Are you joking? YES!
Seriously, I sometimes get the feeling that some people just don’t understand how life works, and that causes them difficulty in discerning ordinarily easy facts to observe. Our mission statement at the office is “We are here to prove that paying attention to details and doing the right thing is the key to success in business and in life.” I understand that we can always argue semantics about what is the right thing, but this article should at least demonstrate some of how I think as well as shed some light on how to determine whether an older vehicle has any lost value due to a collision and repair that is worth pursuing.
I assume if you found my blog, you don’t need a definition of inherent lost market value, so, let’s take an older car example and go with it. . .
#1 EXAMPLE VEHICLE / DAMAGE: 2002 Cadillac Escalade, 85000 miles, struck in the rear, sustains $4500.00 damages
This is an eleven (11) year old vehicle.
Even now, with used car sales and owner retention time up, the vehicle is past it’s useful life in almost all accounting and tax scenarios. Nevertheless, this vehicle is still worth about $14000.00 at retail due to the mileage, and assuming it is in excellent condition. A vehicle like the example vehicle will definitely suffer diminished value due to collision and repair, especially if it had a clean accident history prior to the collision. In the example, we would figure the inherent lost market value after repairs to be between $1800.00 and $2400.00 depending on exactly which components were damaged and repaired.
#2 EXAMPLE VEHICLE / DAMAGE: 1995 Honda Accord EX V6, 120000, struck in right front with $2800.00 in damages.
This is an eighteen (18) year old vehicle.
The Honda Accord EX with the V6 and this low of miles is hard to find. I found a few on an internet search, but didn’t really check them out hard. At the time of this writing, the going price for one of the example vehicles was around $4500.00. So, this could go either way. The vehicle should probably be totaled, but they are such good vehicles, the owner probably wanted it repaired, but now the repaired vehicle is worth $3K tops. So. . . any DV there?
CONCLUSION
I contend that there is a small amount of lost value even on an 18 year old Honda Accord if the conditions are right. Can you recover it? Probably not without a big fight and an expert to research, document, report on, and explain the market. And even then, some insurance companies will simply refuse to acknowledge your loss until you force your hand in court, and they know that unless you also have an injury to pursue, you won’t likely be able to find an attorney for a diminished value case that is worth less than about $5000.00. If you’re out to prove a point, you
can find some good experts who will show you how to do it yourself (hint, hint), and then you can get your money via small claims court. Even with help you’ll have to be resilient and confident so you don’t get “lawyered”. Old or not, regarding the diminished value of a vehicle, it is simply the change in value after the repair that matters not the age. The concept applies to many things in life, and stated plainly; a vehicle’s age alone does not negate it’s value.