Auto Insurance Claims: claim paid, salvage title, suspension problems

Question
QUESTION: I own a vehicle with a "claim paid" notation on the title.  How does this effect the "resale or trade" value of the vehicle.
ANSWER: Hi Crystal,

I have never heard of a "claim paid" notation on a vehicle title. However, if it is similar to a "salvage" or "rebuilt" title, the value of the vehicle will be about half of standard values.

You should contact your DMV and ask them specifically what the "claim paid" stamp means.

I hope this helps
Richard Hixenbaugh

---------- FOLLOW-UP ----------

QUESTION: We bought the vehicle damaged.  However, this was not a "salvage title" nor did we make the claim.  I'm guessing it was an insurance claim, from the previous owner. So,why would this effect our ownership or value for resale or trade?

Answer
Hi Crystal,

Any time a vehicle is involved in a moderate to severe collision it will have an affect on the vehicle's value. It's called Diminished Value. Even though the vehicle may have been properly repaired, it will always carry a history of damage through CARFAX and other vehicle history reporting companies. Damaged and repaired vehicles are considered by most consumers to be "damaged goods".  Repaired vehicles are often prone to ongoing problems such as, peeling paint, suspension problems, A/C problems, uneven tire wear, electrical problems. Even if the vehicle is properly repaired, there is no way for a potential buyer to be sure they will not experience any of these problems. As a result most buyers will either not consider buying a wrecked and repaired vehicle or they will expect a substantial discount to make up for the potential problems.

If your vehicle does not have a salvage title it will still have a reduced value but will not be as severe as a salvage title.  If you you know the cost of the repairs, a general rule of thumb to determine the amount of diminisihed value is 50% of the cost of the repairs.

I hope this helps
Richard Hixenbaugh