Diminished Value ... all of $300

My wife got in an accident back in July. Old lady clipped the front of our car. Lady ran a red light, and was 100% at fault (police cited her, several witnesses, etc.). Damage to our car wasn't terrible, we were able to drive it home. Repairs included new lights, grill, bumper, fender, and a partial respray.

Our car is less than a year old. New MSRP was roughly $30k. Less than 10k miles on it now.

So finally got the "Diminished Value" claim from her insurance. They came back with $300... REALLY?!?

The first offer is always going to be a lowball, it's just how the system works.

But a year old car is only worth 300??

I think the repairs where around $4k. I have to check out the paperwork again. When I picked up the car I was more concerned with making sure they did a good job

But my issue is now Carfax is going to say report a collision. Not that it was only a few parts and some paint. I took detailed pictures showing the damage. But if I was a buyer, I'd knock off way more than $300

I'd be very interested if anyone has a recommendation for such a service. Googling turns up a lot of sites that seem fishy.

I think he is talking about an appraisal company. Did you search for that?

That you received anything seems remarkable. The state I live in does not recognize diminished value claims. The only state I've had dealings with that does is Georgia and they have some convoluted mathematical equation that generates the figure. The insurance company doesn't have any say in it.

Honestly, this is why I think Carfax, et al suck donkey balls. They ding your car with an incident but there is no dollar amount or anything to back it up and help you determine if it even matters. A small hit like you describe, properly repaired, really shouldn't diminish the value at all. If no one could tell it had been fixed without a Carfax saying so, where is the diminished value?

Soapbox rant over. Summation: you may not have a choice as to the amount if the state determines how it is calculated.

I'll only jump into this once, because trying to give a rationale perspective on these topics here is like pissing into the wind.

Yes, there are "appraisal companies" out there that will give you a write up. But they're the equivalent of ambulance chasers. They use nothing but a pre-made template and plug your car in and pull a number out their rear ends. Trust me, I've got dozens of examples of them, and they're all the same. If you want to pay someone $150 for that, go for it. Don't expect to recoup that money, or have it mean a lot to the insurance company...or a judge.

Every company does handle DV differently, but the premise is the same. It's NOT based on the dollar value of the damage. Here's why...if I damage the headlights and grill on a 2014 Mitsubishi Mirage, what's the repair bill? $1000 maybe. If I do the same exact thing to a 2014 Mercedes S class, what's that damage? $5000 or more. Same damage. Most companies base diminished value on severity of damage (judged by the repair estimate line items), age, mileage, condition and pre-loss value of the car.

As ddavid said, most states don't even recognize a 1st party diminished value claim. In other words, if you were to claim DV against your own policy, unless you were in GA, KS or one or two other states, you're not getting it. It's excluded on your policy. If you're claiming it against the other driver, all 50 states recognize the right to make a claim, but there is no case law out there that specifies how that claim must be settled. I researched this just a few months ago. It's 100% subjective. I could argue that as long as the car was repaired properly, there is no DV. If it wasn't repaired properly, that's a matter between you and your body shop.

Last question I'd ask you is what amount were you expecting? I often hear people say their $20,000 car is now worth $4000 less because of an accident. Those reports from the "experts" will say that. If that's accurate, the car is now worth $16,000. Take a peek on Autotrader, Cars.com, etc...go find a car that's just like yours that has a Carfax report of an accident and is listed for $16k. I'll bet you won't find it. Time and again, I find examples of cars with Carfax accidents being sold for the same price as ones with "clean" Carfax reports.

Oh, and on that note, those experts you hire will cite dealer trade in value to try to support their argument. Even court cases (for first party claims) have agreed that when considering diminished value, it's based on retail value...not trade in.

I'm not saying I never pay DV claims. In fact, I'd say about 70-75% of claims made have a payment offer made. But the amount listed by OP sounds about spot on for cosmetic damage (based on his description).

<<<< drops the mic and walks out.

In reply to ddavidv:

CarFax doesn't "ding your car with an incident". They report that there WAS an incident.

If I am a buyer, that's exactly what I want to know. It's my job to then determine what the car is worth to me.

They also don't determine DV. In fact, they don't determine value at all.

They report incidents. That's their job. Use the info as you choose.

It's not CarFax's fault that some old lady dinged his car. It WOULD be their fault if they FAILED to report it.

So, I find that the car had an incident. I ask a few questions about it, see if it was repaired properly, perhaps hire a pro to check out the damage for me. Well repaired, no worries, no diminished value. Thanks CarFax.

Don't shoot the messenger.

The problem with that scenario is that you're rational. Most people aren't, and wouldn't know a good car if it bit them in the ass. They'll see that it was in an accident, and either stop looking at the car in favor of one that hasn't been in one, or they'll make a ridiculous offer.

Not Carfax's fault, but still stupid.

In reply to Swank Force One:

But that is their choice. If they want an accident-free car, they have a right to buy one.

It's still not CarFax's fault, and does not change the value of the car.

A friend of mine got hit. When his Tundra was repaired he had to press the insurance company for diminished value. Finally settled on $2,800. Insurance company never made an offer.

SVreX wrote: In reply to Swank Force One: But that is their choice. If they want an accident-free car, they have a right to buy one. It's still not CarFax's fault, and does not change the value of the car.

Absolutely does change the value of the car. But like i said before, certainly not CarFax's fault, i agree.

In reply to Swank Force One:

As others have pointed out, a well repaired car is still gonna sell for book value. It will also finance for book value. It just won't sell to the scared buyer that wants an accident-free car.

It may diminish the value TO YOU. (and it does to me too), but that does not equate to a diminished value.

But we can agree to disagree on that.

So if an old lady hits the front of your car just right, she can knock two zeroes off its value...hmm, how can I use this to get a McLaren P1 for $20k?

"insurance companies will try NOT to tell you exactly how they came up with their valuation, to fight this injustice, always demand a USPAP compliant appraisal report performed by a third party appraiser"

from website of "diminishedvalueofgeorgia"

Datsun1500 wrote: In reply to SVreX: A repaired car will sell for less than book value. Look at a carfax report, it says right on it $x under book value. Look at the people here buying cars, they all want to see the carfax. As long as the marketing says a one owner, no accident car is the one to buy, anything else will be valued lower.

I concede on the question of value. But it is still a red Herring.

My point was in response to the ever so glorious comment:

"Carfax, et al suck donkey balls."

CarFax is doing their job. They are not in error by reporting that the car had an incident, and it makes no difference if it effects the value or not.

Failure to report it would be wrong on the part of CarFax.

Frankly, I don't give a flying leap whether anyone likes it or not that CarFax correctly reports an incident, or that it dings their report. That's the info I want to see if I am buying, and CarFax sells services to buyers, not sellers.

My issues with CarFax go beyond the current discussion. They market (well) that they are some infallible all-knowing source of information on every car. They aren't. There are tens of thousands of cars out there with clean CarFax reports that have had incidents from miniscule to repaired totals. That they have effectively marketed to the general populace and convinced them a non-clean Carfax is like a curse from god himself hurts every car owner that has had a minor incident.

Carfax is a useful tool. I'd be lying if I said I never used it, but I'm realistic in my expectations. The general, non-car-savvy public is now paranoid every time they come into my shop just for an estimate. "Will this go on Carfax?" "I want diminished value!". You don't see the hysteria like I do.

For mileage, title histories and service records it is wonderful. For accident reports it is far too vague.