• Feb 11, 2010
State Farm is a massive insurance company. With over 42 million vehicles covered under its policies, the insurance giant commands roughly 18 percent of the U.S. market. In fact, State Farm's share of the overall market is so big that it can apparently see possible trends in vehicle issues by simply analyzing claim data, as evidenced by its admission that it informed the National Highway Traffic Safety Administration of Toyota unintended acceleration issues as early as late 2007.
Reuters is reporting that State Farm contacted the government agency several times to report red flags. State Farm spokesman Kip Diggs told Reuters "when you start to see significant claims activity that indicates that there may be widespread problems with a product, that's when you go to the NHTSA," adding that the trends need to show "significant activity, a noticeable trend, for that to happen." Other insurance companies, including Progressive and American Family Insurance Group didn't observe such a trend, but Progressive has reportedly told Reuters that it is going to look over its claims again to see if it sees any patterns. State Farm does have a far higher percentage of the overall market, though, giving it a bigger pool of data for finding such issues.

Separately, Toyota's reputation took another hit as Kelly Blue Book lowered the residual value of its vehicles twice within the span of a week. KBB reportedly cited a slack in demand for used Toyotas coupled with what it perceives as Toyota's weak confidence in its products. The two reductions in residual value equal about 3.5 percent, or about $700 off the value of a used Sequoia SUV. Residual vales of Toyota vehicles have long been among the best in the industry.



[Sources: Reuters, KansasCity]


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  • 55 Comments
      • 4 Years Ago
      I called this one earlier in the week, knew that this was going to be Toyota's biggest problem. Now their used cars may be worth less than Mitsubishi's. Trade-ins won't be worth a damn, and this will be a major part of the equation for car shoppers.
      • 4 Years Ago
      What about my 18 yr old who drives a yaris (not on list yet, but I drove it and they should be) will her lack of experience... well you get the point
      • 4 Years Ago
      Well if the price goes down there'll eventually be more people interested:
      http://money.cnn.com/2010/02/05/autos/prius_deals/index.htm?hpt=T2

      But KBB aside, I haven't noticed a drop in real world prices yet-I don't think dealers are really panicking just yet. If they can hold out until the hysteria passes the resales will likely recover unlike normal depreciation.
      • 4 Years Ago
      Yes Toyota resales will fall... inline with other automakers.

      I sold a 3.5 year old Lexus for 66% of its MSRP. Please tell me another manufacturer that can do that.
      jane
      • 4 Years Ago
      BUY AMERICAN...... Not just made here ...... but where the money stays and goes into the tax system of THE USA and the profits do not go elsewhere!!!!
        • 4 Years Ago
        @jane
        Well said by someone who clearly has no idea what constitutes profit, or how it can be extracted by a parent company.
        • 4 Years Ago
        @jane
        Well said by someone who has no idea what constitutes profit nor how it can be distributed between group companies.
        • 4 Years Ago
        @jane
        Whatsmore, do you realise that Toyota's US subsidiary companies - from manufacturing to distribution to finance - all pay tax to various American taxing jurisdictions?
      • 4 Years Ago
      KBB is slow to react. Toyota resale will go down a *LOT* more than that. Try higher double-digits a la acceleration-tainted Audi 5000 or bankruptcy-tainted Chrysler.
      margaret
      • 4 Years Ago
      It's too bad because Toyotas are great cars. They just got caught up in greedy mass production, like factory farming, and now the quality of the product and integrity of the company is suffering for it.
      I love my Toyota, but I may have to find a new favorite.
      • 4 Years Ago
      I have owned 5 Toyota's and have never had a single problem with any of them. Loved them all! Even though my car has been recalled, my opinion of Toyota remains unchanged. Just another ploy by the media to manipulate the public. I wouldn't be suprised if Obama is behind this. If Toyota colapsed, that would put GM (Government Motors) back on top. Hmmmm.........
      Kelly
      • 4 Years Ago
      It's funny because i was almost KILLED in a mercury that had THE EXACT SAME FLAW as the recalled toyotas. But of course, not only did mercury deny there was a problem, aka, my accelerator sticking, for as long as they could get away with it, the eventual recall was NEVER reported. Domestic vehicles suck. End of story. I wouldn't buy a ford or chrystler if you put a gun to my head. But the media will never scrutinize domestic companies when they can martyr import vehicle companies (Toyotas BTW are made in America so this affects AMERICAN jobs). Government motors is blowing the recall way out of proportion and fear mongering because the cash-for-clunkers cluster fk sent everyone (rightfully) to Toyota dealerships. You're being manipulated by propaganda.
      • 4 Years Ago
      I'm a toyota owner and I personaly dont worry about this gas pedal recal.
        • 4 Years Ago
        Funny you guys all of a sudden mention VW... every time I see anything related to the Toyota recall, the VW "Oh Snap" comes to mind for some reason.
        • 4 Years Ago
        "Media hype. You will be everyone's target when you're on the top. Next year should be Volkswagen."

        Precisely. There's no doubt that these issues are causing Toyota significant problems. But once you remove the blatant Toyota haters (most of whom can't even string a sentence together) from forums such as this one, you're in fact left with very little rational, unbiased commentary. The truth of the matter is that practically all major car companies have deservedly had mud slung in their direction over ther years, from GM, to Ford, to Fiat, to PSA, to VW, and currently it's Toyota's turn. Each has positive and negative perceptions with the general public, but whether that perception is warranted or not is irrelevant - people can buy anything they like with their hard-earned money and they don't have to justify their choices to anyone but themselves.
        • 4 Years Ago
        Do you worry about the falling resale value?
        • 4 Years Ago
        Difference is VW never had the perception of uber-reliability. No one expects a VW to be trouble free.
        • 4 Years Ago
        I am sure people in front of you worry enough LOL
        • 4 Years Ago
        Media hype. You will be everyone's target when you're on the top. Next year should be Volkswagen.
        • 4 Years Ago
        @Epyx - vw also never recalled the majority of it's top selling models for a half dozen different safety concerns at once. come to think of it, post audi 5000 debacle there haven't been any massive recall grabbing recalls for vw relating to safety systems, at least not in the last decade.

        So no, JDM fanbois, we won't see a vw recall of this magnitude. We also don't see vw very publically trying to slash costs 30% when they're already at the top of the efficient production path. Such is the magic of relying on a primary market outside the US and, gasp, actually running the largest collection of prestige luxury brands on the planet.

        I'll take a recall for a fuel line rattle or a pcv valve over incompetently designed gas pedals, incompetently engineered abs systems, negligent engineering which can't provide basic safety assurances like brake override. Yup, all those little non safety related quibbles which have caused no accidents and are linked to zero deaths, i certainly prefer those.
        • 4 Years Ago
        What kind of flowers would you prefer for you and your family's funeral??
      • 4 Years Ago
      I wonder how long until all insurance companies are required to report their claim data so the government can have more statistics to pour over and masticate.?

      It might have caused some action here (unless the lead analyst became bought off...).
      • 4 Years Ago
      100% agree.
      You can say that until your blue in the face.

      The sheep don`t want to hear it.
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