Wednesday, April 15, 2009

Minicar Owner vs. the IIHS

by Tom Bozzo

As the so-far happy owner of a 2009 Honda Fit, I read the results of the Insurance Institute for Highway Safety's minicar crash tests with some dismay — as in, oh joy, there goes my already not-super-cheap car insurance premium. That's despite the headline being purely Dog Bites Man, as in we all know small cars will end up on the short end of head-on crashes with much larger cars. If anything, the whole exercise begs the question of why IIHS didn't just face the Fit, Yaris, and ForTwo off against the Honda Pilot, Toyota Sequoia, and Mercedes GL-class, respectively. Surely minicar drivers are impressively fucked in front-offset collisions with 2-1/2-ton SUVs.

IIHS's prescription is that minicar intenders opt instead for high-MPG midsize cars. That's not totally objectionable (*), though in listing as alternatives the Camry and Ford Fusion hybrids plus the VW Jetta diesel IIHS effectively exhausts the current U.S. market in such vehicles. At least it makes them look more reasonable than if they had followed their logic to its conclusion that if we really wanted to be safe, we should all drive the largest possible vehicles. In fact, it's just as easy to interpret the IIHS results as favoring a shift to more light, small, slow cars with advanced safety features like my dear little Fit.

This is a story of externalities (of course), and in a world that's stupidly been populated with oversized cars and light trucks, the minicar driver sacrifices his or her lower extremeties in a severe crash so that drivers of legacy vehicles can be more lightly injured. Stick us in a high-MPG tanks instead, and there's a good chance that the aggregate damage from crashes will be increased — which on its face is socially undesirable if not obviously so from the insurance industry's perspective. Were small vehicles much more prevalent than they are now in the U.S., then the public could rely on the good performance of the better-engineered small cars on the usual crash tests (including IIHS's main efforts) in judging their safety.

AIG scandal aside, I've long assumed that my insurance company (if not insurance companies in general) does a terrible job of disentangling vehicle and driver effects. When I gave up my 1998 BMW M3 for a 2001 Honda Prelude with 45 fewer horsepower and barely 55% of the sticker price, my insurance premiums increased — not unlikely because Preludes were favored among fast-driving youth whereas the venerable E36 M3 was (a few trust-fund babies aside) actually favored among low-risk guys going early-middle-age-crazy (like me). So I was not dinged when I traded-in the 'Lude on an E46 330Ci, and I found that the subsequent Lexus was treated as if I were the little old lady from Pasadena; the Fit, on the other hand, is taken to be a greater risk despite its comparative dirt-cheapness. It may not help that the insurance company calls the car a 2-door notwithstanding that there's no such thing as a 2-door Fit.

So: insurance companies are stupid and their trade association doesn't know what's good for them. It perhaps goes without saying that some of the other statistics they deploy — high accident and fatality rates in minicars relative to the general automotive population — aren't worth a bucket of spit unless they've carefully controlled for driver effects (cheap cars are driven by the relatively young) and usage patterns (minicars are citycars and used in collision-rich environments). Screw them and I suppose I'll take my medicine in 5 months when the car insurance renewal comes in.


(*) IIHS correctly observes that the minicars' mileage, at least with U.S.-spec drivetrains, is good but not spectacular. The Fit's main virtue is in the efficiency with which it encloses space given its exterior dimensions and its lack of the small SUV's excess poundage and middle finger waved in the face of aerodynamics.


The logic runs like this: if I drive a mini and I am hit by a truck going 65 mph on a highway, I'll die a faster death than if I drive an SUV. Therefore I should drive an SUV? No! Therefore, we should make sure that big cars and bad drivers are off the highways.

What next -- stay off bicycles because in a head on, they'll fare worse than SUVs?
The comparison by IIHS also lacks data on probability of being in a collision (& the ability to avoid one). Much more likely in a smaller, nimble car than in a big honking SUV.

My rates went down by 1/3 when I traded in my new Subaru for a new minivan that cost 50% more, so I apparently was also pooled with young, fast drivers and now have taken my correct place among middle-aged parents
Herr Doctor, yes insurance companies are stupid. we all know the answers for, say aig's, letdown. as you know, risk can be minimized through scale, so it should be closer to universal.
Another Socialist insulated by academia from the realistic desires of the majority. I drive a big truck, to tow my big boat, because I make enough money to afford it. So, we should make more laws so you can be happier with your insurance bill? The emotional gratification of a hobby, and my freedom to to pursue that interest, fortunately still remains legal; for now.
Well, Anonymous, I'm not an academic, not a "socialist," and not calling for any new laws. And big trucks are (and have always been) a minority of new vehicle purchases.

Pull your big boat with your big truck in peace, but don't go around fooling yourself that you pay the full costs of doing so.
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