Diminished ValueBeen in a Car Wreck? Brand New Car? Get Reimbursed for Lost Value
Here's something I wish I had known about when another driver plowed into my new car, a car that was only five months old: diminished value.
The other at fault driver’s insurance company paid to fix my vehicle, but just the fact that it had been in an accident diminished its value. It was no longer as sound. One former automobile dealership general manager says his dealership used to automatically offer 30 percent less for a wrecked trade-in if it had frame damage.
But the car accident wasn’t my fault. When I went to sell the accident involved car, the professionals easily could tell that the car had been wrecked and rebuilt. That other at fault driver -- or their insurance company -- should have paid me for that lost value. I couldn’t get as much for the wreck involved car, so I didn’t have as much to put toward my next car. Many people don’t think about the new, lower value of their vehicle after an accident. Instead, we just worry about how long it’s going to take for the body shop to fix the car so we can get back to our lives. If you have a newer vehicle or an expensive one, you must ask to be compensated for diminished value of the vehicle.
The insurance company won’t offer. Insurance companies try to avoid paying for diminished value of a wrecked vehicle.
It’s important to pursue a diminished value claim right away, because most states have a statute of limitations on property damage claims, often three years. Most automobile insurance contracts prevent you from making a diminished value claim against your own insurance company. Where you may succeed is by going after the other driver’s auto insurance company because you don’t have a contract with them. Plus, the whole point is that the accident wasn’t your fault.
Why Diminished Value Matters
Let’s say your car is worth $14,990. If you succeed with your diminished value claim, that 33 percent difference becomes your savings. Take a look:
Ford Taurus value before accident: $14,990
Ford Taurus value after accident: $9,893
BIG SAVINGS = $5,097
$5,097 is a meaningful amount of money that you deserve to put toward your next car.