So, you’ve had a fender-bender. Your ride’s been patched up, looking slick again, but here’s the kicker: it’s probably worth less now. Let’s dive into the nitty-gritty of auto depreciation after repairs and how you can reclaim some of that lost value.
How Vehicle Depreciation is Calculated After an Accident
When your car has been in an accident, its value takes a hit—even after top-notch repairs. This drop is known as “diminished value.” Potential buyers or dealers might hesitate to pay full price for a car with an accident history, thanks to concerns about unseen damage or future issues.
To put a number on this depreciation, many insurers use the 17c formula. Here’s the lowdown:
- Find Your Car’s Pre-Accident Value: To get this figure, check out resources like Kelley Blue Book or NADA.
- Apply a 10% Cap: Insurers often cap the base loss at 10% of your car’s pre-accident value.
- Factor in Damage Severity: Multiply the 10% base by a damage multiplier (ranging from 0.00 for no structural damage to 1.00 for severe structural damage).
- Adjust for Mileage: Finally, multiply by a mileage factor (from 1.0 for under 20,000 miles to 0.0 for over 100,000 miles).
For example, if your car was worth $20,000 before the accident, the max loss is $2,000 (10%). If the damage is moderate (multiplier of 0.50) and you’ve clocked 30,000 miles (mileage factor of 0.8), the diminished value would be:
$2,000 × 0.50 × 0.8 = $800
Diminished Value Claims: Recouping Your Losses
If you’re not at fault, you might be able to file a diminished value claim against the other driver’s insurance to recover this loss. Here’s the playbook:
- Gather Evidence: Snap pics of the damage, keep repair invoices and get a professional appraisal of your car’s value post-repair.
- File the Claim: Submit your evidence to the at-fault party’s insurer.
- Negotiate: Be ready to haggle. Insurers might lowball you, so having solid documentation is clutch.
Heads up: Not all states accept diminished value claims, and the rules can vary. Some states only allow third-party claims, while others let you claim under your own policy. Check your local laws or chat with a pro to learn the details.
Why Diminished Value Matters
Even if your whip looks mint after repairs, its accident history can spook future buyers, slashing its resale or trade-in value. Filing a diminished value claim can help you claw back some of that lost dough, keeping your finances in the fast lane.
Final Thoughts
Accidents can be a real drag, but knowing how to tackle the aftermath can soften the blow. By understanding how depreciation works post-accident and being savvy about diminished value claims, you can make sure you’re not left out of pocket.
Reclaim Your Ride’s Worth with Jared’s Auto Appraisals
At Jared’s Auto Appraisals, we’ve been the go-to gurus in the auto insurance game for over 18 years. We specialize in diminished value assessments, vehicle appraisal services, and ACV settlements. Let us help you reclaim the lost value of your prized vehicle. In some states, you can even pursue arbitration against insurance companies for auto damage settlements—a quicker, wallet-friendly alternative to court battles.
Ready to get what’s yours? Reach out today!