Calculating Diminished Value

Inherent Diminished Value assessments can be secured from several different sources. While Inherent DV is present in all vehicles that have been involved in a collision and subsequently repaired, and is usually the easiest to document, it is also generally only half the complete DV equation. There are several factors which affect the amount of Inherent DV, including but not limited to: the year, make and model, mileage, the overall condition of the vehicle prior to the loss, the amount of damage, the type of damage, the extent of the damage, and the damage area.

Repair Related Diminished Value can only be assessed through an inspection of the vehicle by a qualified post-repair inspector.

Consumers could rely on the insurance company to calculate this loss, but if insurance reps aren't honest enough to tell someone of their right to file a DV claim in the first place, can they really be trusted to fairly and equitably assess this loss? When pressed to calculate DV, insurers often use a method known in the industry as "17c". This formula basically maximizes the loss of value at 10% of the vehicle's pre-loss value. For examples of how the 17c formula works, and to view the actual formula, CLICK HERE.

Dealerships are one of the most common sources of DV assessments. While this is possibly the easiest and fastest way to get a price for the value of an automobile, it is rarely the most accurate. Typically, a dealership gives a number that they roughly figure a vehicle would be worth on trade-in. This doesn't address the "fair market value" of the automobile. If not based on trade in value, the numbers supplied by dealerships are frequently based on the wholesale market. Disclosure laws apply to dealerships as well as individuals. Most dealers wouldn't jeopardize their reputation by having vehicles that had major damage on their lot. Used automobiles that had extensive damage are usually taken to a wholesale auction, where it brings even less than it would in the public market. Insurance companies know this and use this fact to discredit dealership figures. Another problem with the numbers supplied by dealerships is that they often won't put their offers in writing.

A recent trend is for "independent appraisers" to offer DV assessments. By nature, the vast majority of "independent appraisers" could more properly be labeled "independent INSURANCE appraisers" - meaning they derive the majority of their income from doing insurance-based work for insurance companies. How unbiased would their DV assessment be? Would they risk upsetting their primary source of income?

Yet another recent development is for internet resources to offer diminished value assessments. The price for these services can be very tempting - as low as $49 in some cases. First, the old adage "you get what you pay for" definitely applies. In most cases, $49, $59 or even $99 buys the consumer a piece of paper, no support no follow-up, nothing but a piece of paper with vague numbers on it. Worse still, is that many of these sources use a variation of the 17c formula. Why would anyone pay a fee to get what they would have gotten anyway?

Other internet sources charge a fee based on the amount of the settlement. They really don't care about the consumer's loss, they simply take what the insurance company offers, collect their portion, and pass the balance on to the consumer. While this may be more convenient than dealing with the insurance company, the results are rarely satisfactory.

If you chose one of these "alternative" resources - remember: WE TOLD YOU SO!

The best method of acquiring an unbiased DV assessment is to go to a Diminished Value professional.

*** Please Note: ***

Repair Related DV, Repair Related DV can only be assessed through a comprehensive examination of the vehicle and thorough review of the claim paperwork, including the insurance estimate, invoice for the repairs, etc. This involves arranging to have an expert inspect the automobile. Generally, this inspection exposes damage not noticed by the vehicle owner, revealing items that could become a problem if left unaddressed and frequently reveals potential fraud.

Collision Consulting provides a level of service that is second to none!

Regardless of which service Collision Consulting provides, we pledge our assistance throughout the entire process. While we cannot represent consumers or act on their behalf (to do so could be construed as unlicensed practice of law), we will provide support, documentation and research until the issue is settled to your satisfaction. None of our competitors offer this level of ongoing support.