Diminished value refers to the loss in market value you experience on your vehicle after an accident and repairs. This amount can be significant, equaling 25% or more of your pre-accident value, so it’s natural to wonder if perfect repairs can help you avoid it.
The answer is a simple, if unfortunate, one: No, even seamless post-accident repairs can’t erase your car’s history-based loss in value, which is easily visible in Carfax/AutoCheck vehicle history reports and market data.
In the rare and exotic car markets, where even a small accident can have a major impact on resale value, it’s essential that owners know how to get proper diminished value compensation and minimize the losses caused by another’s negligence. Read on to learn more about diminished value after accidents, including different types of diminished value, how Carfax reports affect resale, the limits of 17c, and why you should use a USPAP appraisal in support of your claim.
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Why Accident History Always Lowers Value
When it comes to how much a car is worth, its original purchase price is only a fraction of the equation. Other factors, such as make and model, age, mileage, and, of course, accident history, also matter, and this is particularly true in luxury markets.
Accidents reduce your car’s value in several notable ways. These are broken down into three distinct types of diminished value, each of which has a longstanding impact on how much you can reasonably sell for later on.
| Type of Diminished Value | Description | Cause(s) |
| Immediate | Difference in a car’s value immediately before and immediately after an accident (before repairs). | Accident itself |
| Inherent | Long-term loss in value caused by accident history. | Market stigma and history reports |
| Repair-related | Post-accident loss in value caused by inadequate repairs | Substandard and/or non-OEM repairs |
Inherent claims are the most common type of diminished value. That makes sense: while flawless repairs can erase the physical damage caused by an accident, they can’t erase the Carfax and AutoCheck entries documenting the incident. Other mitigating factors, like the use of OEM vs. aftermarket parts and the impact of structural vs. cosmetic damages, matter to buyers, too, and all need to be considered when filing a diminished value claim, especially for luxury, exotic, or collectible vehicles with more to lose in the resale market.
How Carfax/Vehicle History Affects Exotic Resale After Repairs
Most exotic car buyers are looking for a clean vehicle history with their investment – and they’ll pay a premium to get it.
Carfax and AutoCheck reports detail everything about your car’s history, from when and where it was sold to how often its airbags have been deployed. Any red flag is a ding on resale value, driving down demand and limiting how much you can command for your vehicle in the collector’s market. It also has an effect on Certified Pre-Owned (CPO) eligibility, which requires a positive vehicle history report.
You can do a quick 60-second audit checklist ahead of a professional appraisal to assess your vehicle history and get an idea of how an accident will impact resale value. Simply pull up your Carfax and/or AutoCheck report and review it for flags. If you find any, be ready to supply photos and invoices that address these flags and (hopefully) minimize their impact.
Do Exotics Lose More Value After Accidents?
Yes, an exotic vehicle stands to lose a lot more in value after an accident than its standard counterpart. In fact, the value loss for an exotic can be as high as 50% based on the extent of damage.
Other relevant factors, like specialty repair needs, higher repair-to-value ratios, and an irreversible loss in vehicle provenance, further decrease the post-accident value of exotic vehicles. Sadly, none are resolved by repairs, even if they’re done according to the highest OEM standards.
Diminished Value Calculations: 17c Formula vs. USPAP Appraisal
Manufacturer-certified repairs of a luxury vehicle help with quality but don’t erase inherent diminished value, even when paired with OEM parts. To figure out how big a hit you’re facing, you can look at two ways to calculate diminished value: the 17c formula and a USPAP appraisal.
| Method | Description | Capped Calculation? | Example |
| 17c Formula | A generic formula that calculates diminished value as [10% of pre-accident market value] x [damage multiplier] x [mileage multiplier]. | Yes, the total can be no more than 10% of your car’s pre-accident value. | A $200,000 car with moderate damage and 5,000 miles on it is eligible for a max $10,000 in diminished value |
| USPAP Appraisal | A non-generic appraisal method that uses Hagerty/KBB data combined with market specifics and industry-standard methodology. | No. | A $200,000 car with moderate damage and 5,000 miles on it could claim a diminished value of more than $10,000 based on USPAP research and analysis. |
In general, USPAP appraisals carry more weight and accuracy for high-value vehicles, since they use credible valuation techniques instead of a generic formula to determine loss in value. It is highly recommended that exotic vehicle owners get a USPAP-compliant appraisal instead of relying on the flawed 17c formula when filing a diminished value claim.
[Learn How to Calculate the Diminished Value of a Vehicle]
In Summary
Carfax and structural history reports have a huge effect on resale value. As such, perfect repairs don’t remove inherent diminished value, though they can help you minimize your financial loss when combined with a thorough USPAP-compliant appraisal (the preferred method over the 17c formula, which typically underestimates exotic losses).
At SuperCarClaims.com, we have extensive experience navigating diminished value claims for luxury and exotic vehicles. Check out our diminished value FAQ page to learn more, or contact us today to get a free claim review and schedule a USPAP-compliant diminished value appraisal.
