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The Mercedes S-class sedan has shed the dubious distinction of having the greatest overall loss cost of any passenger car.  It topped the list in 2000 not because it was stolen more than any other car, but because the recovery rate was so low, and the car cost so much to replace.  Professional thieves whisked stolen vehicles out of the country to sell rather than taking them to a chop-shop for parts or simply joyriding.

According to data released every year by the Insurance Information Institute, the Mercedes S-class has dropped completely out of the top 5.  The list measures total loss cost per insured vehicle year, which takes into account both claim frequency and the average cost per claim.  Thus, a car need not be stolen most often in order to incur the highest loss costs.  The S-class, for example, was stolen only slightly more than average.  Because of the high cost per claim, however, it racked up a higher total cost per insured vehicle year.  Conversely, the front-runner from 2003 to 2005, the Cadillac Escalade, costs 50% more than the Ford F250 (although their costs per claim are even-steven) due to higher claim frequency.

In 2000, Mercedes Benz decided that the S-class had been enough of a money-drain, and too easy a target for thieves, like a rich Tiny Tim in a bad neighborhood. So, they installed new safety devices, including a tracking device in each vehicle, in the hope of preventing theft.  Soon enough, the S-Class was dropping spots on the loss cost list.

At the same time, however, sales of the S-class were decreasing, which might also explain the drop.  The important fact to remember is that the S-class was stolen almost exclusively by professional thieves, who steal many cars per year.  Such car-thieves, unlike perpetrators of random theft, choose particular models to steal, and steal only those models.  When sales drop, there are fewer vehicles available to steal, and it is easier for thieves to switch to a more popular model (the Cadillac Escalade, for example).

Meanwhile, overall claim costs per vehicle, which had been declining through the late nineties, have since increased and then leveled off.  This might also explain the S-class sedan’s slip in the rankings, as other models, being stolen more, “caught up,” as it were, to the pace of the S-class.

In an attempt to boost sales, Mercedes plans a major redesign of the S-class sedan, to be released in 2007.  Only time will tell the effects on the sales and, eventually, the effects on the insurance loss costs.