Servassist Blog

Auto Service Insurance: Extended Warranties

I once visited a golf pro during high school to address a hitch in my swing before my senior season. I was amazed to find during our first session that the pro spent very little time on the actual physics involved and spent much more time on the philosophy of "why" I was hitting the ball the way I was.

Whether he took one look at my swing and immediately decided that things were helplessly out of whack or that there is more power in the psyche than we are giving due credit, is to this day undetermined, though I like to selfishly believe in the latter.

Similar mind tricks, if you will, have obviously been considered with both the design and marketing of automobile service insurance aka the extended warranty. While many people would say that it is simply overkill with any decent vehicle these days, others argue that tis' better to be safe than sorry and the more "protection" and ultimately piece of mind they can get, the better, at any cost.

So what we have here is is not a clear cut investment in some product you are surely going to get dividends from at some point in the future (which already is a deal-breaker for most), but rather a philosophical dilemma questioning whether or not the proverbial dipstick is indicating that your oil is half-empty or half-full.

Whichever camp you are in, please find a very comprehensive and information article on the merits of both factory and after-market warranties of all sorts here.

An additional weight on fuel prices...

I read recently that there was a measurable change in the earth's atmosphere around North America in the days after the 9/11 attacks in 2001. Apparently the exhaust trailies following airplanes are prevalent enough to insulate the area some and actually affect temperatures by several degrees. The grounding of all aircraft for three days that month provided a unique testbed.

Quite a blow for those people who argue that as a collective species we have no influence whatsoever on the environment, natural resources, etc.(yes they do exist, though apparently don't live anywhere near hurricane or fire prone areas).

Additionally, (and back on the ground) we've talked here before about how the higher gas prices may have positive health implications (if it influenced driver behavior, which it unfortunately hasn't), but a recent study and subsequent finding by researchers at the University of Illinois have taken the fuel (human vs. automotive) scenario and flipped it upside down. The study shows that Americans use neary a billion more gallons of fuel annually compared to 1960 levels all because of their increased physical girth (weight).

The study goes on to offer empirical evidence that show that at $3/gallon, it costs about $7.7 million a day or $2.8 billion per year for us to cart around our collective gut.

Such an analysis brings up lots of questions and concerns, many of which we are already painfully aware of, some of which are simply taboo due to the nature of the issues at hand including, a proposed fat tax, oil dependence, child and adult obesity, spiraling healthcare costs attributed to overweight people, etc.

To read a press release about the findings, please click here.

To read some interesting takes on the situation including arguments in favor of the increased physical size/french fry consumption (from a VW TDI driver/used oil burner), please click here.

Technical Service Bulletins (TSB)

While the term "Recall" has an obvious meaning and negative connotation to go with it, the more sophisticated "Technical Service Bulletin" sneaks by generally unnoticed by the car-owning public with its unbiased definition and fancy acronym (TSB). The TSB is to the automotive repair world what Switzerland is to international diplomacy, a kind of "Grey Poupon" to a recall's Gulden mustard.

In actuality, the TSB is different from its more blue collar (recall) cousin, and while not always substantially so, enough to maintain its status as a simple "update" on all related automotive things from any given manufacturer. With all the black clouds surrounding the recall notice, even with all of Toyota's efforts to tout their benefits, it is no wonder the TSB people are trying to wash their white-gloved hands of any association with the dreaded recall campaigns.

A technical service bulletin may be issued for something as simple and mundane as the introduction of a new or improved tool to adjust the air flow meter on a recently introduced Hyundai and are therefore, thrown around quite liberally these days. As a matter of fact, most manufacturers would rather issue a dozen service bulletins or more before marring their reputation with a recall, which essentially equates to an admission of product failure or defect.

In addition to the severity of the issue and its affect on the vehicle's performance of safety, the other main difference between the recall and TSB is the issuing party. Where the TSB is filed on behalf of the manufacturer, the recall is may be "voluntary" if filed by the manufacturer (typically in hopes of softening the blow) or by the National Highway Traffic Safety Administration or Transport Canada. TSBs are generally repaired (if applicable) free of charge to vehicles still under the manufacturer's warranty, where a recall is to be addressed by the manufacturer free of charge for the life of the vehicle.

To read an article comparing the two, please click here.
To see a free resource for TSB listings by manufacturer, please click here.

OPEC decision sparks conspiracy theory

OPEC's recent decision to cut oil production by 1.2 million barrels/day to begin November 1st has been met with a host of different opinions most of which are negative, ranging from accusatory at best, exploitive at worst. With all the news of recent high oil prices, foreign dependence on oil, and our current war status, the opinions seems to be as much about feeling like North America is being taken advantage of and less about where the oil prices actually settle (which is around $61 barrel at the moment).

That many people disagree about why prices of a commodity (same product whenever and wherever you buy it) move at all really isn't news when you consider the political, socio-economic and financial complexities of the worldwide oil market. What is interesting however is that the market forces are being scrutinized now that these issues are on the front burner. That the Organization of the Petroleum Exporting Countries is a cartel involved in little more than price-fixing (for lack of a better or more succinct term) has long been established and accepted.

As influential as they are on the global market (they possess the largest single and organized share of crude production), there are many factors that have led to the $61 price. Some of reasons oil prices are where they are at the moment for example: (in no particular order)
Bush administration Middle-East agenda (whatever it is)
Futures market
Goldman Sachs re-distribution of their commodity index
Current inventory volume levels
Annual oil demand cycle
Absence of disaster affecting worldwide production/distribution
Promotion and research of alternative fuels
Lobbying pressure by oil companies, auto manufacturers, environmental groups, other interests
Weather
American legislation and EPA changes
Not to mention Gov. Schwarzenegger's (California) mood

Whatever the reason, any move by OPEC is bound to be analyzed extensively and they aren't about to hide the fact that they see a "target" price as one which is acceptable to their largest markets (i.e. low enough to not send everyone scrambling to the closest farm for E85) but high enough to generate their level of desired profits. While there are undoubtedly some inputs into oil pricing that aren't exactly on the "up and up," the introduction of a new Hybrid from Toyota doesn't exactly send the OPEC countries back to the drawing board to diversify with makeup or clothing.

Hope that doesn't squash anyone's theory.

To read an interesting article on the current cutback, please click here.
To read an article concerning price manipulation, click here.

A Jungle of Car Parts

Amazon.com just announced that they have officially entered the automotive business by launching its dedicated auto parts and accessories store at: amazon.com/auto. The new site features products from major equipment manufacturers and aftermarket suppliers like Hurst, Holley, K&N Engineering, Fram, Lund and Meguiar's. Additionally, the site retails hundreds of thousands of items from more than 250 automotive aftermarket retailers bringing their total to more than 11 million new, used, and refurbished automotive parts.

Then new Amazon site will be a great resource for Do-it-yourselfers and people in need of different accessories as well as independent shops and service facilities looking for a bargain. The site also contains a nifty part finding tool that scans the site for appropriate parts/accessories by vehicle make and model.

A note to the casual owner/driver: Most dealerships and service centers will not only you to bring your own parts for assembly/installation or other modification at their facility. Be sure to check with your service provider before purchasing those parts if you don't intend to install them yourself. To read the press release about the Amazon Auto launch, please click here.

Trouble in Auto Repair Paradise

Only when you are on the unfortunate end of an accident or collision do you really learn about how auto insurance works and what type of policy or even company you have chosen. Well, there are definite differences among them, so experts in the field would urge to do a bit more homework rather than just shopping on price. When it rains, it pours and you don't want to add insult to injury, especially around an already stressful time.

Some might argue that coverage is all the same and basically a commodity. Just select the state minimums and be on your way. Well, if you don't plan on having any wrecks (or children of driving age for that matter) that is all fine and well, but remember that collisions and mishaps are never in the plans and can occur even when the driver is doing everything right.

Actual coverages certainly may be the same between companies, but there may be other significant differences in the way they go about their business making a very different experience for drivers. For example, some insurers have adjusters readily available and pay for claims quickly, offer low cost extras like car rental allowances, low or no glass deductibles, etc. Other companies might only offer the absolute bare minimum and make your life a living hell when trying to receive reimbursement.

Like any industry with 3rd party vendors, insurance is a business and different companies will also shop around to set policies/prices in the interest of their model. American Family Insurance for example, recently selected Audetex as their exclusive direct repair claims management and technology partner. While drivers typically have no idea who or what this Audatex company is/does, such a behind the scene deal can affect you when you take the car in to get repaired. 

This announcement is news-worthy within the auto repair industry because this insurance company (which is under new ownership) is shopping around and trying to save some money on claims by foregoing the more traditional Mitchell price estimating software and using the new system. Almost sounds like a driver shopping around for insurance.

Again, this is far more information than the typical driver needs/wants, but it goes to show you that there are all kinds of things at work in an already complicated industry. There are committees, associations and organizations for everything and the auto repair business (not to mention insurance) is no exception.

Keep an eye out for a new Service Article on Servassist for a comprehensive brake-down on how auto insurance works and learn how you can avoid these behind the scenes issues. To learn why the American Family Insurance - Audatex deal is making waves with the ASA (Automotive Service Association), SCRS (Society of Collision Repair Specialists), and the AASP (Alliance of Automotive Service Providers), please click here.

Right to Repair Act: NJ

One of the most interesting (and likely important) pieces of legislation getting kicked around the hill these days with regard to the automotive service industry has to be the "Right to Repair Act."

This bill has found backing by as many as 100 Congressmen signing on as sponsors, though has yet to reach vote. The state of New Jersey however, (apparently a hot bed for auto repair facilities with more than 7,000 independent shops) or more specifically the Assembly's Consumer Affairs Committee, unanimously passed the state's version of the bill. The news was reported by the Coalition for Auto Repair Equality, or CARE, which represents the likes of Aftermarket powerhouses like NAPA, Midas, CarQuest, Advance Auto, AutoZone, and Jiffy Lube.

Other supporters of the act like the Alliance of Automotive Service Providers, Service Station Dealers of America, the Tire Industry Association, AAA, Consumer Electronics Association, etc argue that the complexity of today's automotive systems and components are putting further pressure on independent repair facilities and blocking many small businesses out of the auto repair market. They also say that not passing the bill would lead to both the closure of many local garages and ultimately affect the consumer negatively by taking away their choice and convenience. Currently, over 50% of service customers choose independent service providers after their factory warranty has expired.

Detractors suggest that the bill is tantamount to meddling with basic market forces and that the service industry has always found its own balance of technical information sharing etc. However, with the modern vehicle looking more like a computer than ever before, it is tough to argue that without some additional diagnostic information and specialized equipment, the independent service industry may go the way of the Beta max.

Whether or not this display of mechanic affection with help push the national bill along is to be determined, but its nice to see that if nothing else, they have a home in New Jersey.

To read some basic information on the Right to Repair Act, click here.   
To read an interesting article on the pressures facing the independent auto repair shop, click here.

National Tire Check Day

Most people already realize that without good tires, it really doesn't matter how many horsepower your ride is packing or how loud is its stereo. Even the most potent of exotic sports cars is reduced to the automotive equivalent of the slipping dog on frozen pond without the aid of good rubber. And this fact is only re-enforced every time we find an errant pothole or watch an episode of COPS where the popular "Spike Strip" is employed bringing whatever chase to a very immediate and often dramatic conclusion.

Like a four magic mediators, our tires flawlessly negotiate the intermediate world between our tranquil 70 mph living rooms and the unpredictable harsh realities that lie, quite literally, around every turn. So it is therefore no doubt why this specialized piece of industrial engineering is the focus of so many safety and marketing campaigns.

One thing people may not so readily recognize is the small portion of any tire that is employed at any given time of the drive. While an average tire would measure several feet in length were it cut across and laid out flat, only a small patch is ever in actual contact with the road. That means that four small areas the size of a salad plate are executing every turn, stop or avoidance manuever.

And like a small science experiment at each corner, the tire (and wheel combination) display a wonderous display of physics every time we turn the key. Did you realize, for example, that for a car traveling at highway speed, the center hub of the wheel is traveling at some 55 mph, while the bottom point of the tire is technically at standstill and the top most point of the tire is traveling over 100 mph?! That is a lot of starting and stopping if you asked me and an impressive demand on the tires integrity.

As such, we should be very aware and careful of our blessed tires. Today has been deemed national tire day, when their contribution is not only recognized but their condition also scrutinized. A poll by the Rubber Manufacturers Association (yes, thankfully there is such a thing) suggests that while many people understand and value the importance of the tire, many do not and even more (some 85%) don't know how to properly check their tire pressure.

To read an article about the popular misunderstandings of basic tire care and some interesting findings, please click here.

Dude, where's my mechanic?

We recently devoted a service article called "Finding the right wrench" to the fine art of identifying and procuring the automotive maintenance or repair services of a respectable facility.

By "respectable" we don't mean that the shop has to pass the "Grandmother" test because finding a place worthy of her patronage unfortunately are much harder to find these days. We really mean places that you can rely on for good, honest service at fair prices.

While we went over several of the methods for reviewing a shop as well as the pros and cons of the NCD (new car dealership), I came across a recent article that reaffirms the importance of testing the facility, which I think deserves mention.

I agree with everthing written here with exception to maybe the part about naming your firstborn after the service facility as a gesture of appreciation. Midas, Monroe, Meineke, and Speedy just don't have a great ring to them.

Taking the Hill

There's no doubt that the North American automotive industry has succumb to the sweeping forces that accompany globalization, foreign outsourcing, emerging markets, etc...but this sector of our economy has a long, storied past dating back to Henry Ford's introduction of the production line.

At one time, the auto industry (directly or indirectly) was responsible for as many as 1 in 5 US jobs. And even though the current gubernatorial race has stirred up all the dirty on terrible situation across Michigan, the news isn't all bad. As a matter of fact, if nothing else, this current "emphasis" or pressure on the US auto industry has changed the a lot of companies, whether OEM, parts suppliers, raw material companies conduct business. Many have had to abandon antiquated practices or redesign their entire business plans altogether in what has become painful, but dare I say, progress.

As such, the very size of the industry (revenue and employment), its role as a metaphor for both US manufacturing and direct foreign investment and historical weight make it a hot-bed for political influence. At any given time there are several pieces of legislation making waves around Washington that are aimed squarely at current automotive issues.

To read an interesting take on the current evolution of the US auto industry, click here.
To see a current summary of the current bills and legislation affecting everything from the independent auto service facility's right to repair to insurance regulation, click here.