INSURANCE INDUSTRY TRENDS: Fewer vehicles are totaling

After three years of increases, the percentage of vehicles declared total losses dipped slightly last year to 13.9 percent (compared to 14.2 percent in 2009), according to CCC Information Services. Audatex predicts that slight downward trend could continue this year as well.
Part of that is likely based on increased use of alternative parts. Audatex reports that only 65.3 percent of parts dollars were spent on new OEM parts in the third quarter of 2010, compared to 70.7 percent for the same quarter in 2008. The recycled and non-OEM categories each accounted for more than 13 percent of parts dollars, up from 11 or 12 percent in the same period two years ago.
But another key factor in reducing total losses is the significant increase in used vehicle prices since early 2009, which allows for higher repair costs before reaching the total loss threshold.
Higher gas prices continue to push up values for used compact and midsize cars, and disruptions to new car production in Japan are also expected to help keep used car prices high this year.