Basically, diminished value is the reduced resale cost. This can be due to a vehicular accident supported by the history report on the case. Additionally, this case can be categorized as either inherent or something that is related to repair projects.
When you talk about the “inherent diminished value”, there is a correct and completed repair work. However, the stigma attributed to the unpleasing history report that is left causes the loss. On the other hand, “repair related diminished value” the loss is due to the bad job done by a repair company. Most of the time, cars reduce or lose their fair market value due to noticeable (or even unnoticeable) results in the repair works.
Value diminution, accelerated depreciation of value, DV, and/or DAV is also used to refer to Diminished Value.
We provide you a Diminished Value Estimate for Free
Simple: There are certain documentations consumers thought that are legitimate. However, these are not deemed legal proofs. Some of these include the following:
– Appraisal used in car trade from an auto dealership
– KBB, NADA print out generated online
– Automated cheap report
The right way to obtain a fair arrangement for your claims is to secure a USPAP-compliant appraisal. In case you do not know, this is the sole appraisal documentation that is certified and approved by most insurance companies, insurance commission, and the Congress. In addition to that, this is the only lawfully recognized appraisal that considered and can be used in court if you want to prove that your vehicle suffered from diminished value.
Diminished Value Calculator
A lot of insurance companies use the commonly known ‘dealer quotes’ or auction data, even in the absence of the particular dealer that should have been evaluating the car. In trade value, this is absolutely fraudulent. There will be a diminished value when a car, for example, suffers loss (or reduced) resale value as a result of an accident. In the assessment of your car’s diminished value, we consider and use three major components which are:
Over-all value of the vehicle that includes:
- Actual monetary value, wherein every vehicle tends to lose its value depending on distinctive speeds
- Class of vehicle –entry level, upscale, luxury, and more
- Market inventory
- The vehicle’s desirability index
- Vehicle type –a pickup truck, minivan, and/or a 2-door or 4-door vehicle
Damage Location, Severity, and Type- We also check for the following:
- ‘Unibody’ Damage
- Airbag Deployment
- Damage to the vehicle’s Value Ratio
- Frame Damage
- Parts Ratio
- Structural Damage
Vehicle History & Dealer Reporting- We are looking for:
- Dealer Inventory
- Many options
- Market Comparable
- Number of owners
- Personal and/or commercial use
- Previous Accidents
Learning the Methods of Calculating the Diminished Value
You will be able to determine the sum of your vehicle’s economic loss by calculating the discrepancy that an average dealer could have paid you in trade for the vehicle’s actual value before the damage has been done or acquired. Note however that only the damages proven to be evident during the actual time of vehicular accidents and the allowance amount in trade shall be considered and provided for your vehicle.
Diminished Value Formula and 17 c, inaccurate and biased Diminished Value Calculation
Some insurance providers argue that the right way to compute the DV is by the use of the so-called “17c” formula, which is driven from the ‘Marby v. State Farm’. Nothing is too difficult in computing the DV. Simply, it goes this way:
- Fair Market Value before an accident – (minus) the Fair Market Value of the vehicle after an accident/repair work.
Using this formula, a vehicle with $20,000 FMV (before an accident) will be devalued to $ 16,500 after an accident and repairs. This simply means that you are only limited to receiving as little as $3,500 for the DV. Why do insurance companies choose to use this basic formula? Well, this is because they gain more while real victims do not get what they truly deserve.
Why the 17c Formula is Flawed for diminished value?
A. This formula incurs ‘double deductions’ for a vehicle’s mileage, specifically for starters. NADA is used by insurance companies to appraise a vehicle’s FMV. The actual mileage that the vehicle has run is taken by NADA into account. But the 17c requires additional ‘mileage modifier’. This greatly lessens the value assigned by NADA attributed to the mileage of the vehicle.
When NADA has already taken a vehicle’s mileage in to account, there has to be not additional deductions on its value when conducting the assessment.
B. There is the so-called ‘damage modifier’. This considers the kind and severity of damages as well as the actual damages obtained by the car, excluding the repair cost as the basis. This is a senseless idea. There is no way anyone can come up with the precise evaluation results of the vehicles damages without using the repair cost as the basis.
C. The adjuster evaluates the damage using this ‘damage modifier’, which subsequently offers several options such as ‘no structural, minor, moderate, major, and severe damages’. The way the case is assessed is highly subjective in nature. With the use of these obscure options, it will certainly be unfair on the part of the claimant since the repair cost for your vehicle has been taken into account. These are the reasons why this formula (17c) is not a reliable and or client-friendly formula for computing a vehicle’s Diminished Value.
NADA and KBB are wrong for Diminished Value
All dealers of car are utilizing BlackBook, yet some insurance companies are utilizing NADA. Updates found in black book can be used for auction sales as well as car sales within a specific weekly basis in accordance to sales. This will come from all parts of car industry upon using NADA for more than any ranges. This is possible thru the use of some appraisers together with the insurance company. Yes, there are many appraisers who will give a very low appraisal; this is in order to make every insurance company satisfied and happy as they purchase appraisals from this service provider. The blue books from Kelly will be utilized too for most cases thru the consumer’s market as the general tool. It will drastically range on the kind of vehicle used and to be sold for.
CarFax and Diminished Value
Most people live and die thru carfax report, thus the reality is the evident countless reports that are not updated for more than years already or even after a car accident happened. There are identified disclosures laws found in every state, which will make the individual sell the car without providing information that the car has already engaged in an accident. There are many cases when the car has been reported in any history bureau of car that makes the car to be scary unless this is sold. It will be possible by selling in a discounted price having the second chance of financing and the like.
Trade In Value After an accident in Diminished Value
It does not matter how little the car accident can be and whenever a car accident happened on the car dealer, you do not have any excuse of paying it in a small amount as much as possible. This is intended for your car that you would like to sell. There are countless of people who are afraid to sell their car especially it was already involved in a car accident. It will no longer be in the same state or as strong as before that might break down as well. Therefore, the car dealer will play on your fear while attempting to provide lowest amount, which you will start to accept in purchasing the accident vehicle. This might be risky, but it will only take you to look for car dealers who will make a good arrangement for it.
Trade in appraisals for Diminished Value Proof
There are countless of people who are trying to go in local dealer while getting proof in diminishing the value of money from a dealer, trade intended for appraisal, which can be considered as biased representation of the value. This is because the dealer will stand to obtain profit while having vested interest to it. This will not be utilized as proof for any claim. If you will decide to obtain 10 car dealers in almost each single dealer will provide a variation of the price or value of your car. This will almost become different for thousand ranges.