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Pricing used vehicles involved in accidents/reconditioned
My 1999 4cyl Camry threw a connecting rod at 60,400 miles just before trade in. Toyota refused to replace the engine due the warranty had expired...although addmitting that there must have been something wrong as the car has a perfect service record. There was no evidence of sludging etc. ( see The Camry Message Board).
The engine is being replaced with a "RE-BUILT" engine by Geico under extended warranty.
Will the value of the car increase or decrease at trade-in/sale due to the installation of the rebuilt engine? i.e will the value of the car be affected? I need to know as I will be getting myself a Honda!
The engine is being replaced with a "RE-BUILT" engine by Geico under extended warranty.
Will the value of the car increase or decrease at trade-in/sale due to the installation of the rebuilt engine? i.e will the value of the car be affected? I need to know as I will be getting myself a Honda!
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I confirmed through comparison of the part number used in the engine replacement that, in fact, a “new” engine was not used in the replacement operation – a “remanufactured” engine was used and several points come to light on this issue:
- A remanufactured engine uses an engine block from unknown origin, application of vehicle and mileage on the “donor” vehicle.
- A remanufactured engine’s internal components are usually only replaced if they are “out of specs” with a certain requirements - obviously not the same wear and tolerance specifications as a new engine.
- A vehicle with a remanufactured engine, especially a newer vehicle such as this, bears the burden of “not being in original condition” and subsequently assumes a loss in value of at least 40% - considering there are no other contributing factors as is not the case on this vehicle.
- An educated consumer or used car manager, upon having the ability to compare this vehicle to one that is similar but is equipped with the original engine, would choose the original vehicle. Even if the mileage on the vehicle with the original engine was more than on the remanufactured unit, a buyer can be certain the original engine is built to tighter tolerances and constructed by the vehicle’s manufacturer – not an “aftermarket” engine-rebuilding factory.
*** Bear in mind that I work for plaintiff's attorneys in lemon law cases and I show the bad side of using a reman engine. I some situations, you may not see a decrease in value, depending on the appraiser and your method of disclosure of the vehicle's warranty/repair history.
I don't think it either adds or detracts from the value of the car. It may scare off a prospective buyer though.
"How many miles it may have had on it really doesn't matter"
That's just it, we don't know whether it had 30,000 miles or 300,000 miles. That's why I feel the way I do about remans. We're also not talking about some custom engine, like the one I want to put in my Mustang from Probe Industries - that's all miked out, balanced and blueprinted, top shelf components and a dyno run to prove its worth. You simply don't get any quality assurances (other than a brief warranty) with a reman.
As soon as I get back my car I'll let you all know which dealership I'm talking about!
in my opinion i tend to think that if it's an old car with high miles and all that a rebuilt engine will actually make it worth more than one with the original engine... however in your case a 96 camry would probably worth less than if it had the original engine especially with 60k miles.
recommend that you take a look at the Nissan Altima and the Honda Accord. They're both rated at the top, and they compete with the Camry more than successfully.
As isellhondas said, the most important aspect is the quality of the remanufactured engine being installed.
I contend that a remaned engine CAN (but isn't always) better than the factory assembled engine.
Why? Because with a factory engine, the just put the parts in and expect it to run. If the engine is remanufactured correctly, everything will be measured, such as bearing clearances, cylinder taper and other things.
I would not be afraid of a quality remanufactured engine, especially if it came from Toyota.
FWIW,
TB
Right now as it stands, you will end up being the "bad guy" with a bad piece of merchandise. I don't doubt you took great care of the vehicle, so let's put that all aside for a moment, this will still be *Viewed* as - you didn't take Any care of it, Yota's do don't blow at 60k or even at 100k, unless maintenance wasn't done and you just burned the daylights out of the vehicle. Unfortunately in a situation like this, the word Doubt will always raise it's ugly head.
I'm on your side, but most Retail buyers, dealers, wholesalers will look at this with a beaded eye. Anytime you have to tell a story to sell something, the value goes down. Me personally, If a dealer calls me on a vehicle that is "jam-up" - BUT- it's gotta this or it's gotta that, I start walking backwards and start losing all my interest and unless I can just flat "steal" it, to compensate for the story I'm gonna have to tell to the next guy.
I don't feel this is a dealer thing, I thinks it's a Toyota thing. I have had Toyota repair transmissions, engines, compressors, power windows, etc, etc. outside of warranty, as long as I could produce ALL the "real deal" historys by the book .. as a rule, they don't like customers with a bad taste in their mouth, they haven't come this far to start dropping the ball now.
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*Isell -- I don't think it either adds or detracts from the value of the car.
Come on, where did you come up with that.? You know as well as I, if that dude rolled into your lot for a trade, you would be dropping the value like a bad habit.
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But anyway, when everything is finally completed to "your satisfaction" the best thing you can do is .. have all your records, warranties, history, maintenance, ready to go, place a nice Ad and sell it on your own with a full disclosure to the new buyer .. IF, everything is properly done, a Yota buyer would love to get a 99 Camry with -0- miles on it.
Good luck,
Terry.
I argue this point differently tham most because as a lemon law investigator, I contend that at 5,000, 10,000 or 30,000 miles, the manufacturer DOES have the option of installing a new engine versus a reman.
Most dealers or used car managers, me included, would hit a car with a reman, not praise it.
Terry :-(
Terry, you do realize that I work against the manufacturers and not dealers, right? Don't want you thinking I'm a bad guy.
I love the dealer fraud stuff, but the attorneys tend to go after stuff that is blatant - Gary Barbera Auo Group and Reinhart Ford here in the Philly area are notorious, as well as the one group in North Jersey - Bob Casiulli, I think.
You are assuming they use very loose specs.
I'm sure there are some places that build them just like you say.
However, my contention is even with loose specs, a reman engine gets more measurement than a factory new engine. I doubt anything more than a sample of factory new engines are measured, since they assume the parts are in spec.
However, I also believe there are high quality reman'ed engines out there, that are as good or even better than a factory new engine.
However, don't confuse the quality of the reman'ed engine with the psychological issue folks have with something like this.
I do believe an engine replacement is a hard sell to most potential buyers.
I just believe it is an irrational fear. Any used car is full of used parts. And even new cars break early in their life cycle.
FWIW,
TB
As an example, a rebuilder gets an engine with 60,000 that died because the owner blew a hose and oveheated it badly. Same rebuilder gets another engine to rebuild that died of old age at 200,000 miles. Both engines get rebored, cam and crank grinds, all wear items replaced etc.
As far as I'm concerned, no difference in quality.
Now...if the rebuilder was a shop that cuts corners and only replaces what he has to and sells his engines for 30% less than the other guy, then I think the mileage would make a difference.
Terry...I guess we disagree. I suppose the existance of a "rebuilt" engine could raise some red flags but if the car was otherwise nice and showed no signs of abuse etc I think most appraisers would shrug and figure that something out of the ordinary must have happened such in this case we are discussing here.
The ones used by the manufacturers ARE NOT of this quality, as I see many engines fail even before leaving the dealership. I just looked at a GM case where the technician had to go through three engines before they could return the car to the customer.
GM, Toyota, Ford, etc, does not rebuild their own motors. Jasper does. Knowing this, and knowing the manufacturer's reman engines are farmed out to who know where (a sweatshop in Bangledesh) guarantees the understanding that manufacturer's reman engines are NOT of the quality that some high performance aftermarket engines are. Check out a Pep Boys engine, then compare it to a Jasper.
if you decide to hide the fact that the car has a rebuilt engine and the buyer actually buys your car and later on discovers that it has a reman engine you could be in serious trouble because he has the right to sue you and will most likely win which automatically means that you'll loose a lot of money.
i agree with isellhondas ,if someone wants to buy that car and the vehcile looks maitained and with all the service records he'll realize that it wasnt abused or anything like that so if he liked the car he will probably buy it but not quite at the same value as one with the original engine, however those few hundreds of dollars you "loose" will buy you peace of mind in the following years.
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*Fleetwoodsimca* great post -- with the Professional and amateur buyers alike will almost always view such remanufactured drive trains as VERY negative to the marketability of the vehicle, now and forever.*
This is exactly the point .. it can be the most wonderful replacement in the world. -But, it's the psychological aspect, it's the emotional aspect of the sale - gheeez, it's hard enough to sell a vehicle with a re-painted door, cuz' Aunt Myrtle scratched it when leaving bingo. No matter what you say, most buyers are already thinking it was in a 16 car pile up ..
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**Isell
I think most appraisers would shrug and figure that something out of the ordinary must have happened such in this case we are discussing here.
I'm not trying to flame anyone .. but please tell me who the heck is going to just "Shrug" off a re-built motor in any vehicle .. If I called 15/20 dealers right now, during this beautiful Sunday halftime show, I would guarantee that half would have -0- interest and do a Pass, or at least be $1,5/$2,000 back of book.
Also keep in mind, during a service inspection, if it was found out, they would have the previous owner on the phone in a heartbeat and would Demand those figures would change and the he couldn't do a thing about it .. except, come back and get the vehicle.
Come on Isell, you need to get out a little more ...
Terry.
Didn't I say that there would be a negative emotional response to the reman'ed engine. Or am I not part of this conversation, LOL.
But if the Toyota dealership is willing to go through the certification process and warrant the vehicle that could go a long way towards comforting a potential buyer.
But even these programs don't always make the cut. Recall the thread in here about the certified Honda that had a fender replacement. The buyer felt cheated that his or her certified vehicle was in an accident.
Probably the smart shopper way to deal with the Toyota is to get a quality reman'ed engine and drive it a couple more years. Of course, if you are adding some kids to the family and need a mini-van (IIRC, this was the scenario) then keeping the smaller car really isn't an option.
I think the "right" thing to do customer service wise would be for the dealer to look for an after market adjustment for the trade and keep the deal that was made.
But they have no legal obligation to do that. Bad luck for the customer.
TB
As it now stands per ZUESLEWIS in post #2... I have lost at least 40% of the value.
i.e. The car may not be able to pay off for itself on being sold!
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rroyce10 - Post #12: This is the family car and used mainly by my wife to go to work (60 miles per day). It has not been subject to abuse. When I drive it it is usually with my kids on board. i.e. This car has not been abused/trashed
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Anyway...THANKS A MILLION TO YOU ALL FOR THE INFORMATION, ASSISTANCE & SUPPORT THAT YOU HAVE ALL PROVIDED. It will sure help our decisions made after we pick up the car in the middle of this week. (Toyota only needed Thurs to Tues to replace the damaged engine with the rebuilt unit - provided last Wed. by Geico)
DalkeithC@yahoo.com
I've bought a number of new cars over the years, and traded in my old cars on a regular basis. I've had the used car appraiser start up, and/or test drive my trade, but never do a "numbers check".
I'm not advocating dishonesty, but the originality of an engine has never been questioned in any of my transactions.
A lot of cars out there running around with quality rebuilt engines that are running a lot better than similar cars with tired original engines in them.
When I go too look at a vehicle .. I pop the hood and I look for the Vin #'s first, to make sure the fenders are in check, the next thing I will scan, is actually what the Zman has just posted ..
Isell, I'm not trying to be a smart a** here, but I'm with buyers and sellers all the time and sometimes, I watch 2/4/6,000 vehicles roll by in a day, that's a lot of lookin' .l.o.l..
These are just the basic things that the average UC guy and a well informed retail buyer would be looking for. Here's just a basic, standard, regular run of the mill example -
I bought a 01 Range Rover 4.6 HSE with 11k on it, the rad hose blows off, before going to service and the first customer that looks at "swears" it been in an accident, because all the hoses, brackets, clips and claps I had replaced .. thank goodness I had the Carfax, DMV and all the service records sitting in my briefcase or he would have been History .. l.o.l.. now he's a happy, satisfied customer, with No Doubt.!
Speaking of "no doubt", I don't doubt for a minute this poor guy with the Camry is legit .. stuff happens. I'm sure if all goes well at the shop, he will sell it and make a good buck with a retail buyer that "knows and understands" the situation and won't blink twice, because he feels comfortable with it.
But let me ask you a question, how many Used Cars do you think you would sell this month, if all of them on your lot had a re-built motor in them .? -- Kinda puts a whole different light on it, don't it.!
Terry :-)
Some buyers would care and some would not.
Some would think a rebuilt engine in a otherwise nice used car as a "good thing".
Others would be scared off.
On a fairly new Land Rover, it would be a detriment. On a 1995 Taurus it would be a benefit.
Of course, on a Land Rover there are MANY more things to worry about. Talk about troublesome!!
I do see your point, I just don't happen to think ***overall*** that the existance of a rebuilt engine dramatically drops the value of a car.
Car_man
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With a car like the Camry, that is very plentiful in the market, there are literally hundreds and thousands of used cars to choose from with their original engines in good operating condition.
Maybe I'm in the dark here or (probably)living in the past. A good machine shop using top quality parts used to be able to turn out a first class product.
Perhaps this is no longer the case?
OK...then I'm done...
I guess if I found two identical '97 Camrys. Same price, both with 60,000 miles. One has the original engine, the other a rebuilt.
Knowing what I know about Toyotas, I would buy the one with the original engine.
On the other hand, if the car in question was a 1997 Taurus, I might favor the rebuilt engine assuming it ran well and passed inspection.
The typical reman is done by a company that has an assembly line process that works faster than McDonald's. The pride is not there, like "Pop's Hot Rod and Machine Shop" and it's all about numbers and money.
That is why I don't like remans. On the other hand, a private race shop will be building my Mustang's engine and I know their work - it's the top shelf stuff.
"Shorty and Pepper" two top notch engine rebuilders that I once knew I'm sure are long dead. These guys and many others took great pride in what the did and stood behind their work.
We knew better than to try to rush these guys!
I'm probably being unrealistic I guess.
Today everyone wants it fast and cheap!
Too bad...
I call that foolish and you get what you pay for, or maybe not.
I hear all daym, every day, though (in my line of work) about people who saw a car, liked the color, bought it without even glancing under the hood, then they scream bloody murder about how they were rooked when the car breaks.
As to value, the age and miles on the vehicle make a big difference. My son sold an eight year old car with 150,000 miles on it, and had replaced the engine a year before. The year and 20,000 miles on the replacement to prove it out, did not cost him anything in selling price. Replacing the engine in a two year old car with 12,000 miles would kill the value, based on concern for a lemon.
As time and miles go on, replacing an engine loses liability and gains equity.
My thoughts.
Harry
Terry.