The moment you purchase a new vehicle, it begins depreciating in value. After just a few years, your vehicle could be worth as little as half its sticker price.
If your vehicle is involved in a collision in Bowling Green, you can expect the vehicle to lose another 20% of its value.
All is not lost, though. If your car is damaged due to the wrongful action of another motorist, you might still find you can get compensation for the value of your vehicle. Compensation is typically determined by the Kelly Blue Book value of your vehicle. This guide will highlight this process for you.
Flora Templeton Stuart Accident Injury Lawyers represents clients with no fee to collect property damage and assets to collect property damage.
Depreciation is a term used in finance, economics, and business expressing an asset’s reduction in value over time.
Kitchen appliances are a common example of assets depreciating in value. The stove top you bought three years ago might still work perfectly, but its resale value will be substantially less than you paid for it. Electrical goods also depreciate. Your TV and audio equipment will be worth only a fraction of the sticker prices after a year or two.
In most households, cars are the largest depreciating asset. The moment you drive a brand new car off the lot, for instance, its value reduces. According to CARFAX, new vehicles typically depreciate by 10% or more during the first month.
Factors impacting the speed at which a car depreciates include:
Diminished value expresses the loss in the market value of a car after it has been damaged in a wreck and then repaired.
Even when the vehicle is fully restored, its market value still decreases. Diminished value refers to the difference in value of the vehicle before and after the wreck.
Diminished value is categorized as follows:
All of these forms of diminished value concern car depreciation after a crash.
The difference in a vehicle’s resale value directly after a crash but before repairs is labeled immediate diminished value.
You are unlikely to use this form of diminished value if you file a diminished value claim.
The most widely accepted form of diminished value is inherent diminished value. This umbrella term expresses the loss of value of a vehicle due to its damage history.
If the fender and rear doors of a vehicle are damaged in a collision, the car can be easily restored in a body shop. That said, there will still be some diminished value since the accident will enter the car’s vehicle history report.
When considering inherent diminished value, it is assumed that repairs are made optimally.
Repair-related diminished value expresses the loss in value of a value based on sub-par repairs, mismatched paint colors, for example.
Poor quality repairs will increase a car’s depreciation, and repair-related diminished value considers a vehicle impossible to restore to its original condition.
When you drive a new vehicle off the lot, it will lose at least 10% of its value within the first month. During the first three years of ownership, a car depreciates by anywhere from 40% to 55% and above. The variables outlined above influence the rate of depreciation.
If the vehicle is involved in an accident, the rate of depreciation will accelerate further.
To determine a vehicle’s diminished value, most insurance companies utilize formula 17c, named for a claims case involving State Farm. 17c refers to where diminished value entered the court records.
To calculate diminished value using formula 17c requires the following four steps:
Despite this formula being almost universally used by car insurers to calculate diminished value, it is a flawed formula that frequently leads to lower diminished value appraisals that do not reflect the true diminished value of a vehicle.
If you need to file a diminished value claim for your vehicle, expect the process to be involved and time-consuming.
Many insurance companies deny diminished value claims when the claimant is unable to prove lost value, whether through failing to properly complete paperwork, or through failure to comply with the insurer’s demands.
The complexity of diminished value claims means it is advisable to speak with an experienced car accident attorney. Trying to deal with insurance companies alone can be challenging, and you have less chance of achieving the best outcome.
Flora Templeton Stuart Accident Lawyers in Bowling Green, Kentucky, has helped many people just like you navigate the car accident claim process. We never charge a fee for property damage when we represent a client injured in a car accident. Our attorneys also work on a contingency fee basis, meaning that you pay nothing unless we win your case. If you have been injured, contact our experienced Bowling Green car accident attorneys today for a free consult.
Flora Templeton Stuart is the lead attorney and founder of the law firm Flora Templeton Stuart Accident Injury Lawyers, established in 1976. Flora goes to work every day to make a difference in her community and the lives of her clients. When you call you will get a personal representation and an attorney who truly cares.
