In today’s episode Chuck explains the practice of “Steering” in the auto repair industry and why you should always get GAP insurance on a new vehicle.
“Steering” In The Auto Repair Industry Video Transcript
Hello folks. I’m going to talk to you about what is called in the body shop industry as “steering”. Sometimes or at times, when you get into a car accident, whether you are hurt or not, you sustain property damage with your car. And you want to go to your buddy’s body shop because you know he does good work. He’s reasonable. He’s timely, you get the vehicle back. Nobody’s going to be trying to shine your wand. They’re going to find everything that’s wrong with it. They’re going to take the estimate, give it to your insurance carrier or the other person’s insurance carrier so they can pay on it.
Well, a lot of companies have “steered” people to various body shops and they will call them preferred or some other term. And they sort of push you along. They’re not telling you have to go there but they’re saying hey, it’s a good idea. Maybe you should go see these people. Well, you can’t do that. You get to pick who the body shop is. Now I’m not telling you to go to the most expensive body shop in town and get an estimate because they could say hey, we’ve got an estimate here that’s ten thousand. Your estimate is thirty thousand. We’ll meet you somewhere half or between or get another estimate or something along those lines. But keep in mind, you get to pick who’s going to fix your vehicle. And, I’ve had plenty of body shop owners find out that people have been steered away from their body shop through insurance adjustors for various companies; and you can’t do that in Arizona.
So, remember you always have the right to pick your body shop or… and the person that fixes your car just like you have the right to pick a medical provider assuming you have insurance and they take your insurance like Blue Cross Blue Shield or something. But getting back to the property damage. Again, you have that right to be able to pick who that is that fixes your car.
And last note, if the estimate is worth or valued greater than… let’s say the estimate is ten thousand dollars on a five-thousand-dollar car to fix it. That would mean it is totaled. Okay. When the estimate to repair exceeds the value of the vehicle, it’s totaled. Now, some people end up having vehicles that they’ve had for years and they have low mileage; let’s say a 1985 Buick La Sabre or something and they want to keep it and they want it fixed. Well, it’s probably not going to happen. You’ll get the value of that car and that’s the extent of it. Also, too if you have a lien on the car because you bought it through a bank, financial institution, and the lien is greater than the actual value of the car, no one has the obligation of paying that lien off (that greater sum of money) than the value of the car. The rule of thumb is you get the value of the vehicle from the other person or from your insurance carrier less your deductible and no more. Just because your upside down on the vehicle doesn’t give you the right to be made whole because of that difference between the value and the payoff of the vehicle. And you all know as well as I do, you buy a vehicle and the day you drive it off the showroom floor (brand new vehicle) it devalues… devaluates probably twenty percent. You’re not going to get that twenty percent back under anyway, shape or form through the person that’s at fault, whether you’re at fault or whether the other guy had fault.
So, keep that in mind and the rule of thumb, at least in my life, has always been getting gap… that G-A-P, gag addendum to your finance contract so that in the event what I just spoke of occurs, then that Gap Addendum and it’s also called Gap Insurance. A lot of people call it that and I used to until I actually read it’s a gap addendum to the finance contract that will pay the difference between the payoff on the vehicle and the actual value of the vehicle at the time that it was totaled. So, if there’s a difference of twenty-thousand dollars you don’t want to have to be paying twenty grand for the next five years on a vehicle you don’t even own any more. In fact, they will wipe out the remainder of the contract. That’s what it comes down to. So, always whenever you finance a vehicle, always get GAP! There’s no exception for that.
This posted video is in no way specific legal advice on steering or any other subject. It is intended to provide general information for the public. If you need specific legal advice about steering or some other matter, call Chuck at 480-545-0700.