Learning how to calculate diminished value takes only a pen and the calculator on your phone. Diminished value is the drop in your car's selling price because a crash is now on its record. Even a good repair does not undo that drop. You will figure out two numbers. The first is the 17c figure. Many insurance companies begin with this low number when you ask them to pay for the loss. That request is called a claim. The second is the market range. It is a low and a high guess of how much less a buyer would pay for your car. If you would rather skip the math, our diminished value calculator does the work for you.
What Do You Need Before You Start?
- What your car was worth right before the accident. You can check this on Kelley Blue Book or NADA Guides. Both are websites that list prices for used cars. J.D. Power, a company that tracks the car market, says to do this step.
- How serious the damage was. You choose one of five levels. The lowest level covers only damage to the bumpers or body panels. Body panels are the outer parts, like doors and fenders. The highest level is a badly bent frame. The frame is the metal skeleton under the body of the car.
- The number of miles on your car on the day of the crash.
Your repair bill is not needed for this.
How Is Diminished Value Calculated Under 17c?
17c is a formula that many insurance companies use to make their first offer. The name comes from a lawsuit in Georgia. In that case, a court order spelled out the formula in paragraph 17, section C. The formula cuts the amount down in two steps by applying two multipliers. A multiplier is a number somewhere between 0 and 1. A multiplier of 1.00 keeps the full amount. A multiplier of 0.50 keeps half of it. A multiplier of 0.00 keeps none of it.
- Start by taking 10% of your car's value before the accident. Your 17c figure can never be more than this amount.
- Then look at the first table and find the row that fits your car's damage. Multiply the amount from step 1 by the number in the 17c column.
- Now check the second table for your mileage. Multiply your new amount by the number shown in that row. The result is your 17c figure.
| Your damage answer | 17c multiplier | Market range (% of value) |
|---|---|---|
| Frame badly damaged | 1.00 | 15% to 30% |
| Large damage to the frame and many panels | 0.75 | 10% to 20% |
| Some damage to the frame and several panels | 0.50 | 5% to 12% |
| Small frame damage and a few affected panels | 0.25 | 3% to 8% |
| Panels or bumpers only, frame not touched | 0.00 | 2% to 5% |
| Your miles answer | 17c mileage multiplier |
|---|---|
| Under 20,000 | 1.00 |
| 20,000 to 39,999 | 0.80 |
| 40,000 to 59,999 | 0.60 |
| 60,000 to 79,999 | 0.40 |
| 80,000 to 99,999 | 0.20 |
| 100,000 or more | 0.00 |
If either table gives you 0.00, your 17c number is $0. This happens when the frame was not damaged, or when the car has 100,000 miles or more. Getting $0 does not mean your car lost no value. It is just the way the formula works. In one court case, State Farm paid nothing under this rule for a car with more than 100,000 miles.
How the Market Range Uses a Diminished Value Percentage
The market range better reflects the prices buyers actually pay. Every damage level comes with its own diminished value percentage. You can find it in the last column of the first table. You apply that percentage to your car's value before the accident. The cost of repairs is not part of this calculation.
- Look at the first table and find your damage level.
- Take your car's value and multiply it by the low percentage. That gives you the low end of your range.
- Take your car's value and multiply it by the high percentage. That gives you the high end of your range.
The calculator rounds each answer to the nearest $50, so its numbers might not match yours exactly.
How we chose the percentages
There is no public study that puts a market loss figure on each of the five 17c damage levels. So we used three sources.
- CarGurus, a website for shopping for used cars, reviewed 2 million car listings. Cars that had been in a crash were usually priced 3% to 12% lower, Forbes reported.
- Property Damage Pros, a Utah law firm, has its own appraisers. An appraiser is a trained expert who figures out how much a car is worth. The firm uses 2% to 5% for dents and bumpers, 5% to 12% when several panels or an airbag are involved, and 15% to 30% when the frame is bent.
- Car Value Law, a second firm, uses 10% to 20% for medium damage.
When the sources disagreed, we used the lower number. That means our ranges are on the careful side. The two middle levels fill in the gaps. The 3% to 8% level starts at the low end from CarGurus. The 10% to 20% level matches what the second firm uses.
How to Calculate Diminished Value by Hand
Here is an example car from J.D. Power. Before the crash it was worth $30,000 and had 45,000 miles on it. The crash bent the frame slightly and left dents in a few panels.
For this car, the 17c number is $450. The market range runs from $900 to $2,400. That means even the lowest end of the market range is double the 17c number. Based on our figures, the market range always starts at or above the 17c number.
See the math for this car
- Start: Take 10% of $30,000, which equals $3,000.
- Damage: Small frame damage gets a 17c multiplier of 0.25. $3,000 times 0.25 gives $750.
- Miles: A car with 45,000 miles gets a multiplier of 0.60. $750 times 0.60 gives $450, which is your 17c figure.
- Market range: For small frame damage, the market drop runs 3% to 8%. 3% of $30,000 is $900, and 8% is $2,400. So the range is $900 to $2,400.
What Does Your Result Mean?
The two numbers answer different questions. The 17c figure is what the insurance company's formula produces, and it is often where the company begins. The market range is closer to how much less a buyer would actually pay.
17c comes with strict rules. It never pays more than 10% of the car's value. You get $0 if the frame was not hit, and $0 once the car has 100,000 miles or more. Even so, buyers still offer less money for a car that has a crash on its record. Carfax, a company that sells reports about a car's crash history, says the price falls by about $500 on average.
No single diminished value formula works for every car. It can help to compare an offer against your repair bill. The NAIC is the national group of state insurance officials. A study in its journal found the loss is often about 10% to 20% of the repair bill. We could not find a reliable average diminished value settlement, which means a typical amount insurance companies pay. So do not treat either number as a typical payout.
What Does the Estimate Leave Out?
- It is not an appraisal. Your diminished value estimate is based only on the three answers you give. No one inspects your car. If your claim is large, Kelley Blue Book suggests paying a certified appraiser, which is an expert who holds a professional certificate. Our appraisal guide covers when that cost makes sense.
- It does not check the repair work. Bad repairs, such as paint that does not match, can cost you extra. This tool does not count that added loss.
- It ignores your car's age and brand. Kelley Blue Book says a newer car with fewer miles is more likely to get paid. The Insurance Information Institute, an insurance industry group, says an older car can sometimes be worth more after a repair because old parts are replaced with new ones.
- It covers only the fall in selling price. The repair bill gets paid separately. If your car was a total loss, meaning it was not worth fixing, you receive its value right before the crash. That is what the Washington state insurance office says.
- It does not say if you can claim. That depends on your state and on who caused the crash. The Insurance Information Institute says a driver hit by someone else can claim this loss in every state except Michigan. Our state rules table shows the rules for each state. This is general information, not legal advice.
What Can You Do Next?
If your 17c number is far below your market range, you can use that gap as a reason to ask for more money. A demand letter is a brief letter that asks the insurance company to pay a specific amount. Our demand letter template writes the letter for you. To understand the insurance company's point of view, read our guide to the 17c formula. Never done this before? Our guide on what diminished value means covers the basics.