QuestionQUESTION: I own a vehicle that has a "claim paid" notation on it. What does this do to the "resale or trade" value of the vehicle?
ANSWER: Hi Crystal,
Your question is one of diminished value. See below for two excellent pages of information on diminished value.
I don't know what impact that notation will have on the value unless and until you can tell the prospective purchaser what the accident involved.
I take it that the notation must be of title, which would indicate some substantial damage. Perhaps it could be a way of categorizing vehicles that have been salvaged.
The impact of prior accidents on the value of vehicles is partially the topic of these two diminished value information pages:
1. FAQ: Diminished Value Insurance Claims Explained Auto Accident Insurance Claims http://www.settlementcentral.com/page0454.htm
2. Diminished Value-Insurance Claim for a Cash Insurance Settlement
http://www.settlementcentral.com/page0455.htm
Those pages will give you an idea of the impact of that notation. Main thing would be to have an explanation to give to a prospective purchaser. If you could explain what happened, then that is a lot better than just saying that no one knows the accident history.
Best wishes,
Dr. Settlement, J.D. (Juris Doctor)
www.SettlementCentral.Com
---------- FOLLOW-UP ----------
QUESTION: We bought the vehicle damaged but NOT with a Salvage title, the title was good, no state inspection was needed to make it legal. I am only guessing, but maybe it was an insurance claim. If so, why would this effect my value for trade or resale, I did not make the claim and the vehicle was not a salvage?
ANSWER: Hello again, Crystal,
Now I wonder whether or not YOU KNEW that the vehicle was damaged when you bought it. Also, did YOU KNOW about this "claim paid" label? If not, then write to me again with more details inasmuch as those might impact your value.
I have no real insight as to why there is that label on your vehicle. Where is it on title?
I also only have an opinion that it will impact value just for the reasons I discussed on those pages I sent you to:
1. FAQ: Diminished Value Insurance Claims Explained Auto Accident Insurance Claims http://www.settlementcentral.com/page0454.htm
2. Diminished Value-Insurance Claim for a Cash Insurance Settlement
http://www.settlementcentral.com/page0455.htm
As those pages point out, it is just human nature to diminish the value of a vehicle if it has been in a wreck and a twin vehicle is virgin. Those pages show the ways in which purchasers do look for damaged cars. For example, they have sites such as www.carfax.com wherein the searchers are looking for prior accidents.
Best wishes,
Dr. Settlement, J.D. (Juris Doctor)
www.SettlementCentral.Com
---------- FOLLOW-UP ----------
QUESTION: Yes, I knew the vehicle was damaged. I bought it hit in the rear-end and had it repaired. However, I did not know there would be such a notation on the title that would diminish the value as bad as a Salvage title does, because it was not a Salvage title. The notation is listed like this:
Lein Holder(s)
NONE
Additional Vehicle Detail
Titled in WI as: Claim Paid
Thank You for your time and insight.
Crystal
AnswerOK, Crystal, that clears things up. You have a duty to tell the truth if asked about prior damage, so even without the annotation on the title, you would be bound to reveal the fact of the prior damage to any prospective buyer.
In some states the seller has to complete a document that tells about the vehicle. This is even more likely to force the revelation of prior damage.
Thus, since you cannot deceive any subsequent purchaser, the title annotation should make no difference.
Good luck,
Best wishes,
Dr. Settlement, J.D. (Juris Doctor)
www.SettlementCentral.Com
