If you’ve been involved in a collision with another vehicle, one of your priorities will be to get your vehicle fully repaired and roadworthy again. However, if you plan to resell your car in the future, you may be hesitant about doing so; after all, the accident will appear on the vehicle’s history report.
It’s understandable to be concerned. Vehicles with a history of accidents or repairs typically sell for less than those with a clean record. Learn how collisions and body shop repairs impact your vehicle’s resale value on the used market, what options you have to preserve its value, and how a skilled auto body shop like Harry’s Auto Collision can help.
Why and How Accidents Impact Your Car’s Resale Value
While all vehicles depreciate over time after they’ve been purchased, an accident can impact your car’s resale value even more. Value loss due to accident damage is referred to as diminished value. On average, accidents reduce a car’s value by $500. If the accident damage is severe, the average diminished value rises to about $2,100.
If you decide to sell your vehicle on the used market, potential buyers can look up your car’s VIN and see all known and reported accidents or repairs. Services like CarFax may update your car’s report in the following circumstances:
- Insurance reports. If you filed a claim with your insurance company after an accident, your insurance provider may share the information with vehicle history services.
- Auto body repairs. Reputable auto body shops and certified repair centers may share information about repairs to a vehicle history report service, especially if the repairs were completed as part of an insurance claim.
- Police and DMV reports. Depending on the state, accidents reported to the police, the local Department of Motor Vehicles (DMV), or equivalent agencies can sometimes be included in the vehicle history report.
A vehicle with a history of accidents or repairs tends to fetch lower values on the used market because it may be perceived as being higher risk, regardless of the severity of the accident or the quality of any repairs that were done.
For example, if your vehicle was involved in a collision and the repairs included frame straightening and body panel replacements, a potential buyer may have concerns over hidden or unaddressed damage. Consequently, they may be less likely to buy or make a lower offer than your model’s fair market value.
How Diminished Value is Calculated
After an accident, one of the most common methods used by the insurance industry to calculate a car’s diminished value is the 17c formula. This formula is named after a section of the State Farm v. Mabry court case, where it was introduced. Here’s how it works:
- Determining the car’s value before the accident. An insurer will start by consulting a reputable source, such as J.D. Power or Kelley Blue Book, to evaluate the pre-accident value of your make, model, and trim level.
- Applying a 10% cap. After determining the vehicle’s fair market value, insurers multiply it by 0.1 to obtain a base diminished value.
- Multiplier due to damage. Insurers multiply the base diminished value by a number that varies depending on how severely damaged the vehicle’s frame and body panels are.
| Damage | Multiplier |
|---|---|
|
Severe structural damage |
x1.00 |
|
Major body or structural damage |
x0.75 |
|
Moderate body or structural damage |
x0.50 |
|
Minor body or structural damage |
x0.25 |
|
No structural damage or body panel replacements |
x0.00 |
- Multipliers due to mileage. Insurers will multiply the car’s value again based on its mileage, reflecting potential wear and tear.
| Mileage | Multiplier |
|---|---|
|
Less than 20,000 miles |
x1.00 |
|
20,000 to 39,999 miles |
x0.80 |
|
40,000 to 59,999 miles |
x0.60 |
|
60,000 to 79,999 miles |
x0.40 |
|
80,000 to 99,999 miles |
x0.20 |
|
100,000 miles or more |
x0.00 |
The final calculated value is the diminished value. For example, if your model is typically valued at $45,000, its base diminished value would be $4,500. If an insurer determines your car’s body and frame damage are moderate and your vehicle had 44,000 miles at the time of the accident, they will calculate its diminished value as:
4,500 x 0.50 x 0.60 = $1,350
While the 17c formula is conservative, it remains widely used to calculate insurance payouts. Consider contacting a professional vehicle appraiser if you want a more accurate assessment of your car’s value after repairs.
How to Maintain Your Car’s Value After Body Work
How does body work affect your car’s value? The answer mainly depends on the quality of the repairs performed. Here are the steps to take if you want to reduce your car’s diminished value after repairs as much as possible:
- Choose a certified auto body shop. Choose an auto repair center with industry qualifications and, if possible, a manufacturer certification. For example, Harry’s Auto Collision is I-CAR Gold and ASE-certified and is a certified repair center for multiple automakers.
- Prioritize OEM parts. While third-party parts can be cheaper, original equipment manufacturer (OEM) parts restore your vehicle to its original factory specifications. OEM parts are of higher and more consistent quality, helping you preserve its resale value.
- Address major damage quickly. If the accident caused significant damage to your car, such as a bent frame or mechanical issues, schedule repairs as soon as you can. Leaving major repairs unaddressed for too long can introduce additional wear and tear, lowering the car’s value even further.
- Get quality paint repairs. If your accident has scratched or removed paint from your car, make sure to schedule paint repairs from a professional so the new paint fully matches the original color and finish.
Schedule Auto Body Repairs at Harry’s Auto Collision Today
Whether you intend to resell your car or keep it in your garage after an accident, you should always leave it in the hands of certified professionals. The team at Harry’s Auto Collision is ready to give your vehicle the repairs, maintenance, and paint touch-ups it needs. Schedule a repair service with us, and let us help you preserve your investment.
