Hey, Duane here! Last week I commented that past accidents impacted the value of my Typhoon. Unfortunately at the time, I was unaware that there was "loss in value after accident".
Loss in Value After Accident
I was unaware that being in an accident decreases the value of my vehicle.…even after it’s properly repaired.
Insurance companies certainly don’t mention it during the claim process. But eventually, when it’s time to sell and someone runs the vehicle history report, it usually becomes known that the vehicle was involved in an accident.
Regardless of how well repaired,
the simple fact of being in an accident makes the vehicle less desirable and thus valued less.
Once you think about it, it makes perfect sense. Given two identical vehicles, one accident-free and the other properly repaired after an accident, the accident-free vehicle is more desirable and thus worth more.
Conversely stated, the vehicle repaired after an accident is less desirable. Thus it would be discounted in price to make it marketable against the otherwise identical accident-free twin.
Now that you know an accident decreases a car’s value, it’s time to learn its name.
This loss of value after an accident is called Diminished Value, impacting virtually every repaired vehicle. Diminished Value is calculated as the difference between the market value before the accident and the market value after being repaired.
Vehicle history report services such as Carfax and AutoCheck have given rise to Diminished Value because most accident repairs are now referenced on vehicle history reports. And these days, dealers and many private buyers run a vehicle history report before making a final offer to purchase your vehicle.
Diminished Value Claim
The insurance company handling the accident repair claim will probably never mention the Diminished Value of your vehicle. So, most people are unaware of the loss in value situation as the accident claim is being processed.
It is possible, though not easy, to be reimbursed for the Diminished Value. Depending on factors such as vehicle model, age, mileage, condition, accident severity, and the state in which you reside, it may or may not be worth the effort to file a claim with the at-fault insurance company.
And to complicate the matter further, there is no verifiably accurate means to know the true loss in value related to the accident. So….
Want to Learn More?
Start by clicking this Diminished Value link to the Alluring Autos webpage where we share more basic information.
Alluring Autos does not sell insurance or offer legal advice. We offer this information simply to make you aware. There are a variety of resources on the internet providing information and guidance on Diminished Value.
Next Sunday, read about the sale of my beloved Hurst/Olds after 20 years. Thanks, and always drive with allure!
1969 Hurst/Olds (no accidents)