How Much Does A Car Depreciate After An Accident?

Calculating the value loss of your vehicle after an accident is essential for submitting an insurance claim. A car’s value lowers when it encounters significant cosmetic damage or if it stops running; it is then in the insurance company’s best interest to calculate the lowest value possible of the car to determine reimbursements, regardless of who was at fault for the accident or damage. If the car owner has comprehensive collision insurance to cover all damage costs, the insurance company will distribute reimbursement based on a newly calculated value. The repair costs will not exceed a certain percentage of the value. This is critical info to have if you want to consider selling your car.

To determine the monetary value of a damaged vehicle, insurance companies use a standard industry formula to calculate a car’s ACV, so it can be difficult to predict how much the value of a vehicle will be determined by its insurance provider prior to a collision. Even if the accident was not your fault and the other driver is insured, the depreciation of the collision-repaired car is permanent.

This is disheartening if your car is new and expensive and you plan to sell or exchange it for another car. Fortunately, Georgia law allows payment to the collision victim below market value if the car is totaled, as long as the damaged vehicle is repaired. Insurance providers often try to offer car owners a way to save money in the event of car value depreciating due to an accident.

The value of your vehicle is not only the price you paid for it, but also how much you still owe towards it at its value market price. [Sources: 5] Suppose you bought a $30,000 car and opted for replacement insurance, but the car was written off after an accident and devalued to $18,000. If you have replacement insurance coverage, you will receive a new car that matches the price of your car before it was written off after a collision, which is a new $30,000 car rather than earning $18,000 in credit towards a new car. [Sources: 0] For this reason, it is in the car owner’s best interest to pay the extra cost of replacement insurance coverage to your car insurance company.

To be clear, a reduced-value claim occurs when you ask your insurer to compensate you for the loss of the original value of the car, but not all insurance companies will pay this type of claim. For a new vehicle, this cost could be up to several thousand dollars. However, depending on where you live and the brand of car you are applying for, you can receive compensation for a car with a reduced value. In some states, such as New York, New Jersey, California, Texas, Florida, Illinois, Pennsylvania, Michigan, Ohio and Wisconsin, insurance does not pay out in reduced amounts.

If the other driver is responsible for an accident, you can make a claim against that person’s insurance in nearly all states. In some cases, the insurance company may decide to pay only for the damaged vehicle part, and not for the entire cost of the car.

Only your insurance provider can determine whether your car is considered to be a total loss and only then can you determine the depreciated value of the vehicle. For more information on how to determine your total claims, visit CBB – NADA, or contact your local insurance company or state Motor Vehicle Office to begin calculating the total cost of your car’s insurance coverage for your accident.

 

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