Diminished Value Calculator:
How Much DV Do You Have?
Even if a vehicle has been fixed perfectly after being damaged, it can still lose value. This is often referred to as diminished value.
Wondering how to calculate diminished value? We have the answers!
Calculating Diminished Value Takes Skill and Experience.
There’s a lot of misinformation circulating online about how diminished value should be calculated. There are no laws or regulations mandating the use of a particular formula, such as the 17c formula.
Diminished value is most accurately determined by researching the market for similar vehicles that have an accident history. By comparing the sale prices of these vehicles to those without an accident history, you can assess the discount buyers are applying due to the prior damage.
This approach helps establish a more precise figure for how much an accident has lowered the vehicle's market value, based on real-world selling trends. The more comparable vehicles you can find, the clearer the picture will be of the impact on the vehicle's value.
Now isn’t the time to entrust your diminished value claim to an inexperienced appraiser.
Insurance companies often challenge and reject appraisals made using canned software and/or questionable methods.
DVCHECK has over 25 years of vehicle valuation and insurance industry experience handling diminished value claims. We’re experts at calculating diminished value.
We specialize in helping car owners like you document their diminished value after an auto accident.
Before calculating diminished value, you must determine if you qualify for a claim.
You’ll typically meet eligibility requirements if the accident was caused by someone else, the vehicle is not leased, and there are no prior incidents or accidents on your car's record.
Is not leased (financing/car loans are okay)
Is less than 7 years old
Has less than 100,000 miles
Another driver was at fault for the accident
Does not have a previous accident history or, if it was in a previous accident, the prior damage was minor
If you meet the basic requirements outlined above, request a free estimate from DVCHECK. We will review your claim, do a preliminary diminished value calculation, and provide you with your estimated diminished value.
Request a Free EstimateA Quick and Simple Vehicle Diminished Value Calculator
Looking for a simple way to calculate diminished value?
Follow these steps for a basic calculation of your diminished value:
- Determine the book value for your car.
- If the damage is minor to moderate, figure 10% to 15% of the book value.
- If the damage is moderate to severe with structural damage, figure roughly 15% to 20% of the book value.
- For an airbag deployment, diminished value can be as high as 25% of the book value.
As a general rule, you should expect to recover 10% to 20% of the fair market value of your vehicle in most cases when filing a diminished value claim.
That means if your vehicle has a fair market value of $35,000, your diminished value could be in the range of $3,500 to $7,000, and possibly as high as $8,750 if the airbags deployed.
Insurance companies tend to place a lot of emphasis on the cost of repairs when calculating a vehicle’s diminished value. Typically, the biggest out of court settlements will be on claims with larger repair costs.
How Insurance Companies Use Formula 17c To Calculate Diminished Value and Undervalue Claims
The most well-known diminished value formula is the 17c formula. Created by State Farm in the Georgia class action lawsuit, Mabry v State Farm, this formula is sometimes utilized by insurance companies to calculate diminished value and comes equipped with several flaws.
The 17c formula takes 10% of the book value of your car and applies mileage and damage modifiers based on a scale.
Example calculation for:
- Vehicle worth: $23,000
- Mileage: 70,000 miles
- Damage: Moderate
$23,000 x 10% cap = $2,300 base value x .30 mileage modifier = $690 x .5 moderate damage modifier = $345 diminished value per the 17c formula.
Flaw 1: A 10% Cap
This is an arbitrary cap meant to control claim payouts.
Flaw 2: A Questionable Mileage Modifier
This modifier could be considered a double penalty or “double dip” for mileage (a car’s mileage was already accounted for when determining the book value).
Flaw 3: The Formula’s Damage Modifier
Selecting a damage modifier for the 17c formula is subjective and can lead to wide variations in the calculated amount. What one person considers major damage, another may consider moderate damage. In addition, there’s no evidence to support the notion that diminished value in the real world follows a linear mathematical scale resulting from the severity of damage.
Most people would view an accident vehicle the same way, regardless if the damages were $5,000, $7,000, or $7,700. That can lead to difficulties using this formula when you calculate diminished value.
Flaw 4: Doesn’t Address Important Vehicle Information
Using the 17c formula as a diminished value calculator doesn’t take into account vehicle class or negative notations that may be present in a vehicle history report such as CARFAX.
Vehicle class and CARFAX notations about an accident are two factors that can have an impact on the amount of value that a vehicle may lose.
For example, a structural damage notation on CARFAX would cause more diminished value than a minor damage notation.
In terms of vehicle class, minor paintwork on a Hyundai would not have the same impact on value as minor paintwork on a Lamborghini.
How Much Diminished Value Should You Expect To Recover?
Typically, people making a diminished value claim on a newer car receive higher settlements than the same claim on an older automobile.
Automobiles that have sustained more damage in an accident often receive higher settlements than those with minor damage.
Insurance companies tend to place a lot of emphasis on the cost of repairs when calculating diminished value. Typically, the biggest settlements will be on claims with extensive repair costs. Diminished value settlements are possible after your car sustains minor damage; however, more negotiating is typically required.
As a general rule, regardless of what diminished value calculator you use, expect your diminished value to be 10% to 20% of the fair market value of your vehicle.
Let Us Be Your Vehicle Diminished Value Calculators
Reach out for a free estimate from DVCHECK and we’ll review the specifics of your claim to calculate your diminished value. Your free estimate will give you a high-level estimate of how much money you can potentially recover for diminished value.
Because you’ll get a certified diminished value appraisal that uses market comparable vehicles, respected price guides, and backed by our many years of experience, it will be taken seriously both by the insurance company and in a court of law.
We’ll always be there to offer support, helping you throughout the claims process.
