Sale/Trade-in value loss after accident

[M_Six]

My GLC300 got rear-ended two months ago. Got it back today. Full repaired using all MB parts. Looks like new. There was no major structural damage. Just suspension and body parts.

Here's what I'm waffling about. According to the body shop guy and another repair shop owner I know, replacing parts damaged in an accident is no different than replacing parts that failed and were replaced under warranty. For instance, the ignition switch on this car failed within the first week I owned it. That part having been replaced will not show up in Carfax or affect the value of the car. But the repair to this car because of this accident will show up in Carfax. Insurance companies don't recognize diminished value after an accident if the car was repaired to new specs by a legit repair shop. IOW, if my car was worth $36k before the accident, got fully repaired, and then totaled in another accident the same day I picked it up from the repair shop, the insurance company would still consider it a $36k car.

The problem is that I won't be trading this car in to an insurance company. I'll be trading it in to a dealer or selling it outright. In both cases, Carfax showing an accident in the history is almost certainly going to reduce the perceived value of the car. Is there a legit reason that this car should be worth less if it's been properly restored to its previous condition (or even better)? How much damage needs to be done to a car to reduce its supposed value? If the bumper were scratched or dented and replaced, does that mean the car is now worth less?

I've always assumed that damage from an accident will cause a car to lose value either as a trade-in or outright sale. But now I questioning why that is.

A friend of mine who is a former lawyer thinks I should have my dealer give me numbers showing what they would offer in trade before and after the accident and try to recoup that loss from the insurance company. The dealer has agreed to do that. But is that value loss actually legitimate?

This forum seems to have a good mix of folks with experience in these areas. I'd love to hear some arguments for both sides because I'm undecided on it.

[kscarrol]

Originally Posted by M_Six

I've always assumed that damage from an accident will cause a car to lose value either as a trade-in or outright sale. But now I questioning why that is.

A friend of mine who is a former lawyer thinks I should have my dealer give me numbers showing what they would offer in trade before and after the accident and try to recoup that loss from the insurance company. The dealer has agreed to do that. But is that value loss actually legitimate?

This forum seems to have a good mix of folks with experience in these areas. I'd love to hear some arguments for both sides because I'm undecided on it.

Why? Because not all, and I suspect most, are not repaired with OEM parts as yours was. Even if so, how good is the shop that did the work? I get why used car buyers will pay less for a car in an accident...

As for your lawyer friend, I agree with him, if IL recognizes "diminished value" which the insurance can/should compensate for in addition to the actual damages. Not all states recognize diminished value and it can be an uphill battle with the insurance company paying the claim.

[Nuckle]

You should be completely covered for your loss in the accident which includes the fact that your car will bring less when you sell or trade it due to the accident. I would seek $6000-$7000. I have been down this road and Alabama has no laws for it but I did refuse to sign the medical release form until I was compensated. Keep your head and keep the L word out of the conversation for as long as you can.

[M_Six]

Originally Posted by Nuckle

You should be completely covered for your loss in the accident which includes the fact that your car will bring less when you sell or trade it due to the accident. I would seek $6000-$7000. I have been down this road and Alabama has no laws for it but I did refuse to sign the medical release form until I was compensated. Keep your head and keep the L word out of the conversation for as long as you can.

If I didn't know better, I'd think you were my lawyer friend. He also suggested $7k as a starting point and also warned me against mentioning the L word.

[Nuckle]

Originally Posted by M_Six

If I didn't know better, I'd think you were my lawyer friend. He also suggested $7k as a starting point and also warned me against mentioning the L word.

Hahahaha. Not an L but been down this road before. Insurance companies are trying to live in the days before carfax and that is not today's world. Your local dealer may confirm the diminished value if you contact them. Listen to your friend!

[M_Six]

I'm reading about the 17c rule (from a court case about diminished value). It caps diminished value at vehicle worth x .10. I don't believe NADA and Kelly Blue Book have caught up with the current market either as real world used car prices are insane now. But Carvana has a car with similar specs as mine (2016 MB GLC300 4-matic with 66k miles) listed for $30,900. So $31k x .10 is $3100. So should that be my rock bottom, take-it-or-leave-it number? How do I justify asking for $6-$7k? Illinois is a diminished value state, btw.

[DETRoadster]

Good luck. I went through this with my M2 and finally just gave up. They weren't going to budge and basically said "you are welcome to take us to court." My car was also lightly damaged with all repairs being completed by simply bolting new parts on. I consulted a diminished value appraiser who said that diminished value claims that are successful are based on frames being stretched, pulled, bent, banged, and welded back into place. You can make a claim that the metal is fatigued and is no longer good as new, thus the value has diminished.

In cases like yours and mine, we have what is known as a "stigma" loss. Parts were simply bolted back on, your car is in fact as good as new, but you now carry the stigma of an accident and is in fact worth less. Just like if you had 2 identical classic cars with identical specs and stats but 1 is a 1-owner and the other has had 25 owners. The 25-owner car will be worth less because there's a stigma around having so many owners, even though it's effectively the exact same car as the 1-owner.

Insurance companies wont pay out diminished value claims based on a stigma loss. You have no ground to stand on, legally, and the insurance companies know it. You're better off telling them your neck hurts and getting a nice massage once a week for the next couple years. Not that I'd endorse that sort of thing...

[Nuckle]

Originally Posted by M_Six

I'm reading about the 17c rule (from a court case about diminished value). It caps diminished value at vehicle worth x .10. I don't believe NADA and Kelly Blue Book have caught up with the current market either as real world used car prices are insane now. But Carvana has a car with similar specs as mine (2016 MB GLC300 4-matic with 66k miles) listed for $30,900. So $31k x .10 is $3100. So should that be my rock bottom, take-it-or-leave-it number? How do I justify asking for $6-$7k? Illinois is a diminished value state, btw.

See if your local dealer or carmax or the like will tell you the difference in value and use that as your number. After all you nor I would want more or less than we are due. The car in question for me was only a year old.

My unibody did need adjustment.

[M_Six]

Originally Posted by DETRoadster

Good luck. I went through this with my M2 and finally just gave up. They weren't going to budge and basically said "you are welcome to take us to court." My car was also lightly damaged with all repairs being completed by simply bolting new parts on. I consulted a diminished value appraiser who said that diminished value claims that are successful are based on frames being stretched, pulled, bent, banged, and welded back into place. You can make a claim that the metal is fatigued and is no longer good as new, thus the value has diminished.

In cases like yours and mine, we have what is known as a "stigma" loss. Parts were simply bolted back on, your car is in fact as good as new, but you now carry the stigma of an accident and is in fact worth less. Just like if you had 2 identical classic cars with identical specs and stats but 1 is a 1-owner and the other has had 25 owners. The 25-owner car will be worth less because there's a stigma around having so many owners, even though it's effectively the exact same car as the 1-owner.

Insurance companies wont pay out diminished value claims based on a stigma loss. You have no ground to stand on, legally, and the insurance companies know it. You're better off telling them your neck hurts and getting a nice massage once a week for the next couple years. Not that I'd endorse that sort of thing...

They did offer me $1k to settle right off the bat, so hopefully they'll go a bit higher.

Originally Posted by Nuckle

See if your local dealer or carmax or the like will tell you the difference in value and use that as your number. After all you nor I would want more or less than we are due. The car in question for me was only a year old.

My unibody did need adjustment.

My dealer did agree to give me such an estimate. I'll use that to go back to the insurance company.

[2000cs]

Also, its more work, but you can search the nation for your year, model and mileage, then rank by condition and accident history. You should be able to see the difference in asking prices for the ones with major accident repairs.

Check MBZ certified program details. Would they even buy your vehicle? Some programs won’t - which clearly diminishes the value.

[Tommy-G]

M_Six I skipped right to the bottom....100% false info from your shop. If your state recognizes diminished value you are 100% entitled to it REGARDLESS of how the vehicle is repaired.
The value of the vehicle is less due to the carfax/claim/accident NOT grading the quality of the repairs.

Ill read the rest of the thread and come back

[DETRoadster]

Originally Posted by M_Six

They did offer me $1k to settle right off the bat, so hopefully they'll go a bit higher.



My dealer did agree to give me such an estimate. I'll use that to go back to the insurance company.

Same here. $1k offer to settle all claims immediately. The company of the driver who hit me was refusing to pay for OEM parts so I held out on settling anything until they finally caved on that but it took 3 months. In the meantime I had to pay out of pocket to get the car out of the shop as they were tired of holding it while I battled with Liberty Mutual. In the end though, I took the $1k and just went on with my life. I probably lost $1k or $2k on resale value due to the accident when I sold the car but no more than that.

Do you have a 2nd car by chance? One thing you could do is treat the current used car market like the stock market and "buy low, sell high." In other words, get the car fixed and sell it now while prices are through the roof. Hold the cash for a couple years, drive the 2nd car, and wait until prices come back down. That's what I did. Any "loss" in value from the accident was more than offset by the bat-shit crazy used car market prices right now.

[M_Six]

Originally Posted by DETRoadster

Same here. $1k offer to settle all claims immediately. The company of the driver who hit me was refusing to pay for OEM parts so I held out on settling anything until they finally caved on that but it took 3 months. In the meantime I had to pay out of pocket to get the car out of the shop as they were tired of holding it while I battled with Liberty Mutual. In the end though, I took the $1k and just went on with my life. I probably lost $1k or $2k on resale value due to the accident when I sold the car but no more than that.

Do you have a 2nd car by chance? One thing you could do is treat the current used car market like the stock market and "buy low, sell high." In other words, get the car fixed and sell it now while prices are through the roof. Hold the cash for a couple years, drive the 2nd car, and wait until prices come back down. That's what I did. Any "loss" in value from the accident was more than offset by the bat-shit crazy used car market prices right now.

We have Wifey's car, but we can't get by with just that. This car is paid off and gets very few miles every year, so I'll probably just hold onto it. There isn't much out there that makes me want to trade it in now. I'm stunned at how low my usual dealer's inventory is. They used to have dozens of CPO cars and virtually the entire new model lineup for BMW, MB, Porsche, and Volvo. I used to surf their site just for the eye candy. Now you go there and see just a few pages of cars. It's depressing.

[G35POPPEDMYCHERRY]

As I read this, thoughts came back to me why I didn't go through with this when I got rear ended(felt like I should have)...then I realized lifes too short to fight these battles.

not a dig at you man. Just my 2 cents

[M_Six]

Originally Posted by G35POPPEDMYCHERRY

As I read this, thoughts came back to me why I didn't go through with this when I got rear ended(felt like I should have)...then I realized lifes too short to fight these battles.

not a dig at you man. Just my 2 cents

I hear ya. I don't plan on getting too wrapped up in this. I'll give it a shot and take the low hanging fruit. As I said, the body shop did a stellar job. The car looks and rides great. By the time I'm ready to get rid of this car, it'll be worth a lot less due to age and mileage at that point, so the diminished value won't play as much of a role.

[Maynard]

I recall another thread on this with some fairly detailed info on how to approach the claim - either here or on the 2'er forum. Worth a search for it, sounded like they had been successful, IIRC there are some state-specific issues.