Diminished Value – How Does Texas Compare?

In Texas, if you file a third party auto claim, then if your claim meets certain standards, you would likely recover diminished value if the case went before a jury.

Negligence Law Rules

Texas compares to other states in this capacity through the negligence law rules. In Texas, if one is over 50% at fault for a loss, then they cannot recover damages from a less negligent party. The kicker is that if they are only 10% at fault, then that 10% can be deducted from their damage amount.

Some States have a law that applies negligence in a pure manner. For example, if you are 10% at fault, then you owe 10% of the other person’s damages. If you are 61% at fault, you can still recover 39% of your damages. The point, and to answer the question in the title of this article, is that YES you can get paid for diminished value in Texas.

What Is Diminished Value?

The simplest way to define diminished value is to use a common example. Let’s say you aspire to own a 1985 Mercedes Benz coupe, so you go out shopping for one. You hit all the markets, internet, classifieds, used car lots and the such, and you find 4 of them out there. There are some sweet deals out there. Let’s list them out as a purely hypothetical situation.

 Car 1:  It is black with a gold pinstripe. It has only 90,000 miles on it. The listing came from a dealer and the price on the vehicle is $12,000. The dealer ad says it was a one-owner vehicle, non-smoker, and no major issues. It is touted as being a “cherry”.

 Car 2:  This is a white one. It has 72,000 miles on it. This is a little old lady who got the car as a gift from her husband 4 years ago and she put it in the classifieds to try and sell it. She is asking $11,500 for it.

 Car 3:  Another dealer vehicle. It is Forest Green and has 80,000 miles on it. The dealer wants $12,200 for it.

 Car 4:  This one is another black one you found on E-bay. It has just 40,000 miles on it! It also has the gold pinstripe, and the owner says he is the original owner. He is asking $12,000 for it. It has new tires, and gold spoke aftermarket wheels!

 Okay, so you can’t decide? There’s a lot to think about.

 Which One Would You Choose?

You want black, so it’s between the black one at the dealer with 90,000 miles on it and the black one off of E-bay with 40,000 miles on it. You call both of them up and see who will give you the best deal. You are able to get the dealer to take $500 off theirs, and the individual also agreed to take $500 off – the dealer then reduces the price by another $200 because you mention the gold spoke wheels on the other car.

You think it is a done deal, right?

So, you call back the individual and start the talks about where to pick it up, how to pay and such, and you just casually ask the guy why he put the gold wheels on it. His answer is that a few months back, he ran over a curb trying to avoid a guy that ran a red light and it bent up the suspension and messed up the wheels and he ran into a chain link fence.

He says he has the estimate from the insurance company, so you get it from him and tell him you need to think about it. When you get the estimate, it is pretty much just like he says – there is about $5,000 worth of damage:

  • The undercarriage and the oil pan
  • Some sensors had to be replaced
  • The frame had to be pulled back straight
  • The passenger side of the vehicle had to be repaired and repainted due to scratches and minor dents from the chain link fence
  • The owner says that the “check engine” light is on and he will take off another $100 which is what it would cost to have the light turned off. He said he has already had it looked at and they just told him the computer needed to be re-set after the repairs and that the light was not an actual problem, and he has been driving it with no problems for two months. He shows you the diagnostic bill reflecting $100 to turn off “check engine light”.

Now That You Know The Details, Which Do You Want?

You have two choices: The black one from the dealer (which has a clean Carfax with it), or the one from the individual? Keep in mind, the individual nor the dealer will move any more on their price.

I would be willing to bet that the individual with the previously “wrecked” car will never be able to sell his car for as much as a car that was not in a wreck, and he would have to take off more than $100 to sell it. I personally would not purchase the vehicle if he didn’t at least take $1500 off the price. There are just too many unanswered questions regarding the repair and whether something would go wrong in the future.

Get it?

If you think you have a claim for diminished value in Texas or anywhere in the U.S. for that matter, give us a call at (214) 227-2154. We’ll tell you for free if you have a valid claim or not!

Posted in: Diminished Value