After an accident, you may be worried about your vehicle’s value. Those minor accidents can require bodywork and other repairs. When you bring your car in for a repair, it does not mean your vehicle’s value will drop. There are many factors to take into consideration regarding car value. Here are a few things you should know about repair work and car values.
Damage Can Lower Value
Most experts will tell you that a car with damage is worth less than the same vehicle without any damage. Some claim that the car loses as much as 33 percent of its value if it has required repair work after an accident. However, this figure does not take into consideration the mileage of the car, options installed in the vehicle, or other factors that can affect a vehicle’s value.
After an accident, your vehicle has experienced economic loss known as diminished value. If your car is damaged in an accident and gets repaired, it will have a damage history. In most cases, this history can lower your vehicle’s resale value. For many cars, the vehicle’s diminished value is due to aftermarket parts. However, even those cars repaired at a dealership will see some diminished value when they are fixed.
There are several ways that your car can sustain diminished value after a car accident. Immediate diminished value is the difference between your vehicle’s trade-in value before the accident and the resale value after the completed repairs. Inherent diminished value assumes that your car has been repaired to the original condition. However, this value takes into account that your vehicle has been in an accident. Inherent diminished value reduces the car’s worth when you try to resell it. Lastly, repair-related diminished value is the lost value that results from the quality of repairs. For example, if you used aftermarket parts or the paint color does not match, then the quality of the repair can cause a loss in the vehicle’s value.
Should I Worry About My Car’s Diminished Value?
After an accident, your vehicle will see a decrease in its value. When you list your car for sale after an accident, it will not have the same value as a brand new vehicle. Even when you repair your vehicle, you might not recover its full value. Any type of accident will lower the resale value when compared to those cars that were never involved in an accident. When your insurance pays to have the damage fixed, the accident will become part of the vehicle’s history report. Services like Carfax can access those reports, and that can lead to a lowering of your car’s value. These values will come into play when you are ready to trade-in or resell your vehicle. In some cases, an accident can knock off thousands of dollars from your original car value.
Unfortunately, the diminished value can affect your resale value. If you are selling a brand new car after an accident, your insurance company will repair it to its original condition. When you sell your vehicle, the new buyer or dealership often checks out your car’s history. In turn, they might not be willing to pay your asking price for the vehicle. Many buyers will not even consider buying a vehicle that was involved in an accident.
With diminished value, your vehicle has not only incurred physical damage, but it has suffered from a loss in value. This diminished value can affect your car on several levels. Now that you know your vehicle will lose value, you can be compensated for the overall loss of value by filing a diminished value insurance claim. This claim can help you recover the difference in the car’s value before your vehicle was in an accident. Depending on the circumstances, you cannot always file these claims, but you might want to look into these options. You will need to get your car professionally appraised so that you can make a claim for its lost value.
Can I Prevent Vehicle Depreciation After an Accident?
Cars will always lose value, even those that are not involved in an accident. The only way you can prevent severe depreciation is to avoid any accidents. You need to keep your car in good working order, perform proper maintenance, and be vigilant behind the wheel. However, even with the safest drivers, there is a chance that your vehicle could be involved in an accident. In those cases, you cannot prevent the damage to your car, but you can take a few steps to minimize the loss that can occur from these collisions.
Choose a Good Repair Shop
A good repair shop may be able to discreetly fix the damage so that even an experienced appraiser will not notice issues with your car. There are also methods for repairing vehicles today, like paintless dent repair, that allow technicians to repair your vehicle with no need for body filler or painting. These techniques mean that the repair may be virtually undetectable when you trade it.
However, it is important to note that almost every car has a vehicle report that may show it was involved in an accident. If your dealer uses one of these reports, they will discover any repairs to your car.
Think About a Dealer Trade-In
If you are trading your vehicle at a dealership, there are a few things you need to know. Any undamaged car with less than 30,000 miles will receive the highest offer from a dealer, especially if it has a look that buyers want at the time. The dealer can detail the car and place it on their own lot. Undamaged vehicles with 30,000 to 65,000 miles will receive a higher offer than a car with the same mileage and accident damage. However, if the damage is virtually undetectable, your car might be able to command a higher resale price.
Dealers often put these cars on their used lots, but they usually auction or wholesale them. Damage in vehicles with more than 65,000 miles may not impact the dealer’s asking price since they are going straight to auction or wholesale. In these cases, the more mileage you have on an older vehicle, the less likely damage from an accident will significantly impact the dealer’s trade-in price.
One way to avoid losing money due to damage is to sell the car by yourself. The person who purchases your vehicle may not mind that it is damaged. It is wise to inform the buyer of any car damage as vehicle reports are available online to anyone who wishes to purchase them. Any insurance claims or police reports will appear in the vehicle report. The report may even note any significant damage to the vehicle.
Insurance companies will use a precise formula to calculate your damaged car’s depreciated value. In most cases, the figure is usually the same for all insurance companies. However, if you are selling the vehicle, the depreciated value can become more subjective. The potential buyer might feel the car is worth more than its depreciated value. If they are looking for a specific vehicle, it may be worth more to them, even if it is damaged. On the other hand, they can use the damage history to negotiate your car’s price.
Need an Auto Body Shop Near Me?
While you cannot prevent a car’s value loss after an accident, there are a few things to do to help prevent a complete loss on your vehicle. Besides selling the car, you want to complete all the car’s necessary repairs. When your vehicle needs repairs after an accident, there is no need to worry. A good repair shop will do the work that can minimize the vehicle’s loss from an accident.
Elmer’s Auto Body can return your car to its original condition and get you back on the road. If the damage is relatively minor, we may be able to use paintless dent repair technology. Many of these repair techniques are virtually undetectable, and your vehicle will look good as new. Schedule an appointment today by calling the shop at (856) 218-0202.