The Unintended Consequences of Adding High-Tech Safety Gadgets to Cars

Modern cars are filled with gadgets meant to make us safer, connect us to the outside world, or just differentiate one brand from its competition. Features like Honda’s lane-departure and lane-keep assist systems, which were rated the worst by Consumer Reports, can cause their share of driver annoyances, with one Honda owner explaining, “The LKA will work for a few minutes, and then it is as if it forgets what it is supposed to be doing.” These new features have contributed to the rapid rise in vehicle prices that have limited new car sales and pushed vehicle loans out to 84 and even 96 months; the resulting negative equity will keep these owners out of the new car market longer than in the past.

At the same time, we doubt that many of these high-tech features can hold their value in the used car market. Historically, they have not, because technology evolves faster than cars stay on the road. So, the feature that once resonated with the new car buyer is ignored or just seen as obsolete by the used car buyer (and this assumes that consumers can identify and understand these features on the used cars they consider). If the used car market does not value these features, faster depreciation will raise the cost of ownership for the new car buyer.

Due to new safety gadgets, not only is the price of the car rising, so is auto insurance. Safety features have been credited with saving lives and reducing the number of collisions. But when accidents occur, the cost of repair has skyrocketed, raising premiums for owners. Higher repair costs over the past decade reflect the fact that collisions are no longer a simple fix of banging out metal and matching paint. Accidents deploy more airbags than before and often damage the front and rear areas that house electronics that enable the safety features. Replacing an exterior side mirror, once cheap and simple, can now represent a tenfold or greater increase in the cost of the mirror itself, plus a longer and more costly installation that requires recalibrating the security, interlocking, and blind spot monitoring systems. Other features that have similarly skyrocketed in cost include headlights and even windshields. Headlights that use LED technology have complex shapes and can often pivot as the car turns. A windshield is no longer just a piece of glass; it integrates with multiple safety systems through sensors and cameras.  What was once a simple repair can now take hours for replacement and system recalibration.

Of course, every automaker has its own systems and adds investments and training costs for the collision shop.  Not following the automaker’s standards when making repairs can mean that the safety systems in the car might not perform as planned. Incidentally, the growing share of electrified vehicles will only increase the complexity of repairs, with a high probability that the repair cost will exceed the actual cash value of the vehicle itself, resulting in more cars being totaled by insurers.

The second most frequently purchased product after vehicle financing is the extended warranty. Warranty providers have been grappling with the coverage they can provide given the complexity and cost of electronic systems. Their business model is based on data analyzing the durability of mechanical components, and not electronics. With few exceptions, it is not possible for the warranty industry to provide affordable coverage for the highly integrated electronic systems in modern cars.

While some technology improves vehicle safety, these benefits come at a premium. Ironically, the cheapest and most effective safety device that could be installed in cars would deactivate our phones — and eliminate the 3,000 to 6,000 deaths and 1.5 million annual accidents associated with talking on the phone or texting while driving.  The auto industry, instead, has found more expensive ways of keeping us and distracted drivers safer.

Maryann Keller is principal of Maryann Keller & Associates, an automotive research and consulting firm.