If you are ever in an accident, health and safety always come first. Property can be replaced, but life is precious, so you should always ensure you and everyone else at the scene of an accident receives reasonable assistance and timely medical care.
After injuries and health concerns, the most stressful part of a car accident for many people is the damage that occurs to their vehicles. Especially in the Tampa Bay area, most of us rely on cars as our primary mode of transportation. Cars are a substantial investment, and repairing or replacing your car becomes a top priority if it is damaged in a car accident.
Yet another concern is the diminished resale value of the car after the accident. Typically, your ability to sell or trade-in a vehicle that has been in an accident is seriously reduced. If you want to know how much value a car loses after an accident, how to ensure you receive full compensation for loss of value, and how a car accident lawyer can help, we’re sharing the following guide.
How much value does a car lose in an accident?
The amount of value a car loses in an accident varies depending on the pre-accident condition of the car, the severity of the damage, and the quality of repairs. Almost all cars depreciate rapidly, but being in an accident can speed it up even more. By some estimates, car accidents can add 25% to the depreciation rate depending on the damage.
Calculating the Pre-Accident Value of Your Car
To find out how much value a car loses in an accident, you need an accurate picture of your car’s worth before the accident. As a rule of thumb, even a brand-new car loses about 20% of its value the second you drive it off the lot. During the next three years, a car can lose as much as 50% or more of its value, even in a strong used car market.
- Cost of a new car: $30,000
- Value after driving it off the lot: $24,000
- Value after three years: $15,000
Additional factors, such as wear and tear, mileage, and prior damage can increase or decrease the depreciation rate, so it’s important to consider all of these things when calculating your car’s value. Online calculators can help you more accurately assess a car’s aftermarket or trade-in value.
Determining How Much an Accident Diminishes Value
Every accident and car is different, so there is no guaranteed formula to tell anyone how much value their vehicle lost in an accident. The severity of the damage, whether it was cosmetic or structural, and whether it damaged drivetrain components such as the engine all make a difference. Additionally, a car can only sustain so much damage before the total cost of repairs exceeds the total pre-accident value of the car.
For a three-year-old car worth $15,000 before an accident, the after-accident value could be as low as $7,500, even with top-quality repairs. Not all cars lose value in an accident. Very old cars could potentially increase in value if older damaged parts need to be replaced with new parts.
Getting Your Vehicle Repaired
For many people in an accident, the extent of repairs will be limited by how much they receive in an insurance claim. Often, repairs are completed with aftermarket parts or used parts to keep repair costs low, which can further diminish the car’s resale value. Under Florida law, there are strict guidelines for how insurance companies and people involved in accidents value damages and complete repairs. However, insurance companies still have incentives to minimize compensation from a claim.
If you choose to have repairs completed by a higher-quality shop that uses factory parts, you may need to go out-of-pocket on repairs while you wait for reimbursement from your insurance company or the insurance of the at-fault party. In some cases, insurance claims are not enough to fully cover adequate repairs, let alone the diminished value of the car.
What is a diminished value claim?
Diminished value is the difference in the resale value of the car before the accident and after the accident. In the example above, the diminished value of the car would be $7,500. A diminished value claim is an attempt to receive reimbursement for the loss in value from your insurance company or the other party’s insurance company.
Filing a Diminished Value Claim
To file a diminished value claim and receive compensation, you must be able to prove that you were not at fault for the accident and prove the amount the accident has reduced the value of your car. This requires a thorough investigation of the accident and an accurate appraisal of the car before and after the accident. The statute of limitations for filing a diminished value claim in Florida is four years from the accident date.
Receiving fair compensation for a diminished value claim can be notoriously difficult, even if the other party is at fault. This can be due to comparative negligence, uninsured or underinsured motorists, or lack of evidence for your claim.
How an Attorney Can Help
To receive a fair settlement after a car accident, including compensation for the full diminished value of your car, working with a car accident lawyer can help. An experienced attorney can assist with filing a diminished value claim that includes all of the supporting materials and evidence you need. Your attorney can also advise and counsel on proceeding in comparative negligence cases or if the other motorist is uninsured and underinsured.
If you have been in an accident, particularly one you did not cause, you deserve the compensation to be made whole again.
Reach Out to Clark Law Today
If you or someone you love was involved in an accident that may be entitled to a car accident settlement, or have questions about compensation, including diminished value, call our dedicated team at (855) 680-4911 or schedule a free consultation. The longer you wait, the higher the chances that you may lose out on your ability to file for certain types of compensation or on your ability to obtain reliable evidence or advice for your case.
Disclaimer: This blog is for informational purposes only and does not create an attorney/client relationship.