Fleet Or Rental Cars And Diminished Value – Is It Real?
Yes and no.
Rental cars can have diminished value, but the diminished value must be documented properly. The majority of demands for diminished value on rental cars I received were very poorly documented. In fact, most had no supporting documentation at all. They would simply state that we owed such and such amount for diminished value. I never paid a rental company for diminished value on their vehicle if they did not provide evidence that the vehicle sustained it.
Using The Law Of Numbers
The reason the rental company makes such a poor demand is that some insurance companies will simply pay it, especially if it is a low amount, like $250 or so. Some of the larger rental companies use this tactic in hopes of getting an easy partial reimbursement without a fight. They simply ask for diminished value, and if it is paid, then they get at least some money without having to invest any time or money into researching diminished value. What most rental companies fail to do is to actually fight for diminished value if their demand is rejected. Sure, the diminished value on a rental vehicle that has been wrecked is normally less than the it would be on a non-rental vehicle that has been wrecked, but the actual amount is likely to be much more than the boilerplate $250 demand that rental companies make.
Here is the evidence against rental diminished value…
- Consumers looking to buy a used vehicle generally view a prior rental vehicle as a vehicle that has been “ragged out”.
- Rental vehicles are not generally specialty or collector vehicles, so their demand is a general one.
- Rental vehicles normally have high mileage for their year model which decreases the average value within the same class of non-rental vehicles.
Here is some evidence for rental diminished value (inherent)…
- Rental vehicles normally have very accurate maintenance records.
- Rental cars are detailed on a regular basis, and are normally very clean.
- Major damages to rental cars are almost always repaired professionally at certified body shops.
- Rental vehicles are almost always sold at dealer auctions where buyers are especially knowledgeable about evidence of collision repairs.
Diminished value on a rental car is not a scam, it is real.
The way many rental companies demand it is a scam. Rental companies could decrease their losses if they spent a little money obtaining expert reports on diminished value.
If you are an individual, be sure to read your rental contract closely. You do not want an unsubstantiated diminished value charge showing up on your credit card bill. If you are rental car company, do the research on diminished value, it may be that you are owed more than you think, and obtaining an expert report could keep your losses to a minimum.
Sometimes, it’s just in the petty details!
Posted in: Diminished Value