I have people ask me all the time… Ken, can you show me how to calculate diminished value? To do a proper appraisal, it takes research. Research most other appraisers are not eager to do. Actually, I’m not even eager to do it, but I know it has to be done in order to calculate the actual diminished value. There is no secret formula that works for all vehicles. In my opinion, Diminished Value Calculators are a joke. I’m sure the insurance companies love it when they see an “assessment” from an online Diminished Value Calculator. Most of these are either so low, that the insurance company jumps at the chance to pay it, or they’re so stupid that the insurance company voids the assessment. Either way, the claimant looses. Even though many take it as a “win”. Settling for $800, may sound good at the time, but if you found out later your claim was actually worth $8000, you’re not going to be such a happy camper.
To do a proper appraisal, it takes research
In order to accurately calculate Diminished Value, you need to know the vehicle, the local market and not only the amount of damage, but also the type of damage. There is no magic Diminished Value Formula. Though, the insurance companies wish there were. They tried with Formula 17C, which fails miserably at accurately computing diminished value. Especially on high end vehicles. There are some things a computer can’t do better than a human(at least not yet). Sometimes it takes industry knowledge that changes from day to day that computers can’t keep up with. But, more likely, a computer would probably get only a portion of the story. I can’t see how an instant DV calculator would even work. If I was a representative of an insurance company, I’d at least want to know what the formula was they based the calculation on. And I haven’t seen anyone give that formula.
There is no magic Diminished Value Formula
That’s one reason we developed DiminishedValue.net. We wanted a way to help people to achieve a more accurate value at a low cost. Our appraiser is Ken Nix. Ken works with many other advocates to help fight insurance companies to give you more rights. When we inspect a vehicle, we like to start the process before a body shop starts work on it if at all possible so we can have photos to paint a picture of vehicle and the loss it has suffered. Most Diminished Value calculators only show inherent diminished value and can be thousands less than what it should be. An example of Repair related diminished value is where a vehicle’s bumper cover is destroyed, and in order to get out cheap, the insurance company instructs the body shop to use an aftermarket piece that has not undergone any testing and in many cases may not even allow the paint to adhere properly and in turn you have flaking and chipping paint in a few months. Because they did not return the bumper cover to pre-loss condition, you can claim the cost of the OEM bumper and fair labor to replace it as a repair related diminished value.