24/7 Wall St. looked at a very large number of Nascar crashes to assess which were the most expensive. The crashes reviewed occurred between 2002 and the present.
A Fox Sports analysis estimates that the cost of a single Nascar car is $125,000 for auto, engine, and labor. All of the teams carry multiple vehicles. Engine development programs run as high $3.5 million a season, although we have not prorated that into the costs of any of the crashes.
The most important hidden cost is the exposure a sponsor loses when a car is out of a race. Companies like Lowe’s (NYSE:LOW), Kellogg’s (NYSE:K), Coca-Cola (NYSE:KO), Procter & Gamble’s (NYSE:PG) Gillette division, Kraft’s (NYSE:KFT) Nabisco unit, UPS (NYSE:UPS), and Visa (NYSE:V) are unlikely to be hurt badly if a car is out of the race because they are sponsors of the all the Nascar races. Fedex (NYSE:FDX), Caterpillar (NYSE:CAT), Best Buy (NYSE:BBY), and Aflac (NYSE:AFL) are sponsors of cars and that can cost them as much as $12 million a year. If one of their cars is off the track for a large number of laps, they lose important commercial exposure.
The high cost of Nascar crashes is one of many headaches in operating a team in the sport which may make it more difficult for GM and Chrysler which have gone through Chapter 11 bankruptcy to stay in the race business at the levels that they have in the past. A weak dollar and poor global margins may even hurt Toyota’s (NYSE:TM) participation.
Each estimate below covers that cost of the car wreck and in many cases the cost of several cars being destroyed. The cost of damage to the track and facilities has also been estimated.
Watkins Glenn, 2009, Jeff Gordon & Sam Hornish, Jr. A six car pile-up with five cars totaled and one badly damaged. Damage to the track as well. Total damage: $688,000