How much does your car drop in value after an accident?
You just had an accident. When your car is repaired it is legitimate to ask, how much has my car dropped in resale value because it has been in a reported accident.
Insurance companies will pay to fix your car or give you the loss value, meaning they will buy it from you and sell it for junk. This article focuses on the repair issue. First, if your frame is bent a repair may seemingly fix the car but the car may not handle the same as before the accident. Even if all of the tested metrics appear to be within range, a subtle and not easily measurable shift in the balance of all of the test components can change how the car feels when it drives. Also an impact that damages the frame will damage other parts of the car that are not measured.
Even if the car is 110% fixed - better than before, there is a loss in value on resale. The term for this loss is “diminished value” and you can recover for this from the other side. According to Carfax data, the average drop in price is about $500 but this is a very rough data point. This average impact on retail value jumps to $2,100 for a vehicle with severe damage. And again, what is the starting value of the car. If you have a $ 10,000 car the drop may be $ 500 dollars. If you have a $ 100,000 car the drop can be $ 5,000 or more. Dealerships will use a prior crash as a bargaining tool (against you) when you try to trade in your car.
Your lawyer will make a claim to your insurance and the other side’s insurance for difference between your cars value before an accident and its value after the accident related repairs are completed. CARFAX has an article on diminished value claims which is worth reading.
Another factor is the resale of your previously damaged car. You should keep all the records of the repairs so that a buyer can have confidence that he/she knows the full extent of the damage and the full extent of the repair.
JD Power has a diminished value website.
They indicate that the use of aftermarket parts rather than genuine or original equipment manufacturer (OEM) parts can reduce resale prices. They also explain how to calculate the loss in value to your car after an accident.
Do You Need a Lawyer?
If you have been involved in a car accident our personal injury lawyers can assist you in receiving the full and proper value for your losses. Our offices are located in Lafayette, California (Contra Costa County) and we handle car accident cases in California. There is never a fee unless and until you recover.