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How to calculate the diminished value of your car

Been in a car accident? Find out how much your car is worth before you sell.

If your car’s been in an accident, it can negatively affect its value — even if your car’s been repaired and shows no signs of damage. This depreciation in your car’s worth is called diminished value.

Why is my car worth less after an accident?

Cars that have been damaged in an accident, even after a repair, are worth less than cars that have never been in a collision. The reason mostly comes down to perceived safety; a car that’s been repaired might not have been fixed properly or with original manufacturer parts. And you’re typically not covered by a manufacturer warranty or recall in those cases either.

That fact can come back to haunt you if you try to sell your car. Every car accident goes on your car’s vehicle history report. Buyers will be able to see your car’s history of repairs and accidents, and also your car’s diminished value.

Your car’s diminished value after an accident is important to understand if you want to refinance or sell your car, or if you want to file a diminished value claim with an insurance agency because of an accident where the other driver is at fault.

How to calculate your car’s diminished value

The most widely accepted method for calculating diminished value is the 17c formula. Most insurance providers favor this method, but keep in mind that it’s not universal. (State your car’s mileage in miles not kilometres when using the calculator below.)

Diminished value calculator

Find out how much your car is worth after an accident
How much was your car worth pre-accident?
$
What's the estimated damage?
A number from 0-1 based on how serious the damage is. If you're not sure, use 0.5 for moderate damage.
What's your car's mileage?

Fill out the form and click "Calculate" to see how much your car is worth after an accident.

Your car is worth $ after the car accident.

How the 17C diminished value method works

1. Determine your car’s value pre-accident. The easiest way to do this is to use either the Canadian Black Book or Autotrader.ca.

2. Apply a 10% cap. Insurance companies assume your car won’t depreciate by more than 10%, so we start with this number and apply multipliers to decide the final percent change.

3. Apply a damage multiplier. The insurance company will assess the damage to your car and apply a number from zero to one indicating the severity of the damage.

  • 1.00 = Severe structural damage
  • 0.75 = Major damage to structure and panels
  • 0.50 = Moderate damage to structure and panels
  • 0.25 = Minor damage to structure and panels
  • 0.00 = No structural damage or replaced panels

This range can include any number from 0-1, not just increments of 0.25. This number is multiplied by the 10% cap.

4. Apply a mileage multiplier. Your car’s value is further adjusted to reflect the car’s mileage.

  • 1.0 = 0–29,999 kilometres
  • 0.8 = 30,000–64,999 kilometres
  • 0.6 = 65,000–94,999 kilometres
  • 0.4 = 95,000–129,999 kilometres
  • 0.2 = 130,000–159,000 kilometres
  • 0.0 = 160,000+ kilometres

For example, if your car has 35,000 km on it, you’ll multiply your adjusted value for damages by 0.8.

Toyota Camry

You drove your Toyota Camry to the grocery store, and another driver hit and damaged your car door in the parking lot.

Let’s say your car was worth $18,000 before the accident, with 35,000 km driven.

10% of $18,000 is $1,800. This means the maximum amount your car can lose in value after being repaired is $1,800.

If the damage to your car is assessed at 0.50, you would multiply $1,800 (the 10% cap) by 0.50 (the damage multiplier) to get $900.

Using the the 17c method, your car has decreased in value by $720 or 4%. The new value of your car is $17,280.

  1. $18,000
    (original value)
  2. $18,000 x 0.1 = $1,800
    (maximum loss in value)
  3. $1,800 x 0.5 = $900
    (accident damage)
  4. $900 x 0.8 = $720
    (adjusted for mileage)
  5. $13,000 – $720 = $17,280
    (final adjusted car value)

What does the damage multiplier mean?

The biggest difference between minor and major damage is whether the damage affected the car’s integrity or structural support. For example, minor damage might be only on the surface, such as scratched bumper paint or a dented door. Major damage typically involves replacing the whole piece or could affect the car’s safety, such as damage to the car hood or airbags.

Your insurance adjuster sets the damage multiplier based on how much damage your car took. Here are some examples of minor to severe damage.

  • 1.00 = Severe structural damage. Destroyed frame or windshield pillars, rollover damage
  • 0.75 = Major damage to structure and panels. Broken frame, bent axles
  • 0.50 = Moderate damage to structure and panels. Airbags deployed, large dents
  • 0.25 = Minor damage to structure and panels. Dented hood or fender
  • 0.00 = No structural damage or replaced panels. Broken side mirror, scratched paint, cracked headlight

Can I make a car insurance claim for diminished value?

Most Canadian insurers won’t approve claims for diminished value following a car accident. Generally, payouts are made for “direct losses” related to car accidents. It’s difficult to convince an insurance company that long-term damage to a vehicle’s resale value directly stems from physical damage because of a mishap.

There has been the odd case in Canada where vehicle owners have successfully sued insurance companies for additional damages because of their cars’ diminished value. It may even be possible to win damages related to diminished value by suing the private party at fault for the accident, which would fall under tort law not insurance law. But by and large, the law is still largely in insurance companies’ favour.

Your insurance policy may allow for vehicle repair or replacement. Insurers seek to compensate you with a car that’s in a similar condition to the pre-accident vehicle, either by repairing the car to its original condition or paying out the value of your car if it’s totaled.

Diminished value types and definitions

To understand your car’s diminished value, insurers and courts use a few different definitions of diminished value.

  • Inherent diminished value. A decrease in value due to the stigma of being in an accident. Most buyers distrust the quality of a vehicle that has been involved in an accident.
  • Instantaneous diminished value. How much your car is worth immediately after an accident. Your car’s immediate post-accident condition is when your insurer decides the cost of repairs to restore your car to its original condition, not necessarily its original value.
  • Repair-related diminished value. A decrease in value related to poor or negligent repairs.

12 ways to reduce your car’s depreciation

Compare free car insurance quotes online

Name Product Accident Forgiveness Min. Liability Coverage Discounts Available Online Claims Available Provinces
Surex Auto Insurance
Yes
$1,000,000
Up to 25%
Alberta, Northwest Territories, Nova Scotia, Nunavut, Ontario, Yukon
Submit one application and receive quotes from 10+ insurers. Save up to 25% on your car insurance, plus get access to an insurance advisor.

Who it might be good for: Drivers looking to use an insurance broker to compare multiple pricing and coverage options.
Sonnet Auto Insurance
Yes
Varies by Province
Up to 25%
Alberta, New Brunswick, Nova Scotia, Ontario, PEI, Quebec
Get auto insurance with Sonnet in just five minutes. Save up to 25% on your auto insurance through discounts and bundling options.

Who it might be good for: Drivers looking to apply and manage their car insurance completely online.
Intact Car Insurance
Yes
$1,000,000
Up to 25%
Alberta, Northwest Territories, Nova Scotia, Nunavut, Ontario, Yukon
Get car insurance with Intact and enjoy a quick turnaround on any lodged claims. Get a free quote through Surex.

Who it might be good for: Drivers looking to get rewarded for good driving behaviour.
Aviva Car Insurance
Yes
$1,000,000
Up to 25%
Alberta, Northwest Territories, Nova Scotia, Nunavut, Ontario, Yukon
Aviva car insurance offers customizable policies, discounts and optional insurance coverage add-ons. Get a free quote through Surex.

Who it might be good for: Drivers looking to customize their auto policy.
Travelers Car Insurance
Yes
$1,000,000
Up to 25%
Alberta, Northwest Territories, Nova Scotia, Nunavut, Ontario, Yukon
Travelers auto insurance offers a selection of coverage options for just about any type of vehicle. Get a free quote through Surex.

Who it might be good for: Drivers looking to get car, motorcycle, classic car, motorhome or recreational vehicle coverage.
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What can I do if my car is worth less after an accident?

  • Make a claim for diminished value. If your province or territory allows it (as is the case in BC and Alberta), you could recover some of your car’s lost value.
  • Pick a payout over repairs. If your car isn’t declared a total loss (repairs cost more than the car is worth and fall close to value of a total loss claim), you can try to make an appeal for a total loss decision instead. You’ll get paid cash for your car’s pre-crash value instead of getting a car that’s worth less after getting repaired.
  • Drive your car until it’s no longer driveable. If you don’t sell your car, you won’t have to worry about diminished value.
  • Avoid a salvage title. You’ll typically have the choice to buy back your car on a salvage title if it’s declared totaled. But your car will be worth even less in this case since it’s not repaired and carries a salvage title. Some people consider keeping their salvaged car for nostalgia or to repair it themselves, but the car won’t be worth much in this case.

Bottom line

Not all insurance companies will use the same calculations to arrive at the diminished value of your car post-accident, but using the 17c formula will give a good starting point. Know how much your car is worth, so you’re prepared to sell your car or decide how much car insurance you need.

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