2 May 2005

Mechanic Mistakes and the Risks Involved

Everyone makes mistakes… to err is human. But when service technicians (when did they stop being mechanics?) working on collector cars make mistakes, it can quickly get expensive and risky. Over the years I’ve been aware of many instances where major mistakes were made by shops when working on customers’ cars – very expensive mistakes.

In humorous example, my Ferrari mechanic, (and Ferrari god) Bill Pollard of Sport Auto in Connecticut told me of a fellow mechanic who hired an assistant and asked him to perform a “leak down” test on a Ferrari Daytona. (The test involves rotating the engine to TDC for each cylinder.) The assistant decided it was too hard to rotate the engine by hand, so he put a screwdriver down the spark plug hole and then bumped the starter to turn the motor. The result? The mechanic was out $20,000 – the amount it cost to rebuild the customer’s motor after the screwdriver broke off in the cylinder bore.

In another instance, one Ferrari enthusiast found a great deal on a Ferrari 512 TR (the last of the “one word” Testarossa series). It had low mileage, was red/tan and purchased for well south of $100 grand.  Now, we know Ferrari’s rubber-toothed timing belts require service based on time, as well as mileage, so before taking delivery this new owner had an independent Ferrari shop perform a major service on the car. Upon completion he had it shipped to his home.

Unfortunately, soon after driving off on a maiden voyage with his new “redhead,” the motor began to sound like a handful of nuts and bolts thrown into a blender. Upon inspection, it became clear that both cams on one bank were not rotating, while the crank, pistons, and other cams were. (This can happen if the cam belts are over tightened or the pulleys aren’t secured or from other mistakes during a major service.) The horrible noise was the motor’s pistons self-machining its valves. The repair estimate from his local Ferrari dealer was more than $30,000.

As this was the first drive after a major service in which the cam drive belts and cam journal bearings were replaced, it was clear that a mistake on the mechanic’s part was to blame for the damage. Reluctant to ship his vehicle back out of state to the mechanic who damaged it, the owner had an authorized Ferrari dealer do the work, and he asked the independent mechanic, whose error destroyed the engine, to pay for it. When presented with a claim for the damages and resulting repairs by the owner’s legal counsel, the mechanic, not having any insurance to cover such a claim, declared bankruptcy rather than pay for the repairs. The owner is unlikely to ever recover the cost of the repairs – or his legal fees.

These examples beg the question of what happens when a mechanic can’t afford to pay for any damage done in the shop. There are risks to owners every time their cars go into the shop. These risks can be mitigated, however, and not just by not owning a car where a motor rebuild is a $30,000 event.

Before you retain a mechanic for service work, verify that he or she has an “errors and omissions” policy in place, which will indemnify you should your vehicle be damaged due to the mechanic’s negligence. If the mechanic has this type of an insurance policy, he won’t be driven into bankruptcy if an error is made, even a high-dollar error, and the vehicle owner will not be left having to pay the repair costs out of pocket. If the mechanic does not have such a policy in force (and it is surprising how many don’t), either seek another shop, or at least make sure that the shop in question is not likely to run from the debt that could be created if a truly catastrophic mistake were made. For example, it is unlikely that an authorized Ferrari dealer that has been in business for decades would close up shop to avoid paying for an engine rebuild, even on a 512 TR, but an independent shop might not be able to make good on a claim of that magnitude.

In order to protect themselves, the owners of high-end or high-dollar cars must evaluate the worst case damage that could be done to their classics as the result of a mechanic’s mistake (generally, a near total loss) and ensure that the shops they deal with either have insurance policies that cover their errors and omissions (ideally), or at least a sufficiently capitalized and stable to “self insure” themselves against such damages and pay on such claims.

Alex Leventhal is an attorney and car collector living in New York City. His early practice experience included the representation of new-car dealers and dealer groups engaged in complex transactions, as well as other merger and acquisition business. Alex currently owns a Ferrari Berlinetta Boxer 365 GT4 and a Dino 308 GT4, along with an Aston Martin V-8 Vantage and other European collector cars. He's also director of the Aston Martin Club of North America.

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