Auto Insurance Claims: Determing value on a totaled car with prior damage., hail damage, dependable transportation

Question
I have a car I am trying to value. The accident in which we are accepting liability caused enough damage to total the car. The difficulty I am having on this car stems from previous damage. The car has very low mileage (48,700 miles on a year 2003), but had severe hail damage prior to our accident. According to the body shop that estimated the repair for our accident, the prior hail damage would have totaled the car. So essentially the car was totaled before it was totaled. Good running car but the body severely hail dinged. I am stumped on what to offer. My thoughts are to get values of the car as if in good to very good condition and then reduce it by a perentage, say 40%. Would this be a correct way to value the car?

Answer

ADE   Jean,

Thank you for your question.

Perhaps the repair of the hail damage would have indeed been more than 80% of the vehicle’s value but that in itself doesn't mean the vehicle didn't have value as dependable transportation.

Keep in mind while some buyers may be concerned about hail damaged and have no desire for such a vehicle, another, who cares more about dependable transportation (such as a parent for child's first car) may not care, especially if they can buy it at a discount thus the vehicle would have value. The question then is how much.

What you have is a vehicle, that due to hail damage would have “diminished value” and you would need to have the vehicle appraised by a local expert to help determine its pre-loss condition and the effects of the hail damage. To evaluate its value one must personally inspect the vehicle to determine its overall condition, mileage, wear & tear etc.

Your idea is sound whereas seeking comparable vehicles to determine the Fair Market Value for a vehicle of the same make, model, mileage, maintenance history and condition without the hail damage.

As far as the percentage, 40% may be in-line (without seeing the vehicle) but due to the age and low mileage I might start at 25% and negotiate from there depending upon the amounts.

Good luck in your settlement and thank you for your question, I hope it provides some assistance!