purchase was an important one for my father as he planned to cash up some of his valuable superannuation so he could afford to buy a good one. His research was impeccable as he trawled car magazines for reviews and interrogated mechanic friends. One car kept being mentioned, that met his criteria of reliability and functionality, the Toyota Corolla. It was duly purchased, was greatly admired by friends and family and for many years was lovingly cleaned, polished and carefully driven.

As it turned out this wasn't the last car my father would purchase and now in his eighties he is in excellent health and has bought three Toyotas since. However his first Toyota had sentimental value, it had proved to be every bit as reliable as promised and after twenty years of regular servicing and almost fanatical care it was in near pristine condition and, with only 190,000 on the clock, still had a long life ahead. No longer being able to justify holding on to it he passed it on to me, he hoped it would make a useful second car for our family and, as it was a manual, perhaps useful for teaching my son and daughter to drive.

A little over a week ago a driving lesson took a disastrous turn, literally, and the red Corolla ended up side-swiping a parked car, crushing the left front panel slightly and removing the indicator light. I went through the process of reassuring the horrified young driver and sorting out the insurance. As we had full insurance, and the car could still be driven, I thought the repairs would be a minor formality.

At this point the title of this post becomes relevant as I was in for a bit of a shock. When assessing the value of a car for insurance purposes the dominating factor is age, it doesn't matter about the mileage or the general condition of the vehicle, what we are dealing with is a twenty year old Toyota. Two separate valuations were averaged and in an undamaged state the car's value scraped in at $2,300 and since the quote for the repairs amounted to more than 3/4 of the value it was written off.

Here is a car that can still be driven and, apart from one panel and an indicator light, is in better order than many vehicles ten years newer and it is deemed a write off. After getting a cash payout I was able to buy back the "wreck" for $250. Obviously I am repairing the damage and the Corolla will soon be as good as new, but I did think the way we value stuff can sometimes be a little odd. This complicated and high functioning vehicle, with some slight (basically cosmetic) damage was reduced in value to that of a wheelbarrow.

 The actual Corolla photographed recently (it is worth clicking on the photo for a better view).

2 comments:

robertguyton said...

What the hell is that thing on behind?
Is that a trailer??

bsprout said...

And a highly functional one at that! Noddy has given it his seal of approval. :-)