Monday, August 3, 2015

Is my car worth less after an accident?



It really depends on a number of factors.  

The technical term for this loss is accelerated depreciation (in Canada) and diminished value (in the US)


Here are a five factors:

  1. Severity  - The final cost to repair a car doesn't always signify substantial damages.  You have to dig deeper than the total final cost.  We have seen a Porsche that had $11,000 brake rotors.  You really need to understand the damages.
  2. Structural damage?  Understanding if a vehicle has sustained structural damage is a bit more of a complex situation.  Structural damage is more than just frame damage. In today's age of Unibody construction, there is more than just the frame rails to consider.  Good body shops will go through the repairs to explain if there was any structural damage.
  3. The market - Depending on the market, an accident may or may not have an impact.  If you have a mass produced vehicle that has sustained damages of $10,000 it may be more difficult to sell, due to supply and demand.  A 2012 Dodge Grand Caravan with a $10,000 may be more difficult to sell due to the supply and demand.  If there are 500 of these vehicles for sale in the exact same color / option combination then why would a buyer pay the same for a previously damaged version.
  4. Confidence - Confidence plays a large role when determining how much a car is worth.  If your vehicle is damaged and you do not understand the damages, it will be difficult for most to sell. Putting the damages into context is an important part of maintaining your vehicle's value. Understanding the breakdown of the repairs is always important.  Some insurance companies will include the cost of the vehicle rental into the total cost of repairs.  In some instances, this can be upwards of $1000. 
  5. Quality of repairs - If the repairs are apparent, it may be more difficult to sell a vehicle for top dollar.  Is it not only the responsibility of the body shop completing the repairs to return the vehicle to pre-accident condition, it is your responsibility as well.  It is unfortunate when accidents occur and it is even more frustrating when the accident was not your fault.  But you still need to do what you can to mitigate any losses.  Making sure the body shop repairs your vehicle properly is ultimately your responsibility.  If your body shop will not fix the vehicle properly, there are ways to involve the insurance company to get your car fixed.
If you've been in an accident and you need help, feel free to give us a call.  We are here to help!

778-908-2804
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