is diminished value and how do I know when I am entitled to it?
of value happens when a vehicle is wrecked or damaged in
an accident. The vehicle is then repaired or restored back to a
roadworthy condition. The insurance company agrees to pay for the
repairs. You have your car back, but it’s just not the same.
To help you
see what has happened to your car’s value, let’s take
a trip to the local car dealership. You’ve decided you may
want to buy a car. You know what make and model you’re looking
for and you find two of them sitting on the dealer's lot. You start
to compare options, mileage and features and find they are practically
identical. As the sales person explains the features available on
each car, you learn that one of the two cars was involved in an
accident requiring substantial repairs. You are told that you can
be assured that it is now good as new. But can you? Would you be
willing to pay the same amount for a car that has been repaired?
In a recent
study, 43% of the people surveyed would not buy a car that was in
an accident. 42% said they would buy a car that has been in an accident
but only if it was being sold for a large discount.
So what does
that say about your car? Is it worth as much now that its been repaired
as it was prior to the accident damage? Insurance companies have
been wrestling with this question by their claimants for many years.
Does your insurance company pay for diminished value? Has your car
diminished in value because of the repairs required by an accident?
How do you know?
but we do. Auto Appraisal Services of Georgia is your local diminished
value professional. We make it our business to know. We attend auto
auctions statewide, to gather information on cars sold that have
sustained accident damage. We then compare the sale price of these
damaged and repaired vehicles to the sale price of those that have
not been in an accident. This use of comparables gives us a percentage
of loss of value for each type of automobile. The results tell the
During a recent
dealer survey, we found that dealers diminished a car’s value
by 15% to 50% because it had been involved in an accident requiring
significant repairs. Even though repairs have been made properly,
there is a loss of value due to inherent diminished value. Should
repairs be done poorly, and not up to industry standards, there
may be additional repair related diminished value.
are some of the factors that cause diminished value?
Some of these
factors, but not all are: