If you’ve been in a car accident, consider the repair costs and the potential future impact on your Carfax® report. The record cannot be removed even with perfect car repairs.
Will the Carfax® report impact resale price after the accident? The answer is yes, usually more than the owner thinks. Read on and find out how the report operates and how the buyers behave.
What Shows Up on a Carfax® Report
Carfax® gathers information on vehicle histories from insurance providers, departments of motor vehicles, repair garages, salvage auctions, and police reports. Not all minor accidents make it into the report, but those that do usually stay there permanently. Information important for the resale value includes:
- Accident reported. An accident noted through Carfax®’s data partner, often with an associated severity code.
- Damage reported. Damage noted, but not necessarily with an accident involved; it can be hail or a parking lot accident, among others.
- Airbag deployment. Recorded separately, it is indicative of a higher-impact accident.
- Structural or frame damage. The most damaging designation available in a report and practically equal to a branded title.
- Total loss history. Just being declared by an insurer as a total loss renders resale value meaningless.
Carfax® does not gather all information. Accidents paid out of pocket and repaired independently of the insurance network may be omitted from the report.
How Much Value Does an Accident Entry Actually Cost You?
The amount of the discount will be contingent on the severity of damage, the age of the car, its cost, and the competitiveness of the local market. The common discounts can be estimated as follows:
Cosmetic Damage Entry: 5 to 10 percent discount off the resale value;
Moderate Accident Entry: 10 to 20 percent discount;
Severe or Structural Damage Entry: 20 to 40 percent discount; sometimes even more.
Deployment of airbags: An additional 5 to 15 percent discount on the severity.
The newer and more expensive the car is, the bigger part of its value it will lose. There are simply more clean-history cars on the market at this level. For example, a $30,000 SUV with a moderate accident reported in its Carfax® history will cost $5,000 to $6,000 less than the same car without an accident in its history.
Why the Discount Sticks Even After a Perfect Repair
Despite being in perfect condition and having perfect performance, this property is still considered less valuable on the market. There are many reasons for this, and the quality of the repair doesn’t matter.
Consumer reluctance: When there is the choice between two vehicles at equal price points, almost everyone will opt for the clean history option, making it necessary to sell the other one at a lower price point.
Automated trade-in appraisals: Auto dealers use services such as Black Book and Manheim for data for the trade-ins, and those automatically reduce the value of the vehicle with an accident record in the file.
Restrictive financing: Some financing institutions impose limitations on financing a car with a history of accidents, thus reducing the number of potential buyers.
The Connection to Diminished Value Claims
It’s here that the loss becomes compensable. If an accident on your Carfax® report means your car’s market value is reduced, but you’ve already paid for any repairs made, then your car is suffering from a phenomenon known as diminished value. And according to Florida state law, if it was not your fault, you can usually make a claim against the insurance company of the person at fault.
The fact that your Carfax® shows an accident makes that claim very hard to deny, as it’s third-party documentation that your car now belongs to a reduced valuation bracket.
Usually, a diminished value claim involves determining the value of your vehicle before the accident, its value after the repair based on the Carfax® report, and how much money there is between the two.
What Florida Drivers Should Do Next
- Run your own Carfax® and AutoCheck reports. Verify the actual wording and the level of damage stated for your vehicle.
- Keep all of your repair receipts. Having detailed invoices and before-and-after pictures helps make your case.
- Have your vehicle appraised for diminished value. Putting a concrete price tag on your loss helps you make your case.
- Consult an attorney before accepting a settlement. Insurance companies do not often willingly pay out for diminished value losses.
If your car has been in an accident listed on your Carfax®, it represents an event where money changed hands, not just paper. Florida has a statute in place allowing recovery of your diminished value loss after an accident that wasn’t your fault.
Frequently Asked Questions
1. Does every accident show up on Carfax®?
Not necessarily. Carfax® will only show accidents that are documented through their data sources, including insurance claims or participating repair shops. An accident settled out-of-pocket will not be on Carfax®.
2. Can I get an accident removed from my Carfax® report?
In rare instances like wrong-vehicle flags or incorrect severity classification, you would need a written notice and supporting documents. However, if the accident really took place, then Carfax® does not remove it.
3. Does a minor accident still hurt resale value?
Yes, but to a lesser extent. Even an entry stating only cosmetic damage lowers the resale value of the car since buyer and dealer systems make a deduction based on the accident report.
4. How is the diminished value different from my repair claim?
The former refers to the repairs for the car, while the latter is a reduced resale value due to the presence of accident history.
5. Can I still file a claim if I plan to keep the car?
Yes. One does not need to sell the car to have a diminished value claim. This lowered market value becomes evident when the accident is noted.
6. How long do I have to file a diminished value claim in Florida?
Generally, Florida State provides several years, but claims made sooner get a favourable response from the insurers. Talking to a lawyer after the accident will strengthen your position.