Diminished value due to accident

[Jackyche]

I decided on the Roadster forum because I figured Roadster owners may have greater insight to the subject.

Someone backed into my Roadster (2nd time, different person) and broke my bumper. All damage limited to the bumper.

I want to claim diminished value with their insurance company because a)its now going to have accident under Carfax and b)Roadster is a rather rare car. Now, I've never claimed this sort of thing before so if anyone has done it before, I'd love to hear their experience (doesn't have to be with Roadster).

And what do you guys think is a fair diminished value from a minor accident? If you were buying a Ferrari and see "accident" in the carfax, that's got to turn you off right? Even if the owner will provide body shop documentation on bumper/paint work only, its still quite a turn off right?

Thanks.

Jack

 

[Lloyd]

If the repair was limited to the bumper, I find it difficult to find diminished value, but I'm not the insurance company.

 

[jbadger]

If the repair was limited to the bumper, I find it difficult to find diminished value, but I'm not the insurance company.

I agree, I had an accident and had to get a new front bumper. I would actually say my car is worth more now, because I upgraded the bumper to the 2.5. If you have the 1.x or 2.0 back bumper you may want to upgrade it to the 2.5.

 

[7racer]

I don't agree...I think it would easily have diminished value. Look what has already happened to the marketplace for the Roadster. Even if your car has been fixed at a Tesla authorized repair place, they won't buy it back for their CPO program. There was a post on this already on the forum.

There is one thing to remember when you declared diminished value, it is that the "value" or cost is less. This usually doesn't matter much but more for valuing your assets, selling etc..(you can't claim the car is worth X amount to sell later, it should technically be X-dimished value because that money was paid to you).

About the amount to declare...there isn't a set amount...and this is harder for the roadster. Usually what happens is the other person insurance company will look at similar cars that have had accidents and see what they sell for. So for example, a Toyota Camry would get into a fender bender and later sell at "X" amount. They will present that amount to the owner and then the haggling starts. So there will be a back and forth until the final diminished value is determined.

For the Roadster it's a lot harder as there isn't anything to gauge it against. So it can be really hard to determine.

I know because I was sideswiped at 1 month of ownership....

 

[wiztecy]

I agree with 7Racer, if there's any mention of an accident in CarFax you will have a diminished value plus the hagglers will be working you to get the roadster for nothing. Had the this happen with a car I was selling, car had a bumper accident that was claimed but was reported on the carfax and had trouble selling it. As soon as you post the VIN and its looked up you'll be filtered from those who're serious in buying a car whom look for a clean carfax report.

 

[Warrenbonz]

Someone backed into the rear quarter panel my parked corvette a few years ago . I received payment for diminished value from the insurance company. If I remember correctly, I needed to pay for a professional appraisal of the car and then argue with the insurance company. It was a bit of a pain but I did prevail after numerous phone calls etc. This was in Florida. It may work differently in different states. I would suggest finding an appraisor in your area that specializes in this type of claim and see what they advise. Sorry to hear about your Roadster being hit Jack. Good luck.

 

[Seven7]

Someone backed into the rear quarter panel my parked corvette a few years ago . I received payment for diminished value from the insurance company. If I remember correctly, I needed to pay for a professional appraisal of the car and then argue with the insurance company. It was a bit of a pain but I did prevail after numerous phone calls etc. This was in Florida. It may work differently in different states. I would suggest finding an appraisor in your area that specializes in this type of claim and see what they advise. Sorry to hear about your Roadster being hit Jack. Good luck.

This is what I'm starting to find out, it's just tough to get an appraisal on a thinly built car. ETA: when I say thinly built I mean no mass produced.

 

[bart513]

When I was looking into purchasing a CPO I was told by Tesla that any car that had even the most minor of accidents was priced lower by $7,000. There was a beautiful white Roadster that was hit by a bicycle and the owner declared it! Bump down $7K in the CPO asking price.

 

[jeremyz]

When I was looking into purchasing a CPO I was told by Tesla that any car that had even the most minor of accidents was priced lower by $7,000. There was a beautiful white Roadster that was hit by a bicycle and the owner declared it! Bump down $7K in the CPO asking price.

My girlfriend got rear-ended by an 80 year old woman who should not have had a driver's license (yes, she was driving a Buick); the insurance company immediately accepted fault. We asked about diminished value and the old woman's insurance company offered us some hilarious amount of money. We got 2 separate appraisals from dealership used car departments stating what the car would be worth without the damage and what it was worth with the damage. The insurance company didn't seem swayed by that. We ended up having to sue the old woman in small claims court. The insurance company hired an attorney to represent the old woman, as was their obligation. They gradually kept increasing their offers, but we just kept refusing. Right before the trial date, the insurance company gave us what the diminished value appraisals suggested to avoid a court case they knew they were going to lose. In the end, we got 6x the insurance company's original offer. Remember that the insurance company is in the business of collecting premiums and trying to not pay out claims. The other person's insurance company will probably not act in a reasonable way unless you hold their feet to the fire with a small claims lawsuit.

So, I think the appraisal for diminished value is extremely important. I would try to get at least 2 of them. I think that Kevin and Ryan from the CPO department are probably the most qualified people to do the appraisals.

 

[Doug_G]

Insurance companies will usually drag things out until the day before the court date, and then settle. Your strategy was the right one!

 

[7racer]

also remember that the "diminished value" carries with the car. You can not legally claim diminished value and get a check for say $7k then turn around and sell the car for the full price.
The diminished value will always carry with the car.

 

[Jackyche]

Ok, since I started the thread I might as well post my whole experience. This is a long one.

My car had a minor paint scratch accident back in January 2013. Other responsible party insurance paid for the bumper repaint.

Then in April or something rather, minor accident occurred again on the bumper and this time there's a crack on it. Other responsible party's insurance paid for new bumper. This had to occur first prior to making a diminished value claim per their insurance.

By the time repairs were all completed, we're now into July. And a diminished value claim was filed for the second accident with Progressive. Progressive said they won't cover diminished value for "second accident" so it had to be file with the first accident. Well, the first accident's responsible party was also Progressive and a claim was filed.

During the initial discussion, the Progressive rep basically laughed and offered $500 and indicated that if this was a Honda Accord, we wouldn't even be having this discussion since the repairs were less than $1500. Naturally I was upset.

I then had an appraisal done, by Autoloss.com and they valued the diminished value at approx $10,000. Now, a word of caution on Autoloss.com, in my opinion, they asked the necessary questions and performed adequately for an appraisal. You may or may not agree with the estimate, but at the very least, its an official/professional appraisal. A quick search on the internet on Autoloss.com will show up with NUMEROUS amounts of ripoff reports. However, they provide you with something in writing for you to argue with the insurance company with. They never claimed that they would represent you in your negotiations. Even if you use an attorney, they would want an appraisal anyways.

Armed with this "report", and after quite a few emails, the negotiations settled on a diminished value of $2500. However, I'm so upset at Progressive that I haven't decided to sign the offer or to use an attorney and go after the whole $10,000.

You do not need to sell the car to have a diminished value claim. The value of your car diminished as soon as an accident occurred and certainly now that its on carfax report. You lose potential buyers who are looking for "clean carfax" and you certainly will come across the term, "accident" when negotiating on your sell price.

 

[hcsharp]

also remember that the "diminished value" carries with the car. You can not legally claim diminished value and get a check for say $7k then turn around and sell the car for the full price.
The diminished value will always carry with the car.

There is no legal limitation on what you can sell a car for, whether you've already been paid for diminished value or not. I think what you mean is it doesn't matter when you sell it, the buyer is likely to know it was in an accident and will be in a position to negotiate a lower price.

 

[7racer]

I think there is a "legal" amount that you can claim. That is for accounting purposes and for taxes in which case the legality would come into play. I guess the correct wording is that the basis of the value of the car goes down by that diminished value amount. Hence any taxes for sale, claim on price for the sale is the basis less the diminished value.

This was an exact scenario that was giving in a CFP class I was taking.

 

[brianman]

There is no legal limitation on what you can sell a car for, whether you've already been paid for diminished value or not. I think what you mean is it doesn't matter when you sell it, the buyer is likely to know it was in an accident and will be in a position to negotiate a lower price.

And, regardless of the potential buyer's research resources and/or skills, you should be upfront on the such important aspects with him/her.

 

[jeremyz]

Jackyche, I think you would do better for yourself if you contacted an attorney or filed suit(s) in small claims court. You could file suits against both at fault drivers for diminished value. Each event reduced the value of your car. A car with 2 accidents on its carfax is certainly going to be worth less, even if they are minor accidents. It doesn't matter what Progressive says about only the first diminished value claim mattering. Progressive will have to provide an attorney for both of their insured clients if you file suits against both of them. If you don't hold the insurance company's feet to the fire, they will not give you a fair amount of money.

On a related tangent, a co-worker of mine bought a used 911 GT3. He got a really good deal on it because when the car was new, it was involved in a very low speed accident inside the Porsche dealership. The small bump required that the bumper be re-painted. This caused it to show up as having an accident on its carfax and the dealer had to disclose this. The car sat around at the dealer for several years before the original owner bought it. Most people don't want to spend $100k+ on a new car that has been in an accident. In the end, my friend probably saved more than $20k on the car because it was in a 2mph "accident".