Diminished Value On Your Car

Is My Car Worth Less After An Accident?

In most instances, the answer is yes, however, how much less may be an issue.  After someone hits your in an accident and causes damage, any repair of your vehicle will go on a CARFAX report and will be discoverable to anyone you wish to sell your car to in the future.  The problem with car repairs after an accident is that no one really wants to buy a car that has previously been in a wreck.

Any buyers that you do get will be willing to pay less money for your car (because it was wrecked) than one that has never been involved in a wreck.

An Accident Is An Automatic Turn Off

CARFAX even says on its website:

Your repaired vehicle may look like new, but if you were to sell it the Carfax Report would show the accident. Automatically, many dealers discount the car’s price even if the car is in excellent shape.

There are a lot of people out there who have purchased a used car that was previously involved in a wreck and they know better.  When a vehicle is repaired after an accident, it is rarely the same as it was before.  While purely cosmetic repairs for minor damage won’t effect how a car drives, any sort of collision that involves sheet metal damage in a unibody vehicle (like most cars are today) has the potential to result in deformation of the overall structure of the vehicle (even though body shops and insurance companies deny it).

This is when the owner notices that the vehicle may look fine but it doesn’t quite drive straight.  If this has happened to you, then you are in for a fight with the insurance company.

How Do I Get Paid For Diminished Value In Florida?

As the plaintiff in your case, you have the burden of proof to show that you have been damaged by the other driver’s negligence.  You have to prove both liability and damages.

In order to prove your claim for diminished value to your vehicle, you have to show that the fair market value for your vehicle is lower today because of the accident than it otherwise would have been without the accident.  To do this, you should take your vehicle to a dealership for a trade-in evaluation and see how much the dealer will give you for your vehicle.

When you get your trade-in estimate from a dealer, the dealer should be taking the “book value” of your vehicle minus any damage, adjustments for mileage, and an adjustment for prior damage that has been repaired.

The value on the estimate for prior damage that has been repaired is your claim for diminished value that you can present to the insurance company.

Diminished value on a new car involved in an accident is going to be more than the loss in value to an older vehicle because of an accident.  Your diminished value goes hand in hand with depreciation.  As a car gets older, eventually the depreciation in fair market value of a vehicle tends to absorb any blemishes on the vehicle’s record such as a prior accident.

However, with two or three year-old cars, people are willing to pay more money because the car is newer and they expect to use it for a longer time than a vehicle that is already 15 years old.

Negotiate With The Insurance Company Or File A Lawsuit

After you know how much you can justifiably establish as the value of your diminished value after a car accident, you will have to negotiate with the insurance company.  If the insurance company does not offer you a fair amount, you may need the help of an attorney to file a lawsuit along with any injury claim (if you have one).

Court Cases On Diminished Value In Florida

The following case was decided by a trial court in Orange County, Florida (Orlando).  It is a great legal ruling to use if you ever have to make a claim for diminished value as insurance companies like to think that diminished value does not really exist.

Kurow v. Infinity Auto Insurance Co., 25 Fla. L. Weekly Supp. 368a (Orange Cty. Ct. 2017)

After a motor vehicle collision, the plaintiff sued the defendant and her insurer for diminished value to his vehicle. The insurer denied coverage for diminished value, and the plaintiff sought a summary judgment on the issue. The court granted the summary judgment, noting the defendant’s policy did not include an exclusion for diminished value, and that “‘Damages’ is not defined in the Policy, so this Court must look to Florida law for the legally recognized elements of damages. . . . One of the elements of damages that a person can recover when a motor vehicle suffers property damage is diminished value. Under Florida law, diminished value is the difference between the value of the vehicle that suffered property damage immediately before the collision and its value after it was repaired and returned. . . . Thus, Plaintiff’s claim for diminished value . . . is covered as a damage caused by property damage.”

The concept of diminished value for car accidents was recognized and discussed in McHale v. Farm Bureau Mutual Insurance Company, 409 So. 2d 238 (Fla. 3d DCA 1982); McMinis v. Phillips, 351 So. 2d 1141 (Fla. 1st DCA 1977); and Merrill Stevens Dry Dock Company v. Nicholas, 407 So. 2d 32 (Fla. 3rd DCA 1985).

Other concepts related to the value of property losses are discussed in the October 2002 publication of the Florida Bar Journal.

Can I Trade In My Car If It Has Been Damaged In An Accident?

Yes you can.  The dealer accepting your vehicle as a trade can receive an assignment of benefits/rights under your insurance policy to get paid for the repairs that they do.  The value that you should receive for the vehicle from the dealer should be the same as if the vehicle has already been repaired.  Therefore, the only “losses” that you have in trading your vehicle are in diminished value because of the accident and depreciation (which occurs anyway).

Additionally, when you sue an insurance company for diminished value of your vehicle after an accident, one of the defenses that you can expect to see from the insurance company is that you haven’t sold or traded your vehicle and, therefore, you cannot incur damages for diminished value until you sell the car.

This defense should not hold up in court for precisely the same reasoning upheld in the Kurow case above.  You are not required to sell or trade your car in order to perfect a claim for diminished value.

Contact Us For A Free Case Review

If you are having difficulty dealing with the insurance company after your car accident, you should contact a Lakeland car accident attorney to get help from a lawyer.  We represent clients with car accident cases across Polk County, including Lakeland, Winter Haven, Bartow, and Haines City, Florida.  An appointment with an attorney is free.

Click here to see more advice on getting the insurance company to fix your car after an accident.

April 07, 2017