Automobile Diminished Value Advice?

Automobile Diminished Value Advice?

Can someone shed some light on automobile diminished value claims, obtaining an appraisal, whether an attorney is needed?


A vehicle owner has the right to make an auto diminished value claim against the insurance company of an at-fault driver who causes damage to their motor vehicle. The term "diminished value" means your car is worth less after being repaired because of the bad Carfax vehicle history report. Naturally, consumers prefer buying used cars that weren't previously wrecked. Automobile dealerships are usually the ones to break the bad news to new car buyers bringing trade-ins. Because of previous repairs, sometimes regardless of how minor the damage was, dealers are forced to offer thousands of dollars less for these cars. This also applies to cars that were repaired perfectly - a bad Carfax is a bad Carfax and that's enough to dissuade most potential buyers. The majority of dealers don't even bother attempting to retail these vehicles and usually send them straight to auction. Obtaining an automobile diminished value appraisal from a licensed appraiser is the first step toward recovering your car's lost value.Virtually every appraisal company working in the field of auto diminished value either obtains its data using automobile auction results or relies on formulas based on severity of damage, mileage, etc. Insurance adjusters routinely downgrade these types of reports for different reasons.The use of auction results, while illustrating a basic comparison between prices realized for previously damaged vs. virgin cars does not specifically address your vehicle, it's damage, options, mileage, color, etc. Don't scoff at the notion that a car's color wouldn't factor into the equation. Any BMW dealer will tell you that he would pay far more for a white 640i than most other colors because of it's desirability. Therefore, that car's diminished value will be less.Formulas such as State Farm's Rule 17c use what is called "damage modifiers" that assign points according to severity of damage and mileage. Auto diminished value appraisers using this formula must, naturally, use higher modifiers than insurance companies would. This simply creates a controversy over whose formula is right.The St. Lucie Appraisal Company obtains its data directly from the used car managers at automobile dealerships - the people directly responsible for buying the trade-ins. In our query, the year, make, model, mileage, color options, amount and nature of damages is discussed. Based on that information, a dealer can detemine exactly how much less he would pay for the car. We compile six dealer quotes and by averaging their deductions, our automobile diminished value figures are created.It takes about five minutes to run off a list of auction results and even less time to come up with a formula for diminished value. While our method is far more time consuming, the resultant diminished value reports are virtually irrefutable. Should an insurance adjuster opt to spend a half-day soliciting new car dealers they would come up with the same results. Our clients receive much fairer treatment from insurors.Q: What if the accident happened a long time ago, can I still collect for diminished value?A: In each state, the statute of limitations for filing an automobile diminished value claim varies. Check with your state's insurance department for this information.Q: Do I need an attorney to file an automobile diminished value claim on my behalf?A: No. You may elect to hire a lawyer from the outset but it makes fiscal sense to file your automobile diminished value claim yourself. Our reports usually result in satisfactory claim settlements, however, after submitting your report to the insurance company, if you feel that their offer is inadequate or you are being treated unfairly, that would be the time to spring for a lawyer to work on your behalf.Q: If I have an accident that is my fault, can I make an automobile diminished value claim against my own insurance company?A: Not in all states, only in Georgia, Kansas and Washington, but all is not lost. First, many states allow for claims to be brought against your own insurer if the at-fault driver was uninsured. Your car has still lost value as a result of the bad Carfax now attached to it but a portion of that loss is tax-deductible. If your state does not recognize first-party automobile diminished value claims, check with your tax-preparer or accountant for details. The cost of the diminished value report, FYI, is tax-deductible as well.Q: Is the diminished value figure based on my car's retail or trade-in value?A: In order to be fair to all parties and also to make our reports more acceptable to insurance company adjusters. we use trade-in values as a starting point. Should you decide to pursue your claim on the basis of retail value, the percentage of the diminished value remains unchanged so you may simply apply it to the higher retail value.Source(s):



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