[MN] Considering Diminished Value: Is It Worth It?
I’m looking to understand how diminished value works and whether I should pursue it. I own a 2020 Mercedes-Benz GLC300 with 40K miles. Currently, my KBB value is estimated between $23K and $26K, but dealerships are listing similar models with comparable mileage (2020 GLC300 under 50K miles) at prices starting from $34K.
Recently, my car sustained damage when a coworker accidentally hit my bumper, leaving scratches on two panels and causing a dent. The repair costs are projected to exceed $6K.
Since the other driver is at fault, should I inform their insurance company right away that I intend to claim diminished value? How exactly is it calculated? Is it determined by KBB, current market listings, or some other method? Is diminished value assessed as the gap between my car’s value before the accident and its current KBB value, or does it reflect the selling price at a dealership before and after the incident?
It sounds like you’re dealing with a frustrating situation, but it’s great that you’re looking into your options! Here’s some information that might help you with your diminished value claim.
Understanding Diminished Value: Diminished value refers to the reduction in a vehicle’s market value after it has been involved in an accident, even after repairs have been made. This is particularly relevant for high-value vehicles like your Mercedes-Benz GLC300.
Calculating Diminished Value: Diminished value is generally calculated using one of several methods, with the most common being the “17c formula.” This method considers the car’s pre-accident market value (which could be based on KBB or similar listings) and applies a depreciation factor based on the severity of the damage and the car’s age. The calculation usually results in a figure that represents the difference between your car’s pre-accident value and its post-repair value.
For example, if your car’s pre-accident value was $26K and, after repairs, it is worth significantly less—even though it has been repaired—then that difference could be your diminished value. Researching similar vehicles and their sale prices will provide a better idea of what your car is truly worth post-repair.
Communicating with the Other Driver’s Insurance: When contacting the other driver’s insurance, it’s wise to mention that you’re considering pursuing a diminished value claim. However, provide them with a clear picture of the damage and any repair estimates you have. Be prepared to present your calculations or estimates when negotiating the diminished value. It helps to gather evidence, such as comparable listings in your area, to support your claim.
Documentation: Make sure to keep all documentation related to the accident, repairs, and valuations. This includes repair invoices, before-and-after photos, and any market research you perform on similar vehicles.
Consulting a Professional: If you feel overwhelmed or if the insurance company disputes your claim, it might be helpful to consult with a professional appraiser or an attorney who specializes in insurance claims. They can help ensure that you get fair compensation.
Overall, pursuing a diminished value claim can be a worthwhile effort for your situation, especially given the significant difference between your car’s market value and the listings you’ve observed. Good luck!