Media post: How does a diminished car value calculator work?

Any place on earth with a large population is bound to have a high density of vehicles, which leads sometimes to the unfortunate occurrence of accidents. In case of these, different companies like insurance or leading junk car buyers come to the aid of their clients. Often they offer solutions and tools like a diminished car value calculator according to JunkCarsUs.

But what exactly is this calculator and why is it so important in such cases? Let’s answer that very question and take a proper look at a diminished value calculator and how it works as well as their applicability!

What is it?

Insurance companies help compensate for the loss in the vehicle’s value, but to do that accurately, you would need to use a diminished vehicle value calculator. As of 2020, well over 5 million car accidents occurred in the US, resulting from a myriad of things and those who repair their cars spend quite a bit to salvage anything.

The diminished car value calculators prove invaluable in such scenarios, aiding in the assessment of the amount insurance companies should compensate. These tools determine the disparity in a car’s value before and after accidents, providing a quantifiable measure for fair compensation.

The idea is that if you were part of an accident and have repaired your vehicle, your insurance company will make up for you and compensate for damages. You just have to make a claim. This, of course, is provided if certain conditions are met on your part. As the calculator determines the diminished value of a vehicle after an accident, certain factors have to be considered as well:

– Type of repairs conducted

– Overall condition post-repair

– Extent of damage and so on

Types of insurances to calculate

It’s also worth noting that the insurance covering diminished car value is distinct from both gap and stated varieties. With gap insurance, coverage is meant if vehicles are financed for more than they’re worth, while the stated option is reserved for the value of upraised one-of-a-kind or historical automobiles.

When we speak about gap insurance, we mean a vehicle’s financed amount and its market value. At the same time, the stated option is designed for unique or historical cars, as example. Considering the elevated value beyond standard market assessments, each insurance is serving a distinct purpose in car disputes.

How calculators work

To better understand how these tools work, it’s best to understand the overall process of getting to that point. The process is summarized in five stages which are as follows:

– the repairs to the car were fully made after the accident

– you contact your insurance agent to receive guidance

– you contact a qualified and trustworthy third-party appraiser

– you have a trade-in value estimate written

– you have these said estimates and all paperworks submitted

– you have docs related to the diminished value claim submitted

Insurance companies usually have their calculator and for the most part, each one works similarly. For starters, four key components form the calculator and these are as follows:

– the car in question’s market value from a credible source, its basic price

– cap multiplier, which is usually 10 percent and it is used to find the highest possible diminished value

– damage multiplier, which is essentially a scale of damage from the least notable to the most severe (it can be assessed by a third-party)

– mileage multiplier, which is calculated along with the market mileage value

With the above in mind, the process can move along although it’s worth noting that oftentimes the insurance company representing the other company may be contacted. This, however, is rather complex and may require that someone else represent you.

How to approach the appraisals

Seeing as getting appraisals is the key aspect of this process, going about it the right way is advised. This entails going to the brand dealer of the car you own to get an estimated trade-in value. This, however, shouldn’t come from another third party, namely the dealer or repair shop with which the repairs were completed.

What’s more? You have to consider obtaining multiple appraisals from reputable sources and reliable companies. Try to make sure that the company has a good experience and knows how to estimate a car’s value properly. You can also document the details of the repairs made and present a thorough assessment to the insurance company. You need to provide any relevant documentation, for example, you can take repair receipts, show maintenance records and so on.

Claiming eligibility

All things related to the calculator can only be arrived at, if you are seen as eligible. If not, then the insurance company will not let you claim anything and thus, the diminished car value calculator won’t be used. Other things to look at are:

– who is at fault in the matter, because if any destruction was caused by you, then you’re not eligible

– it’s also worth noting that confusion may arise regarding which policy comes into play, especially when mistakenly associating diminished value insurance with either stated or gap varieties

– in such cases, consulting the insurance company for the sake of clarity is necessary

Another thing that you should know is that different policies approach the use of OEM parts (Original Equipment Manufacturer) differently with some allowing their use and others not. They may not permit it, possibly opting for aftermarket or generic parts instead.

Final thoughts

Because of just how common accidents are in the world at large, the information above is essential to know just in case you’re unfortunate enough to be in this situation. Knowing when you’re eligible to make a claim that gets you to the point where diminished car value calculators are used is key and it may differ across state lines. Otherwise, the process won’t proceed and you may in fact be under a different type of insurance.

All this, of course, can only be the case if proper research and consulting are done on your part to ensure that everything is to make it irrefutable. In any case, the above information will at least give you a heads-up on what to expect.