Your car is worth less than you think after an accident | finder.com
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How to calculate the diminished value of your car

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Find out how much your car is worth now if you’re looking to refinance or sell your car.

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.

Diminished value 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.

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.

How to calculate your car’s diminished value

1. Determine your car’s value pre-accident. The easiest way to do this is to use either the Kelley Blue Book or NADA online calculator. Enter your car’s information into the calculator to get an estimate on the value of your car.

2. Apply a 10% cap. Ten percent is an arbitrary number that insurance companies use as the greatest amount of value that can be lost.

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 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 = 0–19,999 miles
  • 0.8 = 20,000–39,999 miles
  • 0.6 = 40,000–59,999 miles
  • 0.4 = 60,000–79,999 miles
  • 0.2 = 80,000–99.999 miles
  • 0.0 = 100,000+

For example, if your car has 25,000 miles 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 $13,000 before the accident, with 25,000 miles driven.

10% of $13,000 is $1,300. This means the maximum amount your car can lose in value after being repaired is $1,300.

If the damage to your car is assessed at 0.50, you would multiply $1,300 (the 10% cap) by 0.50 (the damage multiplier) to get $650.

Using the the 17c method, your car has decreased in value by $520. The new value of your car is $12,480.

$13,000 (original value)

$13,000 x 0.1 = $1,300 (maximum loss in value)

$1,300 x 0.5 = $650 (accident damage)

$650 x 0.8 = $520 (adjusted for mileage)

$13,000 – $520 = $12,480 (final adjusted car value)

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 so you’re armed with the knowledge you need. Know how much your car is worth so you’re prepared for selling your car or comparing how much car insurance you need.

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6 Responses

  1. Default Gravatar
    NeilMay 3, 2019

    Bought a new car for $32,000, next day with 24 Miles on it got rear ended. Now worth $22,000.00 after Carmax assessment. How much can I expect in diminished value. Is the fact that it was a day old with 24 miles on the clock important here…?? Thanks in advance

    • Avatarfinder Customer Care
      nikkiangcoMay 4, 2019Staff

      Hi Neil,

      Thanks for getting in touch with Finder. The age and mileage of your car is one factor that affects its resale value but 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. The most widely accepted method for calculating diminished value is the 17c formula. I suggest to follow the steps on the information above that says “How to calculate your car’s diminished value” to know how much your car’s present value is. Start with the NADA online calculator that you can get when you search online.

      Hope this helps!

      Best,
      Nikki

  2. Default Gravatar
    MattApril 29, 2019

    I own a 1999 dodge Dakota slt 4×4. This ve9has 67998 original miles and I’m the 2nd owner. Brand new paint job new flow master exhaust and a much more add-ons. Not 1 scratch on the inside or outside of the vehicle. The insurance company is only giving me $3500 for my truck.

    Please help me figure out why that is. Thanks!

    • Avatarfinder Customer Care
      JeniApril 30, 2019Staff

      Hi Matt,

      Thank you for getting in touch with Finder.

      Sorry to hear your dissatisfaction on the amount that your insurance if giving you on your 1999 Dodge Dakota.

      Since we do not have a page on this matter, I suggest that you seek professional help from some valuation services who are able to provide valuations entirely online for roughly $15 depending on the service. Details they will usually require include year, make, model, vehicle version, body type and miles.

      Discontinued cars often lose their value quickly.

      I hope this helps.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

  3. Default Gravatar
    WierzbickiSeptember 19, 2018

    How long do you have to put a claim for depreciation?

    • Avatarfinder Customer Care
      JoshuaSeptember 24, 2018Staff

      Hi Wierzbicki,

      Thanks for getting in touch with finder. I hope all is well with you. :)

      This depends on your the terms and conditions of your policy. The state where you are living may also affect how long you can wait before you can put a claim – typically between 1 and 6 years. Your time limit may also depend on the extent of damage or depreciation. It would be a good idea to directly get in touch with your insurer to learn more.

      You may also want to read this guide: How long after a car accident can you file a claim?

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!

      Cheers,
      Joshua

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