How to Handle a Diminished Car Accident Value Calculator in Orlando

There are many things you must consider when you are in a car accident in Orlando. Even if there are no injuries, you must deal with repairs to your car and reporting the incident to authorities and insurance companies. Something you might not consider at the time of your accident is the diminished value of your vehicle due to the damages incurred.

Diminished value is the difference between what you could sell your vehicle for before the accident and what you can now sell your vehicle for after the accident. Even with proper repairs, your vehicle may be worth less after a car accident. And with advances in consumer reporting like Carfax reports, it is very easy for a prospective buyer to find out if your vehicle has been in an accident. 

In Florida, you have the right to seek compensation for diminished value after a car accident. Contact Morgan & Morgan today for a free case evaluation.

What Is Diminished Value?

Diminished value is the change in market value after your car has been in an accident. Even if you have your vehicle repaired by a reputable mechanic or a dealership, your car was still in an accident. This fact will show up on the many reports that are now customary when buying or selling a car. Most people do not want to buy a car that has been in an accident. If they are willing to purchase it, they will expect a discounted price because of it. This discount is the diminished value you have suffered because your car was in an accident. 

Diminished value is of greater importance to luxury cars or high-performance cars. This is because an accident can severely damage some of the features of a luxury car that make them more desirable than the average vehicle. However, any kind of car can have diminished value after an accident. Having an accident can have an impact on the safety and reliability of the vehicle, shorten the life of the vehicle, and lower its resale value. These factors can be even more important if you still owe a significant amount on your loan, or you expected to have the vehicle for a long time.

Types of Diminished Value

There are three types of diminished value resulting from a car accident. 

  • Immediate Diminished Value. This is the loss in value experienced right after the accident before repairs are made. It is the difference between what your car was worth before the accident and what your vehicle is worth right after the accident.
  • Inherent Diminished Value. This is the value your car loses because it has been in an accident. Even if you have your car repaired, many buyers do not want to buy one that has been wrecked. Some will buy it, but not without a significant discount. The discount simply due to the fact your car has been in an accident, even after being repaired, is the inherent diminished value.
  • Repair-Related Diminished Value. If the vehicle was not properly repaired, there is additional diminished value resulting from the accident. In addition, repairs to classic cars or luxury cars may require after-market parts or paint colors that are not original. These types of repairs can also cause diminished value.

Calculating Diminished Value

In Florida, there is no standard calculation for finding the diminished value after a car accident. However, many insurance companies will use the 17c formula for diminished value. This method was developed as a result of a lawsuit in Georgia, but insurance companies across the United States have adopted it as standard. It is not recognized by Florida courts. It is important to understand the way diminished value is being calculated, especially if you are dealing with the insurance company on your own.

Orlando Car Accident Diminished Value Calculator - Using 17c to Calculate Diminished Value

Step 1: Consult Kelly Blue Book or NADA for the value of your car. You will need to know the make and model of your car, the mileage on your car, and any features of the car before the accident.

Example: Kelly Blue Book says your car was worth $20,000 before suffering damage in the accident.

Step 2: Apply a 10% cap based on the value of your car according to Kelly Blue Book. The insurance company will give you no more than 10% of the value of your car as diminished value. This was established in the Georgia court case. 

Example: $20,000 x 10% = $2,000 is the maximum the insurance company will pay you

Step 3: Apply a multiplier for the damage that cannot be fixed with a new part. This only applies to structural damage and does not include mechanical damage. Take the maximum value number from Step 2 and multiply it by the value associated with the damage caused:

1: severe structural damage
0.75: major damage to structure and panels
0.50: moderate damage to structure and panels
0.25: minor damage to structure and panels
0.00: no structural damage or replaced

Example: Your car suffered moderate damage: $2,000 x 0.50 = $1,000 is the new diminished value adjusted for severity of accident

Step 4: Apply the multiplier for the mileage on your car. The more miles your car had on it at the time of the accident, the less it would be worth whether it was damaged or not.
1.0:   0-19,999 miles
0.80: 20,000-39,999 miles
0.60: 40,000-59,999 miles
0.40: 60,000-79,999 miles
0.20: 80,000-99.999 miles
0.00: 100,000+

Example: Your car had 50,000 miles on it at the time of the accident: $1,000 x 0.60 = $600
In this example, using the 17c method, the insurance company will likely offer you a settlement of $600 for the damage to your car. 

Orlando Car Accident Diminished Value Calculator - Calculating Actual Diminished Value

Step 1: Use the same valuation of your car before the accident from Kelly Blue Book or NADA as the first example.

Example: Kelly Blue Book says your car was worth $20,000 before suffering damage in the accident.

Step 2: Calculate the value of your car after the damage from the accident. This can be done in a few ways. Many lawyers will use a standard amount of 33% reduction in the value of your car. You can also adjust the level of damage in the Kelly Blue Book or Nada calculator. Or you can compare other cars that are similar to yours with similar accident history and use that value. In this example, we will use the standard valuation.

Example: $20,000 x 0.33 = $6,600 is the diminished value 

That is quite a difference in diminished value! That is why it is important to know the value of your car and how much diminished value was suffered because of the accident. Consulting with a car accident attorney is important in getting what is due to you in an accident.

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John Morgan