Severity of Damage and Inherent Diminished Value

In a professional forum for diminished value providers, we had a member inquire about how the amount of the repair bill affects the diminished value (inherent) of a vehicle. It is my experience that the amount of damages is an imperative factor to have in order to accurately assess diminished value.

Let’s dig right into the details…

repair bill affects dv

Truth About How The Repair Bill Affects Diminished Value

Here are some things I have found to be true when surveying dealers and individuals regarding inherent diminished value:

  1. It is not the cost of the repair, but the extent of the damage and quality of repair that is to be measured.
  2. The extent of the damage is directly relational to the amount of stigma related value loss.
  3. The types of operations allowed on “insurance company controlled” repair estimates may restrict proper repairs and cause repair related losses in value if you or your shop do not address omitted or inadequate repair estimations.

A few experts disagree with me on the above facts, and all I can say is that I think I can prove my data is more accurate. The main argument of those in dissent is that the amount of damage on the repair bill isn’t really that important because it is the fact that it was DAMAGED, not how much, that gives the stigma and affects the value. I can see the point, but let’s see if I can make an example where that doesn’t hold true.

Picture this:

download our free dv guideJoe is headed to karate school with his 10 year-old and they are involved in a pretty major collision. Joe’s 2013 Volkswagen Passat Wolfsburg is not drive-able from the scene of the accident. After taking it to the shop, the repair bill shows both brake lights, the trunk, rear floor pan, and both quarter panels needed repair. The right rear frame rail needed 2.0 hours of pull.

Coincidentally, Joe’s wife also drives an identical Passat and in her hurry to reach the accident scene, she bumped the car behind her when getting out of her parallel parked position. The damage was limited to a little hole about the size of a dime in her rear bumper cover.

Which has the most lost value after repair, assuming the repair quality is excellent on both Passats?

If you’re unsure of how to calculate your diminished value, a little research and an expert on your side is invaluable. We are always here to help answer questions and we offer a free claim consultation on all DV and total loss cases!  Just fill out the form below if you are dealing with a repaired vehicle and claiming your diminished value and we will take a look and give you some really good info to stew over!