One of the main things you can expect when you own a car is for it to depreciate over time. Not only does the car depreciate when you drive it off the lot after buying it, but it also loses value if it's involved in a collision. It's important to know how much you can expect the average car to depreciate after an accident and if you can still sell it in the future.
It Depends on the Type of Accident
Either way, you can expect an accident to affect your car's value. However, the amount of depreciation depends on the type of accident. Minor accidents result in a small amount of depreciation, and larger accidents cause more significant depreciation.
You can perform all the necessary repairs and bodywork to restore the vehicle to its original condition, but the accident will still show up on the vehicle history report. Buyers are often a lot more hesitant to purchase cars that have been in accidents because there can be damage to the frame and other components. Issues can develop in the near future that may not occur if the accident never took place.
Consider the Make and Model
The type of car that you drive also influences how much it loses value in an accident. More expensive cars that cost hundreds of thousands of dollars can lose half their value the moment they get into an accident. If you own a car that is a base model and is only worth $10,000, the value may only drop by a few hundred dollars if it's a minor accident.
Additional factors that influence how much depreciation occurs are the age of the vehicle, the popularity of the make and model, and its mileage. The condition should also be taken into account. Cars that are already beat up and have damage present won't lose much value when they're in a minor fender bender.
Can You Increase the Car's Value?
Most experts will tell you there isn't a lot you can do to increase your car's value once it's involved in an accident. If another driver caused the accident, you have the option of filing a diminished value claim to ensure you can recover the difference of the lost value of your vehicle. This requires hiring a professional to appraise your car and file a claim for the depreciation due to the collision.
You can start this process by researching how insurance claims can be filed in the specific state where you live. In some cases, you don't have the option of filing a claim for the drop in value. It depends on the laws in your state, making it necessary to do your homework in advance.
If you have the option of filing a claim, you'll need to act quickly because there are often time restrictions in place. In some states, you have up to three years to file the claim. Filing the claim sooner instead of in a few years can prevent anyone from arguing the damage that occurred to your car.
You Can Expect an Average of 10 to 25 Percent Depreciation
In most cases, you can expect to lose an average of 10 to 25 percent of the car's value. The car will also continue to lose value the older it gets. Most cars drop in value by 10 to 15 percent each year, especially if it's a newer model.
There are also many websites available that allow you to get a more accurate estimate of your car's current value. This will give you an idea of the “17c value” of the car, which is what insurance companies use to appraise your vehicle after an accident occurs. This type of calculation is standard and more reliable. Unfortunately, the calculation is also known for favoring car insurance companies over the car owner.
The depreciation value is subjective once you choose to sell the car. The value is influenced by the buyer and how serious they perceive the damage to be. It also doesn't have as much of an effect if the car is in excellent value and the model is in high demand.
Selling the Car
Many people are unaware if they have the option of selling their car after it's been involved in an accident. Fortunately, you can still sell it if it's been restored to its original condition and is still reliable. Avoid hiding any of the details of the accident because most buyers will likely uncover the issues once they look up the history report on the car. If you fail to be transparent, they will likely move on to buying another car and will lose trust in you as a seller.
If you want to sell the car to a dealership, they'll likely pay the lowest amount possible once they learn it has an accident on the history report. Selling the vehicle to a private buyer can allow you to sell it for more money because the buyer will ask questions to determine how severe the accident was when it occurred. However, it can still be more challenging to find a buyer that overlooks the damage and has trust that the vehicle will continue to operate well in the coming years.
It's important to keep all records of repairs that have been performed on the car to ensure you can provide the documents to the buyer. This will allow them to have more confidence in the details, especially if the damage wasn't structural. A vehicle history report can paint a different picture than what actually occurred, making it necessary to have the right documents on hand.