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What does a previous accident do to my car’s resale value?

08 Sep 17
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My car was rear-ended, causing a small crack to the back bumper. The fix was about $5,000 and now my car looks brand new. But when I try to sell it (I will sell privately because I will get more than when I tried to trade it in at a merchant), what will the car history report show? Can it show that $5,000 claim? And does this mean I am pretty much stuck losing that money when I sell that, realistically? — Cole, Edmonton

When you are selling a car that has been in a crash, it’s easy to feel as if you are on the losing side of history.

However, a record of the harm does not necessarily mean that you’ll have a hit for this full amount when it is time to market.

“I had a Tahoe that I scraped a railroad column and had an $1,800 damage claim to repaint the 2 doors,” said Joe Varkey, vice-president of marketing for Carproof. “If I went into a dealership or a respectable body shop and had it repaired, those doors are like new — by no means does this decrease the value of my vehicle by $1,800.”

What exactly does a vehicle history report from Carproof or Carfax — that have been owned by the same U.S. firm since 2015 — really show? It depends upon what they can find.

“To the extent we have this information available, we would report the date of this incident, the price estimated or compensated for the repairs and other expenses, the city and state of the episode, and a few details of the nature of this damage/incident,” Varkey said.

So, your $51.95 Carproof report may show that $5,000 claim. Or it may just reveal the initial quote from the repair shop — that could be lower or higher than the true cost to fix.

When there’s structural damage, the report must show it but it may not, said George Iny, manager of the Automobile Protection Association (APA).

“The reports do indicate when structural damage, but the data isn’t always reliable and moderate structural damage is occasionally missed,” Iny stated.

Missing history?

Services like Carproof are not foolproof, Iny stated. “The most likely mistakes we see would be the wrong point of impact — left back, when it needs to be left {},” Iny stated “[Or] the quote doesn’t have any connection with the damage observed. … it could be inflated compared to the real damage.”

In an investigation four decades back, the APA found that Carproof was more precise than Carfax. Carproof showed about 75 percent of real fixed damage in Ontario and 90 percent in British Columbia, where it included data from the Insurance Corporation of British Columbia. But both missed asserts, Iny stated.

“We have always told people that there is differing amounts of data based on whether it is police-reported,” Varkey said. “The best way to protect yourself is Carproof and a review — so if you are considering purchasing, take it to a trusted mechanic to tell you how well it had been repaired.”

What is your deal?

Even if harm from a fender-bender is repaired perfectly, somebody contemplating buying you car might observe the crash for a means to get a better deal.

That reduction in your car’s value is known as diminished value and while insurance companies in certain American states pay for it, insurers in Canada .

There are diminished-value calculators available — often to get a price — online, which state they reveal what a U.S. insurer might pay out. When there’s no structural damage to the automobile and it is only a panel replacement, then it .

What exactly does any of this have to do with what you can get for your car if you sell it on Kijiji?

Probably not much. Negotiating a selling price is determined by convincing the buyer that the car’s in top shape — and that the damage was minor.

The price is right?

That is what car dealers do. And they are good at it.

“You can go buy a used car in the dealer and they’ll say, ‘Yes, there is this claim but here is the job order and you can see that there’s no structural damage,'” auto appraiser Maurice Bramhall said. “And then they’re going to sell it for a rather normal cost.”

So, once you’re selling it yourself, show the buyer the paperwork in the body shop — if you’ve got it. Even better? Enable them to see themselves that it really was only a crack in the plastic.

“The best would be to demonstrate the buyer photos of the damage before it had been repaired,” Iny stated. “So their creativity does not run wild.”

So, how much of a hit will you’ve got to take?

“It varies case by case back to my case, $1,800 on a Tahoe means a completely different thing than $1,800 on a BMW,” Varkey said. “If I am selling you my Tahoe for $20,000, you might say, ‘It seems like it was painted nicely, but I think you should sell it for $19,000.'”

Supplying the buyer together with the report and inviting them to get an inspection, shows that you are not hiding anything, Varkey said. That goodwill might assist in the discussions, he said.

“You could not be more transparent,” Varkey said.

Disclose for relaxation?

Therefore, if the buyer does not request a history or inquire about mishaps, do you need to tell?

In Alberta, the Fair Trading Act says dealers can not misrepresent an automobile’s history — so if there has been an insurance claim on it, they need to inform you before you sign the contract. But that law does not apply to private sales.

“Private sales aren’t regulated,” said Cathy Housdorrf, spokeswoman for the Alberta Motor Vehicle Industry, the state’s motor vehicle regulator. “But if a dispute occurs, it’ll be a matter for the civil courts{}”

As a private seller, you are not required to volunteer your car’s been damaged in a crash, Iny stated.

“However, if requested by the vendor, they need to answer truthfully or they’d be responsible for the consequences,” he said. “In practice, [that is] difficult to perform.”

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Courtesy: The Globe And Mail

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