Roughly a year ago, Wells Fargo got itself into hot water over shady business practices relating to widespread auto insurance and mortgage lending abuse. After a lengthy investigation, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency eventually suggested Well Fargo pay $1 billion to “resolve” the governmental probes. President Donald Trump then said federal agencies needed to go after the bank hard to set an example. The agencies came back with a consent order saying it was time to pay up.

Despite the insurance issue affecting an estimated 800,000 customers over a four-year period, Wells Fargo seemed able to recover from the scandal and move past it. However, new allegations claim the bank’s leadership was aware customers were probably being overcharged several years before it finally cancelled the program.  (Read More…)

There’s a good reason why insurance premiums are rising like your author’s blood pressure while scanning his Twitter feed, and it’s not just because providers really, really like making money. (They do, of course.) Average repair bills in the U.S. rose by about a third in the past three years, mainly due to the proliferation of safety technology, and insurance premiums followed. Country-wide, premiums rose 7.9 percent in 2017.

Cameras, ultrasonic sensors, and radar sensors tend to be located in areas of the vehicle most prone to damage, even in even low-speed collisions, and sturdy, exposed 5 mph bumpers are unfortunately a thing of the past. Many would prefer to see all automakers design their cars with repairs in mind, thus lowering future costs and premiums.

As an example of the headache of repairing technology-festooned vehicles, behold the average front-corner collision repair cost of one rare Korean sedan. (Read More…)

Why didn’t I think of this? An Alberta man with a spotty driving record and a burning lust for the Chevrolet Cruze discovered you can save piles of cash if the government thinks you’re a woman. Or at least an individual who identifies as one.

Speaking anonymously to CBC, the man said his transition to a female (on paper) began after he approached insurance companies in search of coverage for his new — and quite sensible — compact sedan. Well, we assume it was the sedan.

What followed was a journey through genders, all to save 91 bucks a month. (Read More…)

Wells Fargo is getting slammed with all kinds of penalties over shady business practices. Currently prohibited from growing its business as investigators look into its practices, the bank has restructured itself after it was implicated in widespread auto insurance and mortgage lending abuse in the summer of 2017. It’s also still coping with an earlier scandal involving local branches opening fake accounts for customers.

Last week, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency suggested Well Fargo pay $1 billion to “resolve” the governmental probes into those issues. That changed today when the bureau filed a consent order announcing it was time for the bank to pay up.

The fine applies to the mortgage lending issues, as well as Wells Fargo’s past practice of charging thousands of auto loan customers for insurance they didn’t need and often didn’t even know about. The move caused some borrowers to default on their loans, resulting in their vehicles being repossessed. The consent order mandates that the bank remediate those customers.  (Read More…)

“Mr. Bond, they have a saying in Chicago: Once is happenstance. Twice is coincidence. Three times is enemy action.” Thus spake Auric Goldfinger — and I’m starting to think he had a point.

About this time last year, my 2014 Accord Coupe was smacked on the rump by a cheerful part-time weed dealer in a battered Mazda2. It could have been a lot more hassle than it was. The kid was willing to wait for the cops, his insurance company was slow to act but friendly enough once they got started, and the insurance-selected body shop actually did a half-decent job of installing and painting a new bumper.

I should note that part of the reason everything went so well was my determination to not get agitated about the incident and its repercussions. As long-time TTAC readers know, I’m very fond of my Accord, but it’s fundamentally a cheap little car built right here in Ohio by a bunch of teenagers.

Had it been my 911 or my old Audi S5 in that little fender-bender, I would have raised all sorts of hell and insisted on using my own body shop and having a third-party inspection and so on. Or at least that’s what I did every time one of my “nice” cars was damaged by someone else. Hell, when my 1990 VW Fox was dented on a downtown street some time in 1994 I contrived to have the repair done by the only Lamborghini and Ferrari certified shop in Ohio. It was too nice. The paint on the repair was deeper and glossier than the Brazilian factory spray.

If last year’s Accord injury was happenstance, then what happened to me yesterday was coincidence. Once again my car’s been damaged by an utter idiot — but as you’ll see, this time there’s nothing I can do but grin and bear it.

(Read More…)

California’s insurance regulators have launched an investigation into Wells Fargo following the bank’s confession that it forced hundreds of thousands of auto loan borrowers to pay for insurance policies they didn’t need and, in many cases, were unaware of.

There’s also a congressional investigation underway, where U.S. senators are asking the company basic questions like who was affected, how broadly, whether they get a refund, and why the hell this occurred in the first place.

Unlike JPMorgan Chase or Bank of America, Wells Fargo’s auto loan contracts allowed the lender to obtain collateral protection insurance on a customer’s behalf if they failed to buy liability coverage themselves — or if the bank assumed they hadn’t. It’s not common practice and, when it causes paying customers to default and have their vehicle repossessed, it’s not difficult to see why.  (Read More…)

Safety enhancements are, undoubtedly, a good thing. People are walking away from wrecks that would have been fatal a few decades earlier and crash avoidance systems can keep inattentive drivers out of trouble altogether. The downside is that these features have made vehicles more expensive to purchase and repair.

Bob Tschippert, the senior vice president of underwriter Risk Theory, says that advancements in technologies have made vehicle repairs so costly that insurance companies have begun declaring substantially more injured cars a total loss. “In the past, if you had a front-end collision, you had damage to the engine or the front end,” Tschippert explained. “But now, with the number of airbags that can run from $1,000 up to $4,000 and all the sensors up front, you’re seeing more totals.”  (Read More…)

If it wasn’t for the blissful autonomy and convenience that comes with car ownership, how many people would want to shoulder the ever-growing cost? Insurers lie in wait to squeeze you, law enforcement waits to punish you, environmental groups demonize your lifestyle, and governments at all levels salivate at the thought of making it more expensive to own a personal vehicle.

Meanwhile, you dance to the tune set by oil companies and geopolitics, weathering financial blows when pump prices rise. If only there was a place where those worries fell away — where the act of owning and driving a car wasn’t as stressful.

As it turns out, this place exists. And it’s just west of the Mississippi. (Read More…)

Rising insurance premiums are a plump grape in the cornucopia of adult annoyances, but they grow into a ripe apple when forces outside of your control cause them to skyrocket.

Now, imagine that there’s only one insurance provider, and you already pay taxes towards it. That’s the reality in several provinces north of the border, but one jurisdiction just crashed head-on into an unforeseen problem: new money, and the skyrocketing increase in six-figure vehicle ownership that came with it.

To save the owners of Malibus and Journeys from a major jump in premiums caused by ultra-pricey supercar repairs, one Canadian province has taken drastic steps. (Read More…)

To quote Nobel Prize winner Bob Dylan, “You don’t need a weatherman to know which way the wind blows.”

You certainly don’t need TTAC to tell you auto insurance premiums are on the rise. You already know rates are trending up, well in excess of inflation. Nonetheless, let’s unpack some of the factors that have the average American now spending more than $100 per month on auto insurance. (Read More…)

Luis writes:

Hi Sajeev,

I live in Texas where we’ve had terrible rain and hail storms. My daily driver is a 2004 Acura RSX Type-S with 111,000 miles on the clock. I purchased it second hand last year after driving my last car for ten years. A ’99 Civic coupe (178k miles, which I still own but leave parked). Anyway, the Acura incurred at least $7,000 in hail damage, mostly on the roof, hood and trunk, and minor damage on the sides. My question is: should I keep it? It runs great and has never been modded or in an accident. The insurance will pay off the balance of my loan (about $6,200) and make it even-Steven, or they will pay around $6,000 (which is the value minus the assumed auction price of $1,100) to the bank and I will have to pay the $1,100 balance and be able to keep it. Either way, it will make it a “total loss”. The adjuster said it will not be branded on the title as salvage but will be deemed a total loss that will show up on a Carfax. Making full coverage is not an option. (Read More…)

In his Master Plan, Part Deux, some of Tesla CEO Elon Musk’s visions make a lot of sense, like a compact SUV based on the Model 3 platform, and a pickup truck, which will presumably have more than enough torque to haul around a big load (and plenty of space for a big battery pack).

That’s not at all what I want to talk about. Instead, I want to talk about some of the more speculative parts of the Musk vision: the self-driving vision. (I first wrote about some of the dystopian aspects of self-driving cars for TTAC in 2010.)

Musk wants you, the owner of a Tesla, to click a button and have your self-driving car go off and Uber itself during the day while you’re at work, earning you money. It will come back to you at the end of the day, ready for you to use again. This vision is going to have a very harsh collision with reality. (Read More…)

Michael writes:

Hi Sajeev,

Back in December, I purchased a new 2016 Ford Mustang 2.3-liter Ecoboost. Awesome car, my first Ecoboost and my first “sports” car. Anyway, the vehicle only has 2,200 miles and I’m still very much breaking it in.

Much to my dismay, last week while driving home through a wooded stretch, I struck a deer in the middle of the road. The deer was already dead, laying across multiple lanes with no way for me to avoid.

(Read More…)

Ever wonder exactly how the various “quick-lube” places in your city made a profit?

The price of motor oil rises and falls — mostly rises — but the pricing stays at $19.95 or $24.95 or whatever your local market will bear. As fate would have it, most of my vehicles aren’t compatible with the quick-lube business model of having some sweaty dude waving your air filter in your face and telling you that it has the Zika virus while an actual rhesus monkey cross-threads your drain plug using an impact gun. My 993, as an example, has two oil filters, while my Boxster requires a 32-step process to get to the air filters. Nor would I trust my mighty Accord V6 to somebody whose path in life hasn’t qualified them to work above ground.

Not all of us have the luxury of doing our own oil changes at home, however. You might not have the space, the tools, the ability, or the time that’s required to do it correctly yourself. That last factor is perhaps the biggest. If you’re working two McJobs to make ends meet, the Valvoline Oil Change down the street might be your only practical choice. The good news: it’s cheap. The bad news: some of that cost savings comes from another way the shop makes money on you, without you even knowing.

(Read More…)

As we reported yesterday, a group of top automakers has agreed to offer automatic emergency braking (AEB) on almost all of their models by 2022.

The National Highway Transportation Safety Administration (NHTSA) confirmed the voluntary agreement today, meaning virtually all light-duty cars and trucks sold in North America will adopt the safety feature by Sept. 1, 2022.

The group is made up of Audi, BMW, FCA US LLC, Ford, General Motors, Honda, Hyundai, Jaguar Land Rover, Kia, Maserati, Mazda, Mercedes-Benz, Mitsubishi Motors, Nissan, Porsche, Subaru, Tesla Motors Inc., Toyota, Volkswagen and Volvo Car USA. (Read More…)