I’ve seen a few posts that have discussed buying Toyota cars and their stock (here, here and here). Are Toyota’s safe? Should you go get extra life insurance to protect your family from your untimely drive? I thought I would add my own angle to this story not mentioned anywhere else.
As I mentioned previously, we are in the market for a new car this year. We are expecting our third child in June. The existing 2000 Toyota Camry Solara won’t cut it because it’s a two-door coupe! Imagine the problems we already have getting our existing two children into this car. A third child will turn it into a clown-car! So we desperately need to buy a new car this year.
I suspect Toyota, with all of its recalls and bad press, will offer some great promotions to entice people back to their brand. If that happens should I purchase a Toyota? Are their cars safe? Let’s assume worst case, Toyota’s fix doesn’t resolve the problem. What are the chances of sudden acceleration? Let’s talk about odds and put this issue into perspective.
According to this CBS News report, since 2000 there have been 34 deaths directly tied to sudden acceleration. Since 2000 to 2009 Toyota has sold over 20 million cars. So if you have bought any Toyota model during that period you have a 1 in 58,823 chance of dying. To put simply, you have a very remote chance of dying while driving a Toyota! If you are a male, you have a much greater chance dying from a heart attack (1 in 1,078), than dying from sudden acceleration in a Toyota. According to the Book of Odds web site, you have a greater chance of these things happening:
- White man 20 – 54 will die by drowning in a year are 1 in 56,050 (US, 1999 – 2006).
- Person in Tennessee will die from exposure to an uncontrolled fire in a year are 1 in 57,340 (TN, US, 1999 – 2005).
- Black female will die from a fall in a year are 1 in 57,950 (US, 1999 – 2005)
I’m not minimizing the loss of life; I’m trying to put this into perspective. This obviously doesn’t comfort the families affected by their tragedy, but sudden acceleration won’t occur to most people driving a Toyota. These odds are almost at the level of dying because you got hit by that proverbial bus when crossing the street in red pants, on a Sunday at 3 PM. You get the idea.
Let’s increase the odds based upon the amount of cars recalled and assume the amount of deaths is under reported. From Consumer Commentary stats, let’s use only the 7.6 million cars recalled and make the 2,273 incidents into deaths. You still have a 1 in 3,344 chance of dying by owning a Toyota. According to the Book of Odds web site, you have a better chance of these things happening:
- Teenager 15 – 19 will die from an accident in a year are 1 in 3,196 (US, 2005)
- Black man 20 – 54 will die from a transportation accident in a year are 1 in 3,249 (US, 1999 – 2005).
- Female will die of breast cancer in a year are 1 in 3,367 (US, 1975 – 2006).
You can search for other uncommon events, but you get the idea. There are many other things in life that are much more deadly and that you should be concerned about. Yes, Toyota should take action and fix a known problem with their cars. It is also possible they knew about the issue for too long and didn’t do anything about it. The issue I have is the media sensationalism (as they always do) makes it a more pressing and more important problem than the odds show. Based upon the odds alone, I most certainly would buy a Toyota car, even BEFORE the fix was done. Life itself is always inherently risky, unless you don’t move.
I look at the opportunity like a value investor in stocks; be greedy while others are fearful. If Toyota offers some great promotions to restore their credibility, I’ll be the first in line buying a Toyota. Oh what a feeling, Toyota!
Readers, do you think the media sensationalizes issues like this?