Diminished Value?
09-06-2013, 08:47 AM
#1
Cruising
Thread Starter
Diminished Value?
Fellow Vette heads, posting for a friend, no really. My buddy has a 2008 Z06 with 11.6K miles that was hit while sitting in his driveway no less. The repairs are in the $18-$20k range and done with all GM at the dealership. The offenders insurance Co. is offering 10% of NADA ($47,125) as a diminished value comp. From what I've read here, most buyers will avoid a "repaired" car since the market is flush with low mile unmolested Vettes. The dealership indicated that as a trade in, it would likely go to auction and that in his opinion, the DV comp should be more like 20%.
Any help, insight or similar experience would be most appreciated.
Any help, insight or similar experience would be most appreciated.
09-06-2013, 09:34 AM
#2
Melting Slicks
I agree with that assessment, but your friend may have to DOCUMENT the loss before the insurance company will take him seriously.
He will need to have a post-repair appraisal done (or multiple appraisals) documenting the car's value before and after the repair. With the repairs approaching 50% of the car's value, he will have a hard time selling that car to any knowledgeable buyer. And if it ends up with a negative Carfax, no dealer will want to take the car in as a trade without significantly discounting its value.
He will need to have a post-repair appraisal done (or multiple appraisals) documenting the car's value before and after the repair. With the repairs approaching 50% of the car's value, he will have a hard time selling that car to any knowledgeable buyer. And if it ends up with a negative Carfax, no dealer will want to take the car in as a trade without significantly discounting its value.
09-06-2013, 03:39 PM
#4
Melting Slicks
Yup, we went through this when my wife was in our SUV and hit by a guy on his cellphone while she was stopped at a red light 2 years ago.
Ours was a 2008, had over $10k in damages, including damage to the unibody. We had to hire a private apprasier, who's name we got from the bodyshop, to document the damages and diminished value. It cost us around $130.00, but we got back around $4000, and the vehicle, which was $40k new, was only valued around $25k because we had high mileage. So we got back a good bit more than 10% but less than 20%. I did negotiate with the guy from the insurance company directly, so no reason to accept that first 10% offer.
But the bottom line is it sucks but your friend will never be whole. Our accident is on CarFax, and although our vehicle was repaired beautifully and drives great it will never be worth what it should have been on a sale or trade, and the diminished value money will never cover all of that loss. But its still worth it . . . something is better than nothing.
Craig
Ours was a 2008, had over $10k in damages, including damage to the unibody. We had to hire a private apprasier, who's name we got from the bodyshop, to document the damages and diminished value. It cost us around $130.00, but we got back around $4000, and the vehicle, which was $40k new, was only valued around $25k because we had high mileage. So we got back a good bit more than 10% but less than 20%. I did negotiate with the guy from the insurance company directly, so no reason to accept that first 10% offer.
But the bottom line is it sucks but your friend will never be whole. Our accident is on CarFax, and although our vehicle was repaired beautifully and drives great it will never be worth what it should have been on a sale or trade, and the diminished value money will never cover all of that loss. But its still worth it . . . something is better than nothing.
Craig
09-06-2013, 09:24 PM
#5
I asked my dealer (Joe of "Joe Knows Corvettes") if he could email me a statement of his evaluation of the amount of loss. He did so (thanks Joe!) and I passed it to the insurance company (and I told them that as he was probably the most experienced buyer and seller of corvettes in the state, he was therefore the most qualified person in the state to evaluate real-world DV). They apparently had someone on their end also do an "evaluation" (their guy never looked at the car, just looked over the repair paperwork) but their guy concurred that there was diminished value. Joe put the loss at $4k, the insurance company offered $3k. I didn't think I'd be able to get them to budge without spending large amounts of time and money, so I took the offer, happy to keep things easy.
Talking to the rep (after the offer had been made) he explained that they don't consider DV to be a real thing (and I'll grant them that for many cars it isn't, but for these cars it is real). My impression was that they wouldn't be making any offer at all if it wasn't for DV being written into state law. So where you are is probably a factor in getting the loss covered.
Talking to the rep (after the offer had been made) he explained that they don't consider DV to be a real thing (and I'll grant them that for many cars it isn't, but for these cars it is real). My impression was that they wouldn't be making any offer at all if it wasn't for DV being written into state law. So where you are is probably a factor in getting the loss covered.
Last edited by Harlequin; 09-06-2013 at 09:28 PM.
09-07-2013, 03:36 AM
#6
Race Director
I filed a 3rd party DV claim using a company that specializes in this, AutoLoss.
I settled for about half the price of the repair, but was seeking 20%+. Several other appraisers recommended settling this way.
The at-fault's insurance company's agent tried to dismiss the whole concept of DV but the documentation and dealer testimony put a quick stop to that BS.
I settled for about half the price of the repair, but was seeking 20%+. Several other appraisers recommended settling this way.
The at-fault's insurance company's agent tried to dismiss the whole concept of DV but the documentation and dealer testimony put a quick stop to that BS.
09-07-2013, 06:08 AM
#7
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Diminished Value
Fellow Vette heads, posting for a friend, no really. My buddy has a 2008 Z06 with 11.6K miles that was hit while sitting in his driveway no less. The repairs are in the $18-$20k range and done with all GM at the dealership. The offenders insurance Co. is offering 10% of NADA ($47,125) as a diminished value comp. From what I've read here, most buyers will avoid a "repaired" car since the market is flush with low mile unmolested Vettes. The dealership indicated that as a trade in, it would likely go to auction and that in his opinion, the DV comp should be more like 20%.
Any help, insight or similar experience would be most appreciated.
Any help, insight or similar experience would be most appreciated.
The automobile diminished value report you receive from St. Lucie Appraisal is based entirely on the opinions of used car managers at automobile dealerships. Was your Honda wrecked and repaired? Our report provides six quotes from Honda dealerships that specifically address your actual vehicle and the exact amount and severity of damage that was repaired. When people trade their cars in, those are the guys who buy them so their opinions are valid. Other appraisal companies providing diminished value reports may use formulas such as the inappropriate (as ruled by The Georgia Supreme Court) Rule 17-C or collect data from auto auctions to formulate their figures. I'm not guaranteeing success if you march into court with this type of appraisal. Insurers can successfully argue that they do not address your specific car or the damages it incurred.
The Georgia Supreme Court's ruling on the inequity of Rule 17-C laid the foundation for fair automobile diminished value settlements in all 50 states. Formulas such as State Farm's Rule 17-C severely shortchanged vehicle owners and, in doing so, provided themselves and other insurers using formulas to determine diminished value with unjust enrichment.
Subsequent to your accident, the adjuster from the responsible driver's insurance company will offer you a settlement for diminished value. If you ask them how they came up with the figure they will either point to a formula, a "certified" appraiser's report or simply refuse to explain their process altogether. I have seen the diminished value reports prepared by independent appraisers hired by insurers and they are a joke. They contain no reasonable facts to back up their assumptions. Most of them are not licensed in any state. Note that "certified" appraisers belong to pay-to-be-certified organizations, not unlike the Better Business Bureau and should not be confused with "licensed" appraisers. A number of insurance company attorneys have contacted St. Lucie Appraisal in the past to inquire about hiring us. Once they learned about our process of using dealer quotes, however, their interest faded quickly as they realized that our reports would result in higher (translation: fair) diminished value settlements. In front of a magistrate or mediator, these types of reports provide actual evidence of how much less your car is worth in the real world. Appraisals based on formulas or auction results can not compare. And insurance company diminished value estimates made up out of thin air (yes, they do exist) will certainly be looked upon as unfair at best and possibly fraudulent in the eyes of a judge.
Face it, even your own insurance agent or broker hasn't informed you of your right to collect diminished value from the insurer of the responsible driver. Regardless of the fact that the settlement isn't even costing your own insurer a dime, agents are mum on the subject altogether. Automobile diminished value is the newest thorn in the insurance companies' side. Their mission is to keep it a secret and their hope is that it will go away.
09-07-2013, 07:26 AM
#8
Le Mans Master
To understand the insurance industry's reluctance to accept "Diminished Value", one must grasp the concept of insurance in the first place.
Insurance is designed to make a person "Whole", to place him/her in the financial position they were, prior to the "Loss". Unfortunately, many people, after suffering a loss in which there was no liability on their part, attempt to make a profit on their loss. This is referred to as "Unjust Enrichment".
Sometimes, unjust enrichment is found in demanding repairs that are not specific to the loss. Sometimes, it's not paying a deductible, or simply being paid an amount, that is sufficient to have the vehicle fully, and properly repaired, with a little "bonus" money left over, for a new TV.
How many times have you heard some one tell you how smart they were by getting all the money they were entitled too, and "x" amount of dollars left over? They have a big grin on their face, and think they were very sharp. What they never realize is, they committed insurance fraud, by virtue of the fact that they made a profit on their loss.
Enter the newest opportunity, "Diminished Value". On the face of it, DV is a good thing. And, it's a perfectly legitimate form of actual loss, for which compensation is justified.
We are all aware of the fact, that a vehicle, any vehicle, that is professionally, and properly repaired, has not lost it's value simply because repairs were required. If the repairs are perfect, and the car runs, and looks perfectly, there is no additional DV loss. Today, modern technology allows us to have knowledge of a repair having taken place, before we buy that repaired vehicle, and that's a good thing.
However, what that previous accident report never tells us, is how well those repairs were made. Were those repairs made unprofessionally, and poorly? If so, DV might reasonably be 40% of the fair market value in this case. Were the repairs made reasonably well, but still left something to be desired? If so, perhaps 15% DV would be reasonable here. Were the repairs made perfectly, and flawlessly, so that they were undetectable? If so, there would be no compensation required for DV, because there should be no loss of value what-so-ever.
The problem now being faced by the insurance industry is simply, how much is fair? Fair, when it comes to DV is all a matter of opinion, and there are plenty of opinions to go around.
Car dealer's opinions, repairer's opinions, appraiser's opinions, auction's opinions, salvage seller's opinions, as well as the buyer's opinions of the average Joe Public.
Of course, everyone believes their opinions are fair, and unbiased, and are representative of the proper compensation value. Common sense dictates that's not possible. So, the insurance companies when forced to enter this area called Diminished Value, are hesitant, and very cautious. They'll offer the lowest amount they feel the vehicle owner will accept.
I wish there was an accurate, fair, industry standard, that could be applied to every case, to establish if DV is actually a factor in a settlement. And, if it is deemed to be a factor, an accurate, fair payment rendered. Unfortunately, that does not exist, so these discussions over the nebulous specter of "Diminished Value", will continue.
09-07-2013, 08:01 AM
#9
Le Mans Master
To be fair, here is the opposing perspective, regarding diminished value.
To understand the insurance industry's reluctance to accept "Diminished Value", one must grasp the concept of insurance in the first place.
Insurance is designed to make a person "Whole", to place him/her in the financial position they were, prior to the "Loss". Unfortunately, many people, after suffering a loss in which there was no liability on their part, attempt to make a profit on their loss. This is referred to as "Unjust Enrichment".
Sometimes, unjust enrichment is found in demanding repairs that are not specific to the loss. Sometimes, it's not paying a deductible, or simply being paid an amount, that is sufficient to have the vehicle fully, and properly repaired, with a little "bonus" money left over, for a new TV.
How many times have you heard some one tell you how smart they were by getting all the money they were entitled too, and "x" amount of dollars left over? They have a big grin on their face, and think they were very sharp. What they never realize is, they committed insurance fraud, by virtue of the fact that they made a profit on their loss.
Enter the newest opportunity, "Diminished Value". On the face of it, DV is a good thing. And, it's a perfectly legitimate form of actual loss, for which compensation is justified.
We are all aware of the fact, that a vehicle, any vehicle, that is professionally, and properly repaired, has not lost it's value simply because repairs were required. If the repairs are perfect, and the car runs, and looks perfectly, there is no additional DV loss. Today, modern technology allows us to have knowledge of a repair having taken place, before we buy that repaired vehicle, and that's a good thing.
However, what that previous accident report never tells us, is how well those repairs were made. Were those repairs made unprofessionally, and poorly? If so, DV might reasonably be 40% of the fair market value in this case. Were the repairs made reasonably well, but still left something to be desired? If so, perhaps 15% DV would be reasonable here. Were the repairs made perfectly, and flawlessly, so that they were undetectable? If so, there would be no compensation required for DV, because there should be no loss of value what-so-ever.
The problem now being faced by the insurance industry is simply, how much is fair? Fair, when it comes to DV is all a matter of opinion, and there are plenty of opinions to go around.
Car dealer's opinions, repairer's opinions, appraiser's opinions, auction's opinions, salvage seller's opinions, as well as the buyer's opinions of the average Joe Public.
Of course, everyone believes their opinions are fair, and unbiased, and are representative of the proper compensation value. Common sense dictates that's not possible. So, the insurance companies when forced to enter this area called Diminished Value, are hesitant, and very cautious. They'll offer the lowest amount they feel the vehicle owner will accept.
I wish there was an accurate, fair, industry standard, that could be applied to every case, to establish if DV is actually a factor in a settlement. And, if it is deemed to be a factor, an accurate, fair payment rendered. Unfortunately, that does not exist, so these discussions over the nebulous specter of "Diminished Value", will continue.
To understand the insurance industry's reluctance to accept "Diminished Value", one must grasp the concept of insurance in the first place.
Insurance is designed to make a person "Whole", to place him/her in the financial position they were, prior to the "Loss". Unfortunately, many people, after suffering a loss in which there was no liability on their part, attempt to make a profit on their loss. This is referred to as "Unjust Enrichment".
Sometimes, unjust enrichment is found in demanding repairs that are not specific to the loss. Sometimes, it's not paying a deductible, or simply being paid an amount, that is sufficient to have the vehicle fully, and properly repaired, with a little "bonus" money left over, for a new TV.
How many times have you heard some one tell you how smart they were by getting all the money they were entitled too, and "x" amount of dollars left over? They have a big grin on their face, and think they were very sharp. What they never realize is, they committed insurance fraud, by virtue of the fact that they made a profit on their loss.
Enter the newest opportunity, "Diminished Value". On the face of it, DV is a good thing. And, it's a perfectly legitimate form of actual loss, for which compensation is justified.
We are all aware of the fact, that a vehicle, any vehicle, that is professionally, and properly repaired, has not lost it's value simply because repairs were required. If the repairs are perfect, and the car runs, and looks perfectly, there is no additional DV loss. Today, modern technology allows us to have knowledge of a repair having taken place, before we buy that repaired vehicle, and that's a good thing.
However, what that previous accident report never tells us, is how well those repairs were made. Were those repairs made unprofessionally, and poorly? If so, DV might reasonably be 40% of the fair market value in this case. Were the repairs made reasonably well, but still left something to be desired? If so, perhaps 15% DV would be reasonable here. Were the repairs made perfectly, and flawlessly, so that they were undetectable? If so, there would be no compensation required for DV, because there should be no loss of value what-so-ever.
The problem now being faced by the insurance industry is simply, how much is fair? Fair, when it comes to DV is all a matter of opinion, and there are plenty of opinions to go around.
Car dealer's opinions, repairer's opinions, appraiser's opinions, auction's opinions, salvage seller's opinions, as well as the buyer's opinions of the average Joe Public.
Of course, everyone believes their opinions are fair, and unbiased, and are representative of the proper compensation value. Common sense dictates that's not possible. So, the insurance companies when forced to enter this area called Diminished Value, are hesitant, and very cautious. They'll offer the lowest amount they feel the vehicle owner will accept.
I wish there was an accurate, fair, industry standard, that could be applied to every case, to establish if DV is actually a factor in a settlement. And, if it is deemed to be a factor, an accurate, fair payment rendered. Unfortunately, that does not exist, so these discussions over the nebulous specter of "Diminished Value", will continue.
Yeah I've been a victim like people say no one wants a wreck. So much for the insurance industry.
z51vett
Doug
09-07-2013, 08:11 AM
#10
Le Mans Master
To answer you how about loss of 4000 grand on trade value after repair, was traded in got 800 for dv that sucks. Wife was hit by someone and we trade for non wrecked car as soon as it came out of the body shop.
Yeah I've been a victim like people say no one wants a wreck. So much for the insurance industry.
z51vett
Doug
Yeah I've been a victim like people say no one wants a wreck. So much for the insurance industry.
z51vett
Doug
You needed to post an insurance bashing statement. Hope you feel better now.
However, it's obvious you have not read, or comprehended, what I said.
09-07-2013, 08:12 AM
#11
Cruising
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Diminished Value
Were those repairs made unprofessionally, and poorly? If so, DV might reasonably be 40% of the fair market value in this case. Were the repairs made reasonably well, but still left something to be desired? If so, perhaps 15% DV would be reasonable here. Were the repairs made perfectly, and flawlessly, so that they were undetectable? If so, there would be no compensation required for DV, because there should be no loss of value what-so-ever..
After you do that, please post your findings.
We perform numerous diminished value appraisals every day. Unlike virtually every other appraisal company that does DV appraising, we base our figures on dealer quotes such as I have described. That means we talk to used car managers every day about every type of car from Bentley to Hyundai that have been repaired for everything from small dents to severe impacts. Not one in a hundred used car managers tell us that they will pay the same amount for a car with a dirty Carfax.
09-07-2013, 08:42 AM
#12
Le Mans Master
Two things in response to your post. One, I should have specified that my post referred to what is known as "inherent diminished value" which means that the car is worth less simply by virtue of the fact that it underwent repairs at all. What a poor body work job is referred to is "repair-related diminished value" which is something different altogether. Two, your assertion that perfect repairs = no diminished value is wrong and all you need to do to confirm that is call ANY used car manager at ANY dealership and ask him if he'd pay the same amount in trade for that perfectly repaired car as he would for a virgin.
After you do that, please post your findings.
We perform numerous diminished value appraisals every day. Unlike virtually every other appraisal company that does DV appraising, we base our figures on dealer quotes such as I have described. That means we talk to used car managers every day about every type of car from Bentley to Hyundai that have been repaired for everything from small dents to severe impacts. Not one in a hundred used car managers tell us that they will pay the same amount for a car with a dirty Carfax.
After you do that, please post your findings.
We perform numerous diminished value appraisals every day. Unlike virtually every other appraisal company that does DV appraising, we base our figures on dealer quotes such as I have described. That means we talk to used car managers every day about every type of car from Bentley to Hyundai that have been repaired for everything from small dents to severe impacts. Not one in a hundred used car managers tell us that they will pay the same amount for a car with a dirty Carfax.
I understand your zeal in defending your position. It's in your best interest, because this is how you make your living.
Having said that, I would also say that you make a number of salient points, with which, I am not in disagreement.
Perhaps I can better explain my position this way. Before Carfax, a vehicle that was properly, perfectly, and professionally repaired, lost no value. No one knew it was repaired, and there was no diminished value, and rightly so. A vehicle does not, and should not lose value, simply by virtue of the fact that it was repaired.
The concept of an "inherent loss of value", has been artificially brought about by the fact that we now know the car was repaired, and for no other reason, period. It is this concept with which I, as well as most in the insurance industry disagrees.
There is no argument that diminished value has a valid place in the settlement process. Again, I am speaking of "Repair Related Diminished Value", I stated that clearly in my original statement.
Where we disagree, is the demand for insurance money, simply because the car was repaired, and for no other reason. Hopefully an appellate court decision will at some point spell that out clearly and concisely. Until then, this debacle will continue.
09-07-2013, 09:12 AM
#13
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Diminished Value
Again, I will provide two responses. One, there IS a reason and here's the formula: Consumers won't pay as much for a previously repaired car hence dealerships can't pay as much for your trade-in. It's simply a domino effect and the wording of insurance policies places the insurance companies in the position of being responsible for that loss of value. Carfax just represents progress in reporting. It is a consumer protection vehicle that benefits car buyers. Prior to Carfax people were getting burned left and right buying lemons. Two, Georgia's Supreme Court set a precedent with it's decision in Mabry V. State Farm in which they ruled that inherent diminished value is a valid type of loss that insurers are obligated to pay. Don't lose sight of the fact that, if you caused the accident, the owner of the other vehicle is actually suing you. Your insurance policy is what indemnifies you against having to pay that loss. I can foresee a day, especially if insurance companies keep refusing to pay fair settlements for diminished value, when car owners will just skip the claim process altogether and bring actions against the negligent drivers.
09-07-2013, 10:48 AM
#14
Le Mans Master
You keep saying that there is inherent diminished value by virtue of the fact that the car was repaired, period.
I don't disagree, where we disagree, is my firm belief that there should not be DV for this reason alone. Inherent DV was fabricated, by virtue of the CarFax reports, and the public's ignorance when it comes to proper vs. improper vehicular repairs, as well as the public's demands for protection, rather than take the responsibility to protect themselves.
There is an old Latin saying, "Caveat Emptor", which means, "let the buyer beware". If a person has a vehicle thoroughly examined before purchase, he/she, will know if there is any diminished value, and then decide how much they're willing to pay for the car. It's that simple.
However, today "Diminished Value", has turned into a business to protect people from their own inability to use some common sense when making a purchase.
We could go round, and round on this for days, and get no where. I do however respect the professional way in which you approached our disagreement. Let's just agree to disagree.
09-07-2013, 11:34 AM
#16
Racer
It's impossible to "skip the claim process altogether", because that's the purpose of the contract in the first place. There are many times in which a plaintiff will bring a civil action against an individual defendant, who will simply turn the summons over to his/her insurance company, and the judge will insist that the 2 parties get together and resolve the issue.
You keep saying that there is inherent diminished value by virtue of the fact that the car was repaired, period.
I don't disagree, where we disagree, is my firm belief that there should not be DV for this reason alone. Inherent DV was fabricated, by virtue of the CarFax reports, and the public's ignorance when it comes to proper vs. improper vehicular repairs, as well as the public's demands for protection, rather than take the responsibility to protect themselves.
There is an old Latin saying, "Caveat Emptor", which means, "let the buyer beware". If a person has a vehicle thoroughly examined before purchase, he/she, will know if there is any diminished value, and then decide how much they're willing to pay for the car. It's that simple.
However, today "Diminished Value", has turned into a business to protect people from their own inability to use some common sense when making a purchase.
We could go round, and round on this for days, and get no where. I do however respect the professional way in which you approached our disagreement. Let's just agree to disagree.
You keep saying that there is inherent diminished value by virtue of the fact that the car was repaired, period.
I don't disagree, where we disagree, is my firm belief that there should not be DV for this reason alone. Inherent DV was fabricated, by virtue of the CarFax reports, and the public's ignorance when it comes to proper vs. improper vehicular repairs, as well as the public's demands for protection, rather than take the responsibility to protect themselves.
There is an old Latin saying, "Caveat Emptor", which means, "let the buyer beware". If a person has a vehicle thoroughly examined before purchase, he/she, will know if there is any diminished value, and then decide how much they're willing to pay for the car. It's that simple.
However, today "Diminished Value", has turned into a business to protect people from their own inability to use some common sense when making a purchase.
We could go round, and round on this for days, and get no where. I do however respect the professional way in which you approached our disagreement. Let's just agree to disagree.
09-07-2013, 12:09 PM
#17
Instructor
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csf
That guy that hit your wife`s SUV with his cellphone and caused $10 grand damage, that must be one hell of a big cell phone. Do you know where I can get one? Bat Pig out.
09-07-2013, 12:22 PM
#19
Le Mans Master
Hameister let me get this straight, if you personally were looking at 2identical 09 Z06's, same miles, same cosmetic condition, same price and you pulled a Carfax and 1 of them had been in a major accident and had been fixed by a reputable GM dealer you would be willing to take the repaired car for the same money?
However, let's take a realistic scenario.
Two 2008 'vettes, both with identical pkgs., features, identical color, and appear to be in similar cosmetic condition which we'll describe as excellent. Both are bone stock. Neither car was abused, or raced.
Here are the differences. One of them was a garage queen, only driven on weekends, and clocked only 19,000 miles. It's a one owner vehicle, with all maintenance records available, and was clearly well maintained. The owner just recently purchased a brand new set of Bridgestone Pole Position tires. However, a CarFax report shows that this vehicle was popped in the butt 3 years ago, and was repaired for $4,000. I check on where the repairs were made, and have my own expert thoroughly inspect the car. Everything is on specs, and an excellent repair was made having no detrimental effects on this car.
The other 'vette was a daily driver, that has seen 3 different owners, and has clocked 47,000 miles. Because of multiple owners, there are no verifiable maintenance records available. The car looks very sharp, and the tires are in very good shape with only 3/32 of wear. There is no record of this vehicle having ever been involved in an accident, or having undergone any repairs.
Both owners are asking the same price for their vehicle. I am attracted to the 'vette with less mileage, and new tires, and excellent maintenance records. However, it's got that nasty CarFax report, what do I do? Simple, I buy the car with the previous repair, and I pay the same price. Why? Because I am getting a lower mileage, vehicle with new tires, and maintenance records, and most importantly, I've already verified that the repairs were excellent, and did not degrade the car in any way.
In my opinion, there is no inherent diminished value, simply because it was damaged. At the same price, it's still a better deal than the one with the clean CarFax report.
There is no question that many folks would walk away from the better buy because it was damaged, and that scares the heck out of them. That's ok, it leaves more options for folks like me.
Last edited by Hameister; 09-07-2013 at 12:27 PM.
09-07-2013, 12:44 PM
#20
Racer
You're presenting a hypothetical that will never exist. No two cars are ever identical. There are always features, color, mileage, tire condition, optional pkgs., wheels, ownership information, etc., that will cause me to opt for one car over the other, always.
However, let's take a realistic scenario.
Two 2008 'vettes, both with identical pkgs., features, identical color, and appear to be in similar cosmetic condition which we'll describe as excellent. Both are bone stock. Neither car was abused, or raced.
Here are the differences. One of them was a garage queen, only driven on weekends, and clocked only 19,000 miles. It's a one owner vehicle, with all maintenance records available, and was clearly well maintained. The owner just recently purchased a brand new set of Bridgestone Pole Position tires. However, a CarFax report shows that this vehicle was popped in the butt 3 years ago, and was repaired for $4,000. I check on where the repairs were made, and have my own expert thoroughly inspect the car. Everything is on specs, and an excellent repair was made having no detrimental effects on this car.
The other 'vette was a daily driver, that has seen 3 different owners, and has clocked 47,000 miles. Because of multiple owners, there are no verifiable maintenance records available. The car looks very sharp, and the tires are in very good shape with only 3/32 of wear. There is no record of this vehicle having ever been involved in an accident, or having undergone any repairs.
Both owners are asking the same price for their vehicle. I am attracted to the 'vette with less mileage, and new tires, and excellent maintenance records. However, it's got that nasty CarFax report, what do I do? Simple, I buy the car with the previous repair, and I pay the same price. Why? Because I am getting a lower mileage, vehicle with new tires, and maintenance records, and most importantly, I've already verified that the repairs were excellent, and did not degrade the car in any way.
In my opinion, there is no inherent diminished value, simply because it was damaged. At the same price, it's still a better deal than the one with the clean CarFax report.
There is no question that many folks would walk away from the better buy because it was damaged, and that scares the heck out of them. That's ok, it leaves more options for folks like me.
However, let's take a realistic scenario.
Two 2008 'vettes, both with identical pkgs., features, identical color, and appear to be in similar cosmetic condition which we'll describe as excellent. Both are bone stock. Neither car was abused, or raced.
Here are the differences. One of them was a garage queen, only driven on weekends, and clocked only 19,000 miles. It's a one owner vehicle, with all maintenance records available, and was clearly well maintained. The owner just recently purchased a brand new set of Bridgestone Pole Position tires. However, a CarFax report shows that this vehicle was popped in the butt 3 years ago, and was repaired for $4,000. I check on where the repairs were made, and have my own expert thoroughly inspect the car. Everything is on specs, and an excellent repair was made having no detrimental effects on this car.
The other 'vette was a daily driver, that has seen 3 different owners, and has clocked 47,000 miles. Because of multiple owners, there are no verifiable maintenance records available. The car looks very sharp, and the tires are in very good shape with only 3/32 of wear. There is no record of this vehicle having ever been involved in an accident, or having undergone any repairs.
Both owners are asking the same price for their vehicle. I am attracted to the 'vette with less mileage, and new tires, and excellent maintenance records. However, it's got that nasty CarFax report, what do I do? Simple, I buy the car with the previous repair, and I pay the same price. Why? Because I am getting a lower mileage, vehicle with new tires, and maintenance records, and most importantly, I've already verified that the repairs were excellent, and did not degrade the car in any way.
In my opinion, there is no inherent diminished value, simply because it was damaged. At the same price, it's still a better deal than the one with the clean CarFax report.
There is no question that many folks would walk away from the better buy because it was damaged, and that scares the heck out of them. That's ok, it leaves more options for folks like me.