How to Calculate Vehicle Depreciation From Damage

Written by nick foster
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How to Calculate Vehicle Depreciation From Damage
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A car accident can have many unfortunate consequences, whether you are rear-ended by a driver using his cell phone or at fault in a head-on collision. Even after insurance claims and bills for car repair, you can expect another longer lasting financial consequence: the value of your car will depreciate. In theory, a vehicle can be brought back to its original market value with proper repairs. But the fact is, even with perfect repairs, a car is not worth what it was before it was crashed. This subjective depreciation is called diminished value. Diminished value can be approximated in several ways.

Skill level:
Easy

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Instructions

  1. 1

    Determine the pre-accident value of the vehicle. This can be done using a car value resource, such as the Kelley Blue Book.

  2. 2

    Hire a professional to repair the damaged vehicle. Ask the professional for an estimate of the effect of the damage on the value of the car.

  3. 3

    Consider factors that determine the extent of the diminished value of a repaired vehicle. These include the year, make, model, pre-accident condition, type of accident, and the extent of the damage to the vehicle. The pre-accident value can be diminished by as much as 18 per cent.

  4. 4

    Take the vehicle to a dealership to determine its trade-in value. Keep in mind that the trade-in value will be lower than the secondary market value of the vehicle.

  5. 5

    Hire a professional to appraise the diminished value of the vehicle post accident and repair.

Tips and warnings

  • In most states the diminished value of a vehicle is not recoverable through insurance claims and is considered a loss to the vehicle owner.

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