You’re driving down the road, singing along to your favorite song, thinking about the good times ahead. And in an instant, your perfect world is turned upside down. There’s glass everywhere, you can hear the sound of metal crunching, and the airbags launch jamming you between it and the seat. You take a few seconds to consider your predicament. You’ve been in a car accident. Now your journey back to normalcy starts.
But you’re okay. You have insurance, right? Did you read the fine print when signing on the dotted line? No, you didn’t. You just thought that everything looked fine. You never thought for a second that you would be in a car accident. Nobody thinks that when buying a car. But you should have read the fine print because one of the sections was about diminished value. That is something you have to put up with now.
Why do you have to put up with a diminished value? For this purpose, we will have to look at an example. Suppose you are about to buy a car. There are two cars in front of you. Both are exactly the same. The color, the model, the parts, the condition, everything is the same. There’s just one difference. One of the cars has been in an accident. It has been repaired back to its original condition, but the car history tells you that it was in an accident.
Which car will you buy? The one with the history of accident or the one that has been untouched?
Of course, we will all opt for the car that didn’t have the accident.
That is why the car with the accident will have a lower value than the perfect one. If both had the same price, nobody would pick the car with the accident. Everybody will go for the other car.
There’s a difference between the diminished car value of a new car and an old car after an accident. The older the car gets, the smaller the diminished value gets.
Most insurance companies use a rule called 17C to find out the diminished value of a car. It takes into account the car’s original value before the accident and adds up a couple of factors to come up with the new diminished value. These factors are:
• A base loss value
• A major damage multiplier
• A deduction based on the car’s mileage.
Here’s how you can find out the diminished value of your car.
The easiest way is to find an online diminished value calculator to find out what your car would be worth under normal circumstances. Once you have that, you can ask your dealership to give you a trade-in value for your car. Make sure to tell them that the car has been in an accident. Once you have that, you can deduct it from the original price that you found out earlier and you will get a pretty good idea of the diminished value of your car. It’s not an accurate figure but it will give you a ballpark figure that you can work against.
The second way is to approach a professional appraiser company that specializes in diminished value insurance. This will give you the most accurate figures as this is what they do all the time. You can rely on the numbers that they provide for you.
So, now you know what diminished car value is and how to find it. Make sure that you only work with professionals so you can trust the value that they get for you.