Car Depreciation Due to an Accident
If you have full coverage or comprehensive insurance for your car, your insurance company will repair your vehicle to its original state after a covered claim. If your car was damaged by an insured driver, his insurance company will do the same. After your vehicle repair, you might not obtain a fair resale price when trying sell the car or when trading it toward another purchase because of its diminished value.
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Why the Car Might Lose Value
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If the body shop that repaired your vehicle didn't properly match your paint or took shortcuts when making repairs, the vehicle's body work is likely noticeable and lets others know you've been in an accident. Buyers and dealers commonly check vehicle history reports to determine a vehicle's safety and previous damage. Your car will likely display a negative history report, which can reduce the value of your vehicle by as much as 18 percent, according to MSN Money. Your vehicle's appraised value might be considered "poor" instead of "good" or "excellent."
Considerations
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Newer cars suffer the most depreciation from accidents; values can fluctuate by thousands of dollars because of condition ratings. If you have an older vehicle that had issues before the accident, insurance companies argue that repairs might increase the car's value, according to MSN Money. For example, if your vehicle had high mileage, engine problems or a damaged front end, and someone hits you head on, you'll likely need a new engine or a repair of the front end of your vehicle. The cost of damages in this situation, however, are likely to exceed the value of an older vehicle. Your insurance company will probably total the vehicle instead of repairing it.
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Selling the Car for Full Value
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You might not lose any of your vehicle's value if you're lucky. If you plan to trade your vehicle toward another purchase, expect a dealer representative to appraise your car. Some dealers don't ask about accidents, nor do they fully inspect trade-in vehicles or obtain a history report. If you're selling the car privately, the same thing might happen. Some private buyers might choose to have the car inspected by a mechanic or purchase a history report, but others don't. You might sell your car for its full private sale or trade-in value. You might decide to keep your car for sale or try a different dealer if you're offered too low a price.
Who to Contact
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Your insurance company might not recognize the diminished value of your vehicle depending on your state or who was at fault in the accident. According to MSN Money, some states, such as Kansas and Georgia, recognize a vehicle's diminished value for insurance claims. If you can't sell your vehicle for its proper value because of previous damages, MSN Money suggests talking to your insurance agent or broker to initiate a claim for your loss. You may also contact your state's insurance commissioner for help.
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