For Toyota car owners who are caught up in the safety recall mix, it is good news that the Toyota Company will be responsible in taking the costs for each claim made.
Last January 21, the car manufacturing giant called for a global recall on eight of its vehicles. About 2.3 million cars were recalled to correct a chronic problem dealing with sticking accelerator pedals. Meanwhile, 4.2 million vehicles were recalled for ‘out-of-place’ floor mats.
So far, several drivers have taken their cars to their nearest Toyota dealers to have the problem rectified.
The Toyota brand name has been receiving much negative flak in recent weeks. Palo Alto, California-based Market Insight Corporation (MIC), in a recent report, said that the recall has resulted in a large drop in its customer brand consideration from 70.7% to 76.4%.
To make the situation more bleak, consumer loyalty ratings have also drastically decreased for Toyota. Loyalty ratings are based on the percentage of consumers who explicitly intend to patronize the car manufacturing giant’s brand.
MIC revealed that the sales suspension and car recalls have resulted in a 50% drop in loyalty ratings. Though the effect was not immediate, MIC indicates that the negative trend began last January 28.
For the car owners with auto insurance, rate hikes and additional fees may not be levied by insurance companies. Toyota drivers cannot lose their coverage since the recall is inclusive in the provision for accident coverage.
Moreover, auto issuers Allstate and State Farm released statements which reassured their clients that their insurance rates will not consequently increase due to the recall. However, owners will still be required to have their cars sent for repairs to ensure that no such additional charges will be levied on them.
For Toyota drivers who get into an accident which involves the failure of any of the recalled parts, the car manufacturing giant would be held financially liable for any damage done to the car as long as the problem had already been corrected. Failure to do so would mean that the car owner may be held at least partially responsible for the road mishap.
Due to Toyota’s past relatively good reputation in the insurance industry on issues dealing with safety, insurance rates are expected to stay within current levels. Toyota owners may even be able to benefit from lower rates since the resale value of their vehicle drops because of the global recall. In the past two weeks alone, the average value of recalled cars has fallen between 4 and 8 percent.