How to calculate diminished value

Let’s face it: no matter which way you slice it, car accidents are never fun.

On top of dealing with repairs and insurance, getting into an accident – even if your car is repaired perfectly – automatically lowers the value of your vehicle.

When you get into an accident, a Carfax report is created that’s available for anyone and everyone to see.

This report shows that your car has been involved in an accident, and when you go to sell your car, it will make your vehicle less attractive than a vehicle of the same make and model that’s never been in an accident – even if the damage to your car from the accident is undetectable.

In order to sell, you’ll have to lower your price to stay competitive, which means hundreds (or even thousands of dollars) out of your pocket.

But you don’t have to lose money on your car when you get into an accident, thanks to a little something called diminished value.

What is diminished value?

If you’re not familiar with diminished value, according to Wikipedia, the definition is “the economic loss in a property’s value as a result of having been damaged;” in this case, your vehicle.

So, when you get into an accident, the diminished value is the decrease in value of your car because of the damages caused by the accident.

How much value does a car lose after an accident?

The depreciation value of a car after an accident can vary greatly; obviously, a minor fender bender that scratches your bumper is going to cause a smaller loss in value than a major accident that completely totals your vehicle.

If you want to protect the value of your vehicle, it’s important that you get professional support and calculate car value after the accident.

Many drivers end up walking away from hundreds or thousands of dollars they’re rightfully owed simply because they didn’t take the proper steps to protect themselves, their vehicles and their investment.

How do you calculate diminished value?

There are two ways to calculate diminished value that you need to know about: the way insurance companies determine diminished value and the actual diminished value of your car.

Most insurance companies use what’s known as the “17c formula for diminished value.”

The formula got its name from the State Farm diminished value claim where it was first used and refers to the area where it appeared in court records: paragraph 17, section c.

After the formula was used in this particular case, it quickly became the industry standard diminished value formula for insurance companies.

The 17c formula is as follows: Base Loss of Value (which is calculated at 10% of the current Kelley Blue Book value) X Damage Modifier X Mileage Modifier = Diminished Value.

The 10% is the maximum amount the insurance companies will pay out on your vehicle; no one is exactly sure where this 10% number came from, but it’s been widely adopted as the go-to maximum payout for these kinds of claims.

The damage modifier has to do with – you guessed it – just how damaged your car is following the accident.

Interestingly, insurance companies only take structural damage into consideration when determining diminished value, not mechanical damage.

So the only damages that count towards your diminished value have to do with the structure of your vehicle.

The damage modifiers are as follows:

  • Severe structural damage: 1
  • Major damage to structure and panels: 0.75
  • Moderate damage to structure and panels: 0.50
  • Minor damage to structure and panels: 0.25
  • No structural damage: 0.0

The mileage modifier adjusts the diminished value of your car based on how many miles have been put on the car.

Obviously, the higher the mileage, the lower the value.

The mileage modifiers are as follows:

  • 0 – 19,999 miles: 1
  • 20,000 – 39,999 miles: 0.8
  • 40,000 – 59,999 miles: 0.6
  • 60,000 – 79,999 miles: 0.4
  • 80,000 – 99,999 miles: 0.2
  • 100,000+ miles: 0

So, for example, let’s say you were driving a car with a Blue Book value of $15,000 that had 36,000 miles and moderate structural damage.

Your 17c formula would look like this:

$1500 (10% of the Blue Book Value) X .50 X .8 = $600

So, according to the insurance company’s diminished value calculator, your diminished value would be $600.

But that’s not the ACTUAL diminished value of your car.

To figure out the real diminished value, you’ll need to do a bit of detective work.

First, find out the value of your car pre-accident; again, you can find this information on Kelley Blue Book.

Then, you need to calculate the value of your car post-crash.

Most law firms get their estimates by multiplying the original value by .33.

You can also look at cars of a similar make and model that have been in accidents to get a ballpark estimate of how much your car is worth.

Then, subtract the post-accident value of your car from the pre-accident value of your car and that will give you the actual diminished value.

So, using the example from earlier, let’s say your car was worth $15,000 before the accident:

  • $15,000 – ($15,000 X .33) = $10,050
  • $15,000 – $10,050 = $4,950

So, with this example, the 17c diminished value of your car was $600 but the actual diminished value was $4,950.

The insurance companies – whether it’s your insurance policy or someone else’s – are always going to try to pay out the least amount of money possible; that’s how they stay in business.

Which is why it’s so important to screenshot this free diminished value claim calculator: when you’re armed with the right information, you won’t leave thousands of dollars on the table by accepting the insurance company’s 17c offer.

And with all this information available for free online, there’s no reason not to get the most out of your claim.

How do you file a diminished value claim?

That’s where Loss Value Recovery Specialists come in.

We’ll work with you on your diminished claims to get a diminished value payout that makes sense for you, not the insurance company.

We’ll handle the entire process and even negotiate with the insurance company – all you have to do is sit back and wait for your check.

Have questions on how to calculate your diminished value? Ready to get started?

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Blog/ Calculating Diminished Value

Are you ready to sell your used car but don’t know where to start? Are you worried that the car is in such bad shape that no one will take it off your hands? Was your vehicle involved in an accident and you don’t know how much that will impact the price? Luckily, there are accurate methods to gauge the value of your vehicle, no matter what shape it’s in. By using our free diminished value calculator, you will be able to determine the value of your car based on its condition and other criteria. Even if your vehicle is damaged or old, it has some value. We’re here to help you determine how much so you can be free of this “dead weight” in your life and walk away with some cash.

Why do car values diminish?

Cars are designed and built to be durable, but as with every commodity, age and use alters their value over time. Unless it’s a highly sought-after vintage model, most cars lose value over time, also known as diminishing value. This is because newer models are worth more and because the wear and tear on the vehicle makes it less reliable in the long run. The more you’ve driven your vehicle, the less value remains. Picture it this way: when you buy a car, you’re buying a certain amount of useful life. You expect new cars to be reliable, with proper maintenance of course. Used cars are much cheaper because you’re only buying a portion of the car’s overall useful life. Every year and every mile diminishes the car’s useful life and its value will eventually approach $0.

Can I still get a good price if my car has been involved in an accident?

What happens if your car has been in one or more accidents or is totaled? Accidents will diminish the value of your car more than normal wear and tear. Even if a car is repair to visually perfect condition after an accident, accidents are recorded in a car’s history and will affect its value. The best repair work isn’t considered restoring the car to its original, factory-made condition, because it’s not as easy to regulate or control the quality of the repairs compared to the conditions one would generally see in an auto factory. While damage due to accidents will certainly impact the overall value of your vehicle, there are ways to confidently calculate how much this damage will cost you financially.

Where can I find the original value of my car?

First of all, you should look up the estimated value of your vehicle via Kelley Blue Book or another reputable source. The Kelley Blue Book will give you a general value estimate based on your car’s make, model, year and condition. The Kelley Blue Book is seen as an impartial guide for pricing new and used vehicles and is a good big picture guide to your car’s value. It can be used to compare prices for used and new cars in various conditions, and is a useful guide for buyers and sellers alike.

How can I determine the value of my used/damaged car?

Once you know the original value of your vehicle based on the Kelley Blue Book estimate,you can use the 17c formula to determine your car’s value after an accident or continuous use. The 17c formula is an industry-wide standard that is considered a reputable way to calculate a car’s worth, including any diminished value from damage due to accidents. The 17c formula takes both damage and mileage into account to determine a car’s diminished value. To start, look up your car’s original value (pre-accident). From there, you will apply multipliers based on a 10% depreciation cap, damage and mileage. The 10% cap comes from the insurance industry standard that assumes that your car’s value will not have depreciated more than 10%. The damage multiplier is on a scale of 1.0 to 0.0, 1.0 being severe structural damage and 0.0 being no structural damage or replaced panels. This damage multiplier descends to 0.0 and is based on benchmarks such as 0.25 (minor structural damage). The key criteria here is whether the repairs pose potential risks to future drivers in the case of additional accidents. If a car’s body or structure are damaged, the vehicle may not perform as well during another accident. This is less of a risk if the damage is limited to a damaged bumper or cosmetic scrapes. Finally, the mileage multiplier is also a 1.0 to 0.0 scale, but it descends in increments of 0.2. Each 0.2 increment represents 20,000 miles. So if your car has 60,000-79,999 miles, you will apply a multiplier of 0.4.

Example Diminished Value Formula:

If your car was originally worth $15,000, was involved in a minor accident with minor damage to the structure and panels, and had 24,000 miles on it, the 17c calculation would look like this:

$15,000 (original value, pre-accident) x 0.10 (10% depreciation cap) x 0.25 (minor structural damage) x 0.8 (24,000 miles) = $300

Age, the accident and mileage depreciated the car by $300, so the car’s value is now $14,700. If the car was involved in a serious accident with major structural/body damage, the damage multiplier would have been 1.0 instead of 0.25 and the car would have depreciated by $1,200, making the car’s value $13,800 instead. The severity of the damage in an accident and the miles driven will impact the car’s value based on the maximum depreciation of 10%. With this calculation, you can be confident that you are getting the best possible price for your vehicle, no matter what shape it’s in.

SellMax can help you sell your used/damaged car today!

Selling a damaged car can be stressful, especially if it’s been involved in an accident, but this doesn’t need to be the case. SellMax is here for you whenever you’re ready to sell your car for cash, no matter what shape it’s in! With our free diminished value calculator, you can expect to receive fair, honest pricing from us. If you are looking to sell your used car with a diminished value, contact SellMax right away. We’ve got offices throughtout the United States in areas such as Los Angeles, and Miami. Why hesitate when you can exchange your unwanted vehicle for a stack of cash? With so much uncertainty in the world right now, let SellMax make one thing in your life hassle-free.

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A car accident that damages a vehicle will instantly ‘diminish’ the value of the car. If you need to regain some of this lost value you can sell your damaged car for a fair market price quickly online.

It comes out of nowhere. You’re driving along, singing along to the latest Miley Cyrus tune on your cranked-up radio. Suddenly, your world is a mess of broken glass, crunching metal, and deflating airbags. In just a split second, you’ve begun the arduous and unwanted task of getting your car fixed and recouping the costs.

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When you insure your car, you glance over the fine print and jump to the signature. It’s all there, right? And since you don’t actually expect to have an accident, you haven’t considered the implications of what you’re signing. But one of those sections probably tells you all about diminished value.

How to Calculate Depreciation Value of Car After An Accident

How to calculate diminished valueDiminished value, also known as inherent diminished value, is most easily explained with a scenario.

Car 1 and Car 2 are identical in every way – mileage, color, year, make, and model. They are both valued the same, understandably. Let’s say it’s $10,000.

Car 1 gets into an accident, and it’s pretty significant frame damage. But it gets fixed, and it looks good as new once again. But on the vehicle history report, there’s now a big difference that will never disappear.

Now, you have that same choice between buying Car 1 and Car 2. Which one do you choose? The answer every time will be Car 2, the one that has never been in an accident.

Car 1 will need to be sold at a lower price, otherwise everyone will always choose Car 2 instead. It has a diminished value, which is the difference between the two cars’ prices. It isn’t the car’s actual selling price, but rather, the lost value of a car after an accident and after the expensive collision repairs.

What is The Lost Value of Car After Accident

Since the diminished value assessment is based on the current market price of the vehicle, and the accident damage variable, it’s very difficult to create an extremely accurate diminished value claim calculator. Diminished value formulas might not be accurate, since you could potentially sell the car for more than your insurance company is saying. This leaves money on the table for you when comparing your damaged car sale value to an average diminished value settlement.

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What is The Average Diminished Value Settlement?

If you’re asking, “Are diminished value and depreciated value the same?”, the answer is NO. Depreciated value is a comparison against the vehicle’s own value.

For example, a one-year-old car might have a value of $20,000. Just due to normal wear and tear, accumulated mileage, and age, the same car might only be worth $10,000 a few years later. Diminished value is a sudden change, like an accident.

Depreciated value is often called the car’s NADA value. NADA publishes used car values along with their average selling price every month for dealers. You can also access a NADA car value online for yourself.

Here’s How to Determine Diminished Value After Accident

You’d be surprised at the diminished car value after an accident for newer cars. But as a car gets older, the diminished car value is much smaller.

How to calculate diminished valueMost insurance companies use a rule known as 17C for a diminished value calculator. It considers the car’s value before the accident and applies factors to arrive at a diminished value appraisal. Factors include:

A base loss value compared with its NADA value, typically 10%.

A major damage multiplier on that number.

A deduction based on the car’s mileage.

Your insurer may have their own calculation for diminished value. One thing you can count on is that they’ll always work to the insurance company’s benefit, not yours. Prepare to battle it out with your insurance adjuster to get a fair diminished value claim, which will get paid out to you.

How to Sell Damaged Car After Accident

You have a car that doesn’t have its full value anymore. It’s not like the typical car depreciation rate either – your car suddenly is worth less, but not worthless. What can you do about your car’s lost value?

How to Find Out Loss of Value Claim After Accident

You’re likely entitled to a diminished value claim through your insurance company. But take note of your policy information – you are probably only entitled to get paid if the accident wasn’t your fault.

In any case, start with your insurance company. Contact your representative to figure out how to start the diminished value claim, and get a diminished value appraisal near you. It might net you a few hundred bucks, or more if the accident was serious and your car was primo.

But after you settle your diminished value claim, you’re still stuck driving a car with a serious value problem, and it may be difficult to sell your car fast.

How to calculate diminished value

Get A Diminished Value Estimate With Our Instant Diminished Car Value Calculator

If that doesn’t sit well in your craw, think about selling your car a different way, like perhaps on a car buying website. If you have diminished car value, it’s not going to be easy to sell it like you normally would. When someone asks for a vehicle history report, it’s going to be on full display in big bold letters that your car has been in a serious accident. You might have a few people interested until they find out about the accident, then disappear on you.

Don’t have time to sit around, waiting to sell your car? Give CarBrain a shot. It’s easy, it’s fast, and it’s free. Just enter your vehicle information into CarBrain’s proprietary system along with some details about its condition, and you’ll receive a guaranteed offer. If it looks good to you, accept the offer, and CarBrain will put money in your hand. We’ll even pick up your car wherever it is, at no cost to you. Get your offer to see how much your car is really worth now.

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If you’ve been involved in a car accident, your car will inevitably have some damage that will need to be repaired. Even though the repairs to your car will help your vehicle look and drive better, they will still leave “evidence of repairs.” Unfortunately, the evidence of the repairs will diminish the value of your car if you try to sell it again. This is called “inherent diminished value.”

For guidance in navigating the insurance claim process or litigation after a car accident, contact a Fort Worth personal injury lawyer at Anderson Injury Lawyers. To schedule a free consultation of your case, call us today at 817-294-1900.

Insurance Company Offered $4,000, We Fought and Won $45,000

The Law on Diminished Value in Texas

Texas law says that you must disclose any accident history when you sell a car. Usually, car buyers aren’t willing to pay full price for a car that’s been in a serious accident. The reason for this is that any potential buyer is inevitably going to consider your car of lesser value since they are aware that your vehicle has previously been involved in a collision – even if your car displays no obvious damages.

Other common examples of diminished value in automobiles include repair-related diminished value, where work done by the repair shop was flawed (e.g. color match problems) or claim related diminished value (where an insurance company refused to pay for all necessary repairs).

When You Can Make a Diminished Value Claim

In order to determine the amount of inherent diminished value in your case, you can subtract the value of your vehicle after all repairs are completed from the total value of the vehicle before the crash occurred. Generally, if the car was worth more than $10,000 before the collision and the cost of the repairs was greater than $4,000 you have a good case for a diminished value claim. Remember, however, that the statute of limitations in Texas (the deadline by which you must make a claim) is two years from the date of the accident, just as with personal injury claims.

You can still make a diminished value claim even in situations where the at-fault driver is not insured, provided that you carry uninsured motorist coverage. A good lawyer will be able to help you identify any existing insurance which you can make a claim against.

If your car is a lease vehicle, you should consult with your lease company to discuss the matter with them. In some cases, they will pursue a diminished value case on your behalf, but in most cases it will be up to you to do so. If the latter is the case, you must obtain a written authorization before you can begin your claim.

How to Calculate Diminished Value that is Fair for Your Car

Most auto insurance companies will have their own formula they use to determine the “fair value” of a wrecked motor vehicle. Unfortunately for you, most of these are geared towards paying you less than you actually deserve. The truth is that any time a worksheet or pre-determined formula is used to assess the total dollar amount of a loss, it’s going to be insufficient since every case is different.

Fortunately, under Texas law any such formula is not acceptable on its own merits – it is only acceptable if you deem it acceptable, which you have absolutely no obligation to do. In order to determine an accurate diminished value for your wrecked car, you must take into consideration every relevant factor, including:

  • Damage that the vehicle sustained
  • Cost of vehicle repairs
  • Quality of repairs that were made
  • Cost of comparable vehicles in pre-crash state
  • Past market trends
  • Future market trends

17c Diminished Value Calculation Formula: Unfair Appraisals

Fraction Valuations of Totaled Vehicles

The 17c Formula is by definition a fraction or calculated value formula which simplifies things enormously in order to come up with an easy figure. Another example of a fraction or value formula is the depreciation calculator used by the IRS when evaluating the value of business vehicles. The 17c Formula specifically considers the following components when assigning a value to your loss:

  • Base loss in value
  • Mileage modifier
  • Damage modifier

Don’t Use a 17c

One of the most common worksheets used under different guises by many of the major auto insurance companies is the 17c Formula. This formula was developed as part of a 2001 class action lawsuit that settled in the Georgia Supreme Court. Part of the ruling involved using a generic formula to determine the amount of compensation paid to each of the plaintiffs in the case. The formula was included in paragraph 17, section “c” of the ruling, which is where Formula 17c gets its name from.

However, 17c should not be applied to any property damage claim outside of that specific lawsuit. The Georgia Insurance commissioner has repeatedly stated that 17c is not a legal or final determination of Diminished Value or Total Loss. Despite this, many insurance companies throughout the US (including Texas) continue to cite it as precedent.

17c is erroneous it can be easily defeated.

Call Now For Help With Diminished Value

Looking For A Free Diminished Value Claim Calculator?

Have you been searching for a Diminished Value calculator, a website that will give you at least a remotely accurate estimate of what you might be able to expect if you won a settlement? The question you need to ask yourself is whose interests do they have in mind? Are they going to spit out an estimate that represents the maximum you deserve or will it be much lower and more palatable for your insurance company?

Better Yet, Try Our Diminished Value Calculator!

Our diminished value calculator isn’t engineered to give the lowest possible amount. We make estimates based on our knowledge of the industry and successfully filed claims. This can be used to estimate potential diminished value that you are entitled to.

Contact The Real Diminished Value Experts


Even if the site that is giving you a diminished value caculated estimate isn’t controlled by the insurance industry, it’s still likely you are getting an inaccurate figure derived from a simple formula based on Kelley Blue Book adjusted for rough damage estimates. Good for the insurance company, but not so much for you.

The trick is to have a diminished value expert who finds that “sweet spot” that doesn’t creep into the realm of unrealistic expectations. If you’re gunning for too much, you will either delay your settlement or not get one at all.

Autoloss will review your vehicle repair expenses and what kind of damage has been done. We determine the appropriate diminished value figure to present to you and your insurance company, but not until additional details are considered.

Much more goes into calculating the diminished value of your vehicle. What is the vehicle market like in your area? What kinds of vehicles are in demand and what are not? We will present market data to support your case and the argument for why you deserve the amount we have come up with.

Don’t be fooled by a computer-generated formula that either gives too high or too low of an estimate, without the supporting documentation needed for a successful diminished value claim. Your insurance adjuster will want you to produce the methodology that was used in determining the figure you are seeking.

The difference between a diminished value claim settlement won by Autoloss and what you see on a random diminished value calculator can very well be in the thousands of dollars. That’s a mistake you can’t afford.

After an accident, the insurance company should pay you for the cost of repairs. But even though you can repair your vehicle, it still has an accident history. In other words, there’s no such thing as “as good as new” when it comes to damaged vehicles.

When an accident occurs, and your vehicle is totaled, the insurance company pays you for the value of the vehicle immediately before the crash. But if it’s reasonable to make repairs, the insurance company should pay for the repairs. When they pay for repairs, they should also pay you an additional amount. That additional amount should compensate you for the fact that your vehicle has an accident history and isn’t worth what it was worth immediately before the accident. Our car accident lawyers explain what you need to know about how to calculate the diminished value of a vehicle in Colorado.

What Is Diminished Car Value?

Diminished car value is the loss in value that your car has because of an accident. It’s not the cost of repairs. Diminished car value accounts for the fact that you can never remove the circumstance that your vehicle has an accident history. It is the loss in value that occurs because a car that has been in an accident doesn’t have the same market value as an accident-free car.

Diminished Car Value

It’s easy to confuse the diminished car value with the cost of repairs. They’re different things. The cost of repairs is what it takes to get your car into working condition again. Actually, it minimizes the diminished value of your car by restoring it to the best condition possible.

Diminished value is the reduction in the market value of your vehicle that’s inescapable because of the car’s accident history. Although it’s tied into replacement costs for even minor damage like that caused by a rear-end collision, diminished value is separate and in addition to the costs of repairs after an accident.

How Do You Calculate the Diminished Value of a Vehicle?

To calculate the diminished value of a vehicle, you take the following steps:

  • Determine the value of the vehicle immediately before the accident.
  • Determine the value of the vehicle after repairs.
  • Subtract the amount after the accident from the amount before the accident.

The remaining amount is the diminished value of a vehicle.

How Does an Insurance Company Determine the Value of Your Car?

An insurance company has several methods to determine the diminished value of your car. They might look at third-party resources like Kelley Blue Book and Edmunds. In addition, the insurance company might look at other, similar vehicles that have recently sold in the area. They may consider the price that you paid for the car as well as wear and tear, major repairs, and any accidents that have happened since you bought the vehicle.

Remember, they’re determining the value of your car before the accident. They don’t look at the cost to replace the vehicle or even what you paid for the vehicle when you bought it. Instead, the insurance company wants to know what your vehicle was worth on the day of the crash compared to what it’s worth now.

How to Calculate Diminished Value in Colorado

To calculate diminished value in Colorado, calculate the fair market value of the vehicle both before and after the accident. Look at the market value of the vehicle after you make repairs. Colorado law allows accident victims to collect diminished value compensation. You should add an amount for diminished value and include it in your claim for compensation along with your claim for the cost of repairs.

How to calculate diminished value

Colorado Diminished Value Claims

Colorado has a long history of allowing diminished value claims in third-party car accident actions. When you’re the victim of a car accident, you may bring a claim to the insurance company of the driver at fault for the accident. Colorado law allows you to collect compensation not only for the costs of restoring your vehicle to a drivable condition but also for the fact that your vehicle is reduced in value.

In fact, the Colorado Supreme Court has affirmed the right to collect for diminished value in two old, long-standing cases that are still valid law today. In the Trujillo v Wilson case from 1948, the court said that repair costs are separate from diminished value. The court noted that the State of Colorado recognizes diminution of value claims in a third-party car accident tort claim. Likewise, in the 1923 case, Larson v Long, the court said that diminished value is a necessary element of damages to recognize and account for the fact that a vehicle has been in an accident.

How to Get the Most for Your Diminished Value Claim in Colorado

Remember that the insurance company is contractually obligated to pay claims fairly and in good faith. If they refuse to pay your claim in good faith, you don’t have to give up. You can negotiate with the insurance company. You can also bring a claim in court for fair compensation as long as you do so within Colorado’s statute of limitations.

When you don’t think the insurance company is offering you fair compensation for diminished value, you can provide the insurance company with additional information. Let them know why you believe they’re not valuing your vehicle fairly. Sometimes, the insurance company reconsiders and offers you a fair payment. Other times, you need to file a formal claim for compensation in a Colorado court.

How Our Denver Attorneys for Car Accidents Can Help

Have you been in a car accident? Is the insurance company trying to give you the run around when it comes to diminished value? You have rights. Our Denver injury lawyers can help.

When you work with the legal team of Bachus & Schanker, LLC, you get a trained, experienced, and passionate team of advocates fighting for you. We know how to help the insurance company recognize that they owe you fair payment for your diminished value claim and any car accident injuries you may have. We don’t stop until you have the compensation that you deserve.

We are a fully equipped law firm devoted to representing deserving accident victims. Call us today for a free and confidential consultation about your claim.

The primary reason an individual would need to calculate the diminished value of a car is to submit an insurance claim after an accident. Naturally, if a car can no longer run or has undergone significant cosmetic damage, it isn’t worth as much.

Regardless of who is at fault or if it is your insurance company or another’s who must reimburse you for the value of your vehicle, it is in the insurance company’s best interest to calculate the lowest value possible for your car.

Most insurance companies use a calculation known as “17c” to arrive at a monetary value for your car in post-wreck condition. This formula was first used in a Georgia claims case involving State Farm and derives its name from where it appeared in the court records for this case – paragraph 17, section c.

Formula 17c was approved for use in that particular case, and it didn’t take long for insurance companies in general to pick up on a tendency to arrive at a relatively low value using that calculation. As a result, the formula was widely adopted as an insurance standard despite the fact it only applied to that one Georgia claims case.

After an accident, however, you will benefit more from a higher diminished value number. That’s why it is important to know both how the insurance company paying your claim will arrive at your car’s current value and its actual value if you were to sell it in its current condition. If, after calculating diminished value for your car in both manners, there is a large discrepancy between the numbers, you may be in a position to negotiate a better deal.

Method 1 of 2: Use formula 17c to learn how insurance companies calculate diminished value

Step 1: Determine the sales value of your car. The sales, or market, value of your car is the amount which NADA or Kelley Blue Book determines your vehicle is worth.

While this is the number most people would think is pertinent, it does not take into account how worth changes from state to state as well as other factors. The number arrived at in the manner is also not in the insurance company’s best interests.

To do this, visit the NADA or Kelley Blue Book website and use the calculator wizard. You will need to know the make and model of your car, its mileage, and a relatively good idea of the extent of damage to your vehicle.

Step 2: Apply a 10% cap to that value. Even in the State Farm claims case in Georgia that introduced the 17c formula, there is no explanation for why 10% of the starting value determined by NADA or Kelley Blue Book comes off automatically, but it is a cap that insurance companies continue to apply.

So, multiply the value at which you arrived through the NADA or Kelley Blue Book calculator by .10. This sets the maximum amount the insurance company can pay on a claim for your car.

Step 3: Apply a multiplier for the damage. This multiplier adjusts the amount you arrived at in the last step according to the structural damage to your car. It, interestingly, does not take into account mechanical damage.

This has to do with whether parts have to be replaced or repaired on the vehicle; the insurance company only covers what can’t be fixed with a new part.

If you think this is confusing, it is, and it doesn’t provide you compensation for lost sale value. Take the number you arrived at in step two, and multiply it by the following number that best describes the damage to your car:

  • 1: 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

Step 4: Deduct more value for the mileage on your car. While it makes sense that a car with more miles is worth less than the same car with fewer miles, the 17c formula has already taken the mileage into account in the initial value determined by NADA or Kelly Blue Book. Unfortunately, insurance companies deduct value for this twice, and that worth is $0 if your car has more than 100,000 miles on the odometer.

Multiply the number you arrived at in step three by the appropriate number from the list below to arrive at the final diminished value of your car using the 17c formula:

  • 1.0: 0-19,999 miles
  • 0.80: 20,000-39,999 miles
  • 0.60: 40,000-59,999 miles
  • 0.40: 60,000-79,999 miles
  • 0.20: 80,000-99.999 miles
  • 0.00: 100,000+

Method 2 of 2: Calculate Actual Diminished Value

Step 1: Calculate the value of your car before it was damaged. Again, use the calculator on the NADA or Kelley Blue Book site to estimate the value of your car before it was damaged.

Step 2: Calculate the value of your car after it was damaged. Some law firms multiply the “Blue Book” value by .33, and subtract that amount to find the estimated post-accident value.

Compare this value with similar cars with accident histories to find an actual value of your car. Say, in this case, similar cars on the market were in a range of $8,000 to $10,000. You might want to even your estimated value after accident out to $9,000

Step 3: Subtract the value of your car post-accident from the value of your car pre-accident. This will give you a good estimation of the actual diminished value of your vehicle.

If the diminished values determined by both methods are wildly different, you may wish to confront the insurance company responsible for reimbursing you for your car’s loss in value as a result of the accident. Bear in mind, however, this will likely slow the payment of your insurance claim and you may even need to hire a lawyer to be successful. Ultimately, you must decide if the extra time and hassle is worth it to you and make an appropriate decision.

This article originally appeared on as How to Calculate the Diminished Value of Your Car.

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How to calculate diminished value

Our Durham Diminished Value Claim Attorneys and Greensboro Diminished Value Claim Attorneys are often asked about what formula is used to determine the diminished value of your car (for some background on North Carolina diminished value claims, click on the following links (which are links to prior blog posts that discuss diminished value): diminished value car claims in nc, diminished value claim lawyer nc, diminished value claim north carolina, diminished value claims in nc, diminished value laws in north carolina, diminished value of vehicle in north carolina, diminished value vehicle north carolina, diminishment of value in north carolina). A lot of folks believe that the diminished value is based on a percentage, and we get the number 25% a lot. To be clear, there is no formula used in North Carolina to determine the diminished value of your vehicle, and 25% is not a common number in diminished value claims (we think 25% comes up because that is the threshold used in the North Carolina Damage Disclosure Law, which is an entirely different concept (you are required to disclose damage exceeding 25% of the value of your car when you sell a car 5 years old or newer)).

The value of your diminished value claim is equal to the difference between the fair market value of your property immediately before it was damaged and its fair market value immediately after it was damaged. Fair market value is defined as the amount which would be agreed upon as a fair price by you when you wish to sell, but are not compelled to do so, and a buyer who wishes to buy, but is not compelled to do so.

To get an idea of how damages are calculated in a Diminution of value case, look at the following cases: Cockman v. White, 76 N.C. App. 387, 391, 333 S.E.2d 54, 56 (1985); U.S. Fidelity and Guaranty Co. v. P. and F. Motor Express, Inc., 220 N.C. 721, 18 S.E.2d 116 (1942) and Roberts v. Pilot Freight Carriers, Inc., 273 N.C. 600, 160 S.E.2d 712 (1968). If you can’t find a copy of the cases, send us an email and we’ll send them to you in an email.

Unless you had an arm’s-length contact to sell your property immediately before your property damage and immediately after (I’ve never seen this), then the main way to determine what the fair market value (according to the definition above) of your car was prior to it being damaged is through an appraisal (either from a licensed motor vehicle appraiser or even better a used car dealer’s opinion on what your would have sold for).