Diminished Value Claim

[TwistedGray]

Has anyone had to do a "diminished value claim" on their car before? If so, would you mind sharing the details (online or privately)?

My otherwise mint 1984 Laser XE was rear ended, and while it is quite minor the rear bumper will either need replaced (unlikely) or repaired and painted (likely). The car was accident free until today when it got bumped in a parking lot, and now it will carry and accident on its record.

Any suggestions would be appreciated for those who have gone through the process...I am about to call their insurance company which I dread.

The car's value before the wreck is debatable given its age; however, with 37k original miles, otherwise mint condition, I know what I was expecting to get when I sold it this summer. I know that I won't get that value given the accident report.

 

[Amadeo38]

Just let the initial adjuster know that you were planning on selling it this summer and that you want to make a diminished value claim on the vehicle and it will be transferred to a separate adjuster for an assessment.

You can then negotiate with that second adjuster about how much you want. There is an upper limit for what the insurance company will pay and they usually offer you about 1/3 to 1/4 of that upper limit initially. For example, if the diminished value adjuster says they’ll give you $500, you can probably guess they can go as high as $2k, begrudgingly. So you come back at them with $2k and they’ll make another offer. Just negotiate back and forth until you’re satisfied.

 

[TwistedGray]

Just let the initial adjuster know that you were planning on selling it this summer and that you want to make a diminished value claim on the vehicle and it will be transferred to a separate adjuster for an assessment.

You can then negotiate with that second adjuster about how much you want. There is an upper limit for what the insurance company will pay and they usually offer you about 1/3 to 1/4 of that upper limit initially. For example, if the diminished value adjuster says they’ll give you $500, you can probably guess they can go as high as $2k, begrudgingly. So you come back at them with $2k and they’ll make another offer. Just negotiate back and forth until you’re satisfied.

Thank you for the information.

I think the biggest issue that I am going to have is lack of value on the car. I know I could have sold it for $5,000-6,000 because that's what they usually go for for higher mileage examples. The caveat is that most sales have been through Ebay with a few Craigslist listings that are all expired, of course. The condition of mine is somewhere around 8.5-9:10 but with 37k miles, and the original owner paid for all the additional stuff you could (all the additional stuff, I have the original window sticker).

A few examples do exist though (Sothebys listing, one, another, another...).

I feel that there is going to be A LOT of fighting (rather, negotiating) and drinking...

 

[Homergah]

I feel your pain. A non insured crack head cratered the front end on my 2007 Shelby. I bought the car for investment reasons. It was built by Carroll himself. Now it has a $5000 wreck on it. Lawyers are now involved, which I really hate. Anxious to see if you get some more sound advice in this. And best wishes. Hope it all works out to your satisfaction.

 

[Steveruch]

I don't understand why such a minor repair, if done properly, would have much effect on your car's value.

 

[madscientist451]

Read your policy. Terms vary from state to state but there should be something in writing about how the value of a claim is determined and what occurs if the two sides can't agree.
I had a similar problem in Virginia many years ago when I totaled a used Volvo that I bought from a dealer that had a brand new engine installed right before I bought it. State Farm tried to low ball me and gave me the runaround for more than a month. I was injured in the wreck and was hobbling around on crutches taking the bus. They used stalling tactics in the hope I would get tired of not having a car and settle. I had the paperwork for the newly installed $7500 engine, but they acted like that didn't matter. Finally, I read in the policy that the State Insurance Commissioner settles all disputes, so I called the Insurance commissioners office and it took a while to reach the right person, but after I explained the situation, the guy on the other end told me: "don't worry, I'll take care of it". About a half hour later State Farm called with an acceptable offer and I had the check about 2 hours later. I was amazed what a simple phone call could accomplish
I found out later that the guy I talked to was the #2 guy in the Insurance Commisioners office and he frequently played golf with all the insurance bigshots in the state. I believe he didn't feel like going though the process of having a hearing ( I told him I knew there was an arbitration process and I was entitled to a hearing).
So find out what the rules are, get a realistic number in mind and go for it.

 

[TwistedGray]

I don't understand why such a minor repair, if done properly, would have much effect on your car's value.

You'd be shocked! I've gone through selling a vehicle that has similar damage to mine now (just a bumper). I lost about $3000 on the value from just that.

The logical of WHY is quite simple.

Put two identical cars next to each other, one in a wreck and repaired like new and the other. They are otherwise identical. Would you pay the same for both or expect the wrecked and repaired one to be less expensive?

It doesn't matter if it's a $5,000 car or a $500,000 car, the logic still applies.

 

[Gnomebrewer]

Drunken ramblings? You must all be geniuses when you're not drunk!

 

[DIMINISHEDVALUE]

Hello all. Since this is what I do for a living I'll give you the 411 for your claim and for anyone else about to enter "diminished value hell" which is an appropriate description of the claim process most of the time. What the other posters have written about back and forth is true. I tell every client that they need two things - a good appraisal and persistence. If you aren't pro-active you won't recover anywhere near what you've lost.

In practical terms, we research multiple sales managers at new car dealerships to obtain our data, a newer model car with minor damage will lose approximately 10%-15% of its pre-accident Fair Market Value. Structural damage, air bag deployment and, to a lesser extent, disabled/towed will result in an approximately 35%-50% loss in FMV.

Your car is older so it won't be affected as much as a newer car but, assuming the car has never been in a previous wreck, you would still be out 10% of the FMV. By your assessment of the value, your cars diminished value would be approximately $500.

 

[TwistedGray]

Your car is older so it won't be affected as much as a newer car but, assuming the car has never been in a previous wreck, you would still be out 10% of the FMV. By your assessment of the value, your cars diminished value would be approximately $500.

Where do you come up with 10%? That's seems incredibly low given the collectible nature of low mileage, classic cars. I'd be speculating, but it's gotta be closer to -25% or more.

 

[DIMINISHEDVALUE]

I don't believe that this car is very collectible despite the low mileage and condition. I'd bet that one of these independent appraisers who uses a short cut like a formula or algorithm might conjure up a higher number. If I ask a Chrysler dealer how much less he would pay for this car in a trade with that accident history I doubt if he would devalue it any more than that. Of course, most of the thousands of these appraisals I have done were for newer cars so with something like this, you just never know until you do the research.

 

[TwistedGray]

I don't believe that this car is very collectible despite the low mileage and condition. I'd bet that one of these independent appraisers who uses a short cut like a formula or algorithm might conjure up a higher number. If I ask a Chrysler dealer how much less he would pay for this car in a trade with that accident history I doubt if he would devalue it any more than that. Of course, most of the thousands of these appraisals I have done were for newer cars so with something like this, you just never know until you do the research.

A "thing" is only ever worth what someone else is willing to pay for it, and there are historical sales of this car with equal (+/-) miles that have sold for more (to the tune of $12-14k). To fetch that kind of a price tag this one would need new paint (mine is probably 9:10) with pin stripes, etc (I have some of these already on hand should I want to go that route).

A Chrysler dealer will give me a couple hundred dollars at best. From my calls yesterday, "Yeah, it sounds immaculate given the age and miles and what not, but realistically we are not in that business. Even without an accident, you would be looking at something like $500...maybe someone here who loves older cars would put up...oh, I don't know $5,000-6,000?" (their words, not mine). But we would not be interested.

That is going to be the fun part ... the rabbit hole

 

[TwistedGray]

Update

I just talked with the Allstate Claim Adjuster, and she was nothing but helpful.

I told her my concerns about the situation both from the diminished value perspective and one that I felt that any body shop will have a hard time matching 35 year old paint. I told her I was not going to take it to a "regular" body shop and would instead seek out one that has done work on "older" cars.

She told me to take the car to a shop that specializes in classic and antique vehicle restoration, show them the estimate that Allstate gave me for repairs ($700), let them decide the actual cost ("they may have to paint the whole car because they will have a hard time paint matching"), and have them submit the diminished value report based on their expertise.

^ Her suggestion to me.

I am still quite skeptical that all this will work out, and I won't accept any claim until I know I am not going to get the short end.

I'd rather have a dented bumper than a fixed bumper and a tainted history. I think the new owner would prefer a dented bumper over a fixed bumper with an accident on the history UNLESS the price was low enough to offset the diminished value from the accident.

We will see ... I will keep you all updated.

 

[DIMINISHEDVALUE]

Keep in mind that repairing the car is not a prerequisite for submitting a diminished value claim.

 

[TwistedGray]

Keep in mind that repairing the car is not a prerequisite for submitting a diminished value claim.

I absolutely understand; however, I won't go through the process of repairing the car unless I know that I will be awarded the difference of value.