Southwest Valuations


Diminished Value Diminished value occurs when a vehicle is damaged, normally as the result of a traffic accident. Let's assume you're shopping for a car and that you have located two which are exactly the same as concerns make, model, options, powertrain, mileage and color. Price for each is exactly equal. However, while conducting pre-purchase due diligence you discover that car "A" has been in an accident while car "B" has not. Which would you buy? The fact that car "A", even though it has been repaired to the highest industry standards, has suffered an "impairment of merchantability" or Diminished Value because both you and the market at large believe the car is worth less than an accident-free vehicle. Most insurance policies do not cover this accident repair facet. The fact is that even though a fully repaired car might look and drive as good as new, the informed market says it is damaged goods and chooses to pay accordingly. You buy vehicle insurance thinking that if something happens you'll be "made whole" that is fully and completely compensated for your entire loss. Such is not the case until and unless you have the repaired vehicle appraised for this additional loss by a qualified appraiser. We start by establishing the Fair market Value of your vehicle pre-accident and then through a series of industry-accepted formulae arrive at the additional loss you have suffered. Our experience, research and report preparation can lead to a non-contested settlement. Should the number we arrive at be questioned, some insurance policies call for arbitration in these instances. Southwest-Valuations is well prepared to testify in support of our opinion regardless of venue. Our success rate in such cases is impressive. Diminished Value -- an amount of vehicle value not covered through the tangible repair process and measured as the difference between the before and after fair market value (FMV) of vehicle. "After" value is figured from the date of the occurrence, not from the repair date. In theory, diminished value has two facets, tangible and intangible (inherent): Tangible issues address physical damages which are repairable or replaceable; while Intangible issues address those which impact vehicle value but are not necessarily physical or visible, i.e. limited editions, salvage title, an assigned vehicle identification number as opposed to the manufacturer's number, marker perception, provenance, and unresolved tangible issues. FAIR MARKET VALUE -- the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion buy or sell and both having reasonable knowledge of the relevant facts. (Sec 1.170 <c> Income Tax Regulation, Rev. Proc. 66.49) IMPAIRMENT OF MECHANTABILITY -- a vehicle whole history includes that of an accident suffers an "impairment of merchantability" (UCC - Uniform Commercial Code) resulting in a diminishment of value. Whether driven by perception, public disclosure, or the mere fact that the vehicle is now "as repaired" instead of "as manufactured", its reputation has been stigmatized. If this happens to you, contact us. Southwest Valuations can help you on the way to being truly "made whole" as concerns vehicle diminution of value in such cases.
	Don Mc Reynolds,ASA Southwest Valuations P.O. Box 567 Sonoita, Arizona 85637 Voice (520) 241-5586 Toll Free (877) 455-0091 FAX (520) 455-0093 Don's Email: appraiser@southwest-valuations.com	Jon W. Lundberg, Sr. - AM Southwest Valuations 783 West Clear Creek Way Oro Valley, Arizona 85737-6954 Voice: (520) 490-5536 Toll Free (877) 427-7249 Fax: (520) 498-4759 Jon's Email: jon@southwest-valuations.com

Diminished Value

Diminished value occurs when a vehicle is damaged, normally as the result of a traffic accident. Let's assume you're shopping for a car and that you have located two which are exactly the same as concerns make, model, options, powertrain, mileage and color. Price for each is exactly equal. However, while conducting pre-purchase due diligence you discover that car "A" has been in an accident while car "B" has not. Which would you buy?

The fact that car "A", even though it has been repaired to the highest industry standards, has suffered an "impairment of merchantability" or Diminished Value because both you and the market at large believe the car is worth less than an accident-free vehicle. Most insurance policies do not cover this accident repair facet. The fact is that even though a fully repaired car might look and drive as good as new, the informed market says it is damaged goods and chooses to pay accordingly. You buy vehicle insurance thinking that if something happens you'll be "made whole" that is fully and completely compensated for your entire loss. Such is not the case until and unless you have the repaired vehicle appraised for this additional loss by a qualified appraiser.

We start by establishing the Fair market Value of your vehicle pre-accident and then through a series of industry-accepted formulae arrive at the additional loss you have suffered. Our experience, research and report preparation can lead to a non-contested settlement. Should the number we arrive at be questioned, some insurance policies call for arbitration in these instances. Southwest-Valuations is well prepared to testify in support of our opinion regardless of venue. Our success rate in such cases is impressive.

Diminished Value -- an amount of vehicle value not covered through the tangible repair process and measured as the difference between the before and after fair market value (FMV) of vehicle. "After" value is figured from the date of the occurrence, not from the repair date. In theory, diminished value has two facets, tangible and intangible (inherent):

Tangible issues address physical damages which are repairable or replaceable; while

Intangible issues address those which impact vehicle value but are not necessarily physical or visible, i.e. limited editions, salvage title, an assigned vehicle identification number as opposed to the manufacturer's number, marker perception, provenance, and unresolved tangible issues.

FAIR MARKET VALUE -- the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion buy or sell and both having reasonable knowledge of the relevant facts. (Sec 1.170 <c> Income Tax Regulation, Rev. Proc. 66.49)

IMPAIRMENT OF MECHANTABILITY -- a vehicle whole history includes that of an accident suffers an "impairment of merchantability" (UCC - Uniform Commercial Code) resulting in a diminishment of value. Whether driven by perception, public disclosure, or the mere fact that the vehicle is now "as repaired" instead of "as manufactured", its reputation has been stigmatized.

If this happens to you, contact us. Southwest Valuations can help you on the way to being truly "made whole" as concerns vehicle diminution of value in such cases.