After being involved in an auto accident, expect your vehicle to no longer hold the same monetary value. Even after it’s repaired, that old value is lost for good. The difference between what the car was worth prior to the accident and what’s it’s worth once the repairs are made is known as car diminished value. Once that figure is established, how can you use it to your advantage? Here are a few ideas to consider.
Filing a Claim For Diminished Value
One of the more common reasons people have automobiles appraised is to determine how much of a loss was sustained as the result of an accident. Depending on the circumstances, you may be able to file a claim for diminished value with the insurance provider. While that does nothing to restore the car’s value, an approved claim will at least offset some of the loss.
Keep in mind you cannot file a claim for diminished value is you were the one who caused the accident. It’s also important to recognize that you won’t be able to recover all of the lost value. In most cases, you will only receive a percentage of the value that was lost.
Making Adjustments to Your Insurance Coverage
Your vehicle is now worth less than it was prior to the accident. Does it make sense to continue maintaining the same benefits as before? Depending on the kind of auto coverage you have, it may be in your best interests to talk with an agent about adjusting the value that’s used to calculate the scope of coverage and your premium.
When the loss in value is significant, the difference in the premiums may amount to a tidy sum over the course of a year. If the diminished value is relatively small, attempting to make adjustments may not result in much of a difference. Once you see the figures, you will know if this is worth the time and trouble.
Deciding How Much to Ask If You Want to Sell the Car
While the car is in proper running order again, some of its appeal was lost along with the decrease in value. You just don’t like the idea of driving it any longer. That means you can either use it for a trade-in or sell the car outright.
Knowing the car diminished value will help you set the sale price. It’s easy enough to determine the current market value for a vehicle of the same make, model, and engine mileage that has not been involved in an accident. You could take that figure, subtract the diminished value, and use the resulting amount as the initial asking price for the car.
Keep Driving the Car
Perhaps the diminished value doesn’t really bother you. That’s because the plan is to keep the care and continue driving it for several more years. The quality of the repairs leaves you with full confidence that it’s safe to operate.
In this scenario, it still helps to be aware of the diminished value for general purposes, including setting an amount used to assess any local taxes due. However, the change in value won’t affect your comfort level in regard to keeping and using the car.
Remember that even if you don’t have plans to file a diminished value claim, an appraisal by a certified professional can come in handy. Once the results are in hand, you can decide what happens next.