Diminished Vehicle Value: A Simple Case of Supply and Demand
One of the basic reasons for the diminishing value of a vehicle after an accident is simple supply and demand. Results from a survey we conducted in 2009 of more than 4,700 respondents found that 60 percent of them would not even buy a vehicle that had frame damage. Even with a vehicle that did not sustain frame damage and had been correctly repaired, about 20 percent of respondents would expect a 40 percent reduction in the price.
When you have such a significant number of consumers completely out of the buying mix, demand is so low that you can’t help but see a major drop in value. In the auto buying world, perception is as good as reality. If people think your vehicle is worth 40 to 60 percent less than you are asking, it’s nearly impossible to fight that battle.
What Can You Do About It? First, don’t think you are helpless! The insurance company will not go out of their way to offer you what you deserve. In fact, they will likely present you with an estimate based on an extremely conservative formula that clearly favors their interest. If you are unaware of your rights, this presentation may very well come across as reasonable and convincing. You don’t have to simply settle for their offer. When you provide the insurance company with a professionally prepared diminished value report from Auto Loss, they will know you mean business and have the backing of the clear and detailed data that we provide in our reports. No one plans for an auto accident. So, if someone you know is unaware of their right to a diminished value claim, don’t wait for an accident to happen. Spread the word, so they will know if and when the time comes. Knowledge is power!