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Old 07-07-14, 07:23 AM   #31
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Ok, I understand. Yes, diminished value is a pain, but that's not the same as losing the equity of your down payment.

Here's the solution to that (assumes you want to replace wrecked Lexus with new one): In the event of an accident, allow your Lexus dealer to handle it all, top to bottom (they may use a preferred outside shop to do the work). Then after repairs are made, trade the car in to your Lexus dealer. They will try to ding you because there's a Carfax report or whatever, but the bottom line is THEY WERE ON THE HOOK FOR FIXING IT RIGHT, so if there is diminished value is their fault, and they need to absorb the difference on the trade-in. Normally if a car is fixed properly, the only problem should be the presence of a Carfax report which one could reasonably say reduces the value by a couple of grand maybe. But you're saying it was never repaired properly and/or had frame damage, which meant you had both the insurance company and the repair shop right where you wanted them in the transaction but missed an opportunity. Doing the repairs through the dealer helps insure they get done right, and if not gives you a lot of leverage on trade-in because ultimately you could sue either them or the insurance company for not totaling the car and not fixing it right.

I know it's too late to fix your previous mishap, but this might help going forward.
It was repaired properly at a Lexus dealer but they cannot replace the robotic welds and hand welds look different, frame damage can be repaired but there will always be marks from the frame machine so the assumption is there. A previously wrecked car is a previously wrecked car and I would not pay much for one no matter how well it was repaired. The dealer did as much as I felt was fair (I also got a quote at Carmax) but you can hardly expect a dealer to give you considerably more than the car is worth and I surely wouldn't want to know that they put that car on their lot for resale for the same value as one with no previous damage.
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Old 07-07-14, 08:33 AM   #32
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It was repaired properly at a Lexus dealer but they cannot replace the robotic welds and hand welds look different, frame damage can be repaired but there will always be marks from the frame machine so the assumption is there. A previously wrecked car is a previously wrecked car and I would not pay much for one no matter how well it was repaired. The dealer did as much as I felt was fair (I also got a quote at Carmax) but you can hardly expect a dealer to give you considerably more than the car is worth and I surely wouldn't want to know that they put that car on their lot for resale for the same value as one with no previous damage.
It seems like the basis for your loss is because of what you felt was fair. If you read your insurance policy wording, they must repair or replace. Repair means restoring to the way it was prior to the accident, whether that means a bent frame or a straightened frame that has marks on it. If it has marks on it, it is not as it was prior to the accident.

The point is not getting the dealer to give you more than the car is worth. If the dealer has been paid to fix the car, then any loss of worth as compared to prior to the accident is THEIR FAULT. It is not your problem at that point. If the frame cannot be restored to exactly as-was prior to the accident then the onus is on the insurance company to total the car.

Now granted, there may be times even using the strategy I suggested where you may end up taking lumps to the extent of maybe a thousand bucks or so depending on things like negotiating skills etc. But for much more than that, you shouldn't just absorb it, especially if the accident wasn't your fault.

As I said if you don't tow the car to the dealer immediately following the accident, it's all bets off (yes I understand that you did in this case but it seems like you didn't pursue the fact that diminished value was their fault for not admitting the frame couldn't be restored to its original state to the appraiser). But trust me when I say the tactic I posted works when followed to the letter. I've done it.
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Old 07-07-14, 09:13 AM   #33
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Originally Posted by dasbuch View Post
It seems like the basis for your loss is because of what you felt was fair. If you read your insurance policy wording, they must repair or replace. Repair means restoring to the way it was prior to the accident, whether that means a bent frame or a straightened frame that has marks on it. If it has marks on it, it is not as it was prior to the accident.

The point is not getting the dealer to give you more than the car is worth. If the dealer has been paid to fix the car, then any loss of worth as compared to prior to the accident is THEIR FAULT. It is not your problem at that point. If the frame cannot be restored to exactly as-was prior to the accident then the onus is on the insurance company to total the car.

Now granted, there may be times even using the strategy I suggested where you may end up taking lumps to the extent of maybe a thousand bucks or so depending on things like negotiating skills etc. But for much more than that, you shouldn't just absorb it, especially if the accident wasn't your fault.

As I said if you don't tow the car to the dealer immediately following the accident, it's all bets off (yes I understand that you did in this case but it seems like you didn't pursue the fact that diminished value was their fault for not admitting the frame couldn't be restored to its original state to the appraiser). But trust me when I say the tactic I posted works when followed to the letter. I've done it.
What state do you live in? There is no protection against diminished value in the state of Florida. The only way to remove all evidence of an accident of this magnitude would have been to total it and perhaps I should have fought for that, the damage was somewhere between $11,000 and $12,000 but they absolutely refused to total the car. I could have lawyered up but I am not sure how much better I would have done. At any rate I lease now and I am happy with it so unless, in the future, I need more mileage than a lease offers I shouldn't have this problem again.
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Old 07-07-14, 10:17 AM   #34
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What state do you live in? There is no protection against diminished value in the state of Florida. The only way to remove all evidence of an accident of this magnitude would have been to total it and perhaps I should have fought for that, the damage was somewhere between $11,000 and $12,000 but they absolutely refused to total the car. I could have lawyered up but I am not sure how much better I would have done. At any rate I lease now and I am happy with it so unless, in the future, I need more mileage than a lease offers I shouldn't have this problem again.
There does not need to be protection against diminished value (most states that I'm aware of don't have this either so its not a state-specific issue), the insurance company must repair it to the state before the accident. You don't have to accept the state of repairs, you can say "the frame did not have this damage before the accident" and refuse acceptance of it, but of course if you accept the repairs then wait six months to try to trade-in, your chances of success are lessened.

Diminished value refers to the loss in value that occurs simply due to the fact that it has been wrecked and repaired (as evidenced by a Carfax report for example). Even if it is perfectly repaired, there can still be loss in value simply because it was in an accident. This is the part that's hard to recover. Loss value as a result of things not being repaired properly is a different story because if you can see (or feel) the damage, you can prove the loss. This means the insurance company/repair shop can (and must) repair it or total the car out if they are not able to restore to the condition before the accident.

Now admittedly things can get a bit tricky -- for example, if the other driver is at fault (I believe you said they were), it's basically the other drivers' insurance company that is on the hook here. And yes, they are going to try everything in their power to pay out as little as possible but they are also afraid you will go after them legally (and there are times you need to resort to that).

But in the case where you take the car to the Lexus dealer, the dealer is obligated to work with the adjuster to be sure it is fixed right. After all you are their customer and they do not want to lose your business. Sometimes an insurance company will try to throw a crappy refurbished part in or something to save money. It's up to you (preferably working with your dealer) to push back on anything that is not to your satisfaction, because once you accept the repairs, it's hard to re-open the case later.

The best way to approach this is, once the repairs are in, when the dealer asks "is everything fixed to your satisfaction"? Reply by saying "well if I traded it in today, would you be able to tell by inspecting it that it's been hit? If so, lets fix that". Now if they say that they would have to deduct $1000 or something because of the simple presence of the Carfax report, that's a bit different because it diminishes the value even if the vehicle is perfect... but not to the tune of more than maybe 2-5% of the total vehicle value. So, if they say "well there are some scratches on your frame" ask them why was this not repaired? How do you get it repaired? Because if the answer is that it cannot be repaired, then the conclusion must be that the car has to be totaled.

And if they still try to take advantage of the situation then yes, you lawyer up, you get the insurance commission involved, and you start going after them for numbers that make them wish they had just totaled the car. The important thing is to understand who is responsible for what. Ultimately it's the other drivers' insurance adjusters that make this decision (in your case at least). That's actually the best position to be in since you don't have to fight your own insurance company.

You didn't mention how much money was on the table, and that of course plays a part in the decision. Going after $1000 isn't worth it. Going after $10,000 or something is definitely worth it.
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Old 07-07-14, 10:38 AM   #35
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Originally Posted by dasbuch View Post
There does not need to be protection against diminished value (most states that I'm aware of don't have this either so its not a state-specific issue), the insurance company must repair it to the state before the accident. You don't have to accept the state of repairs, you can say "the frame did not have this damage before the accident" and refuse acceptance of it, but of course if you accept the repairs then wait six months to try to trade-in, your chances of success are lessened.

Diminished value refers to the loss in value that occurs simply due to the fact that it has been wrecked and repaired (as evidenced by a Carfax report for example). Even if it is perfectly repaired, there can still be loss in value simply because it was in an accident. This is the part that's hard to recover. Loss value as a result of things not being repaired properly is a different story because if you can see (or feel) the damage, you can prove the loss. This means the insurance company/repair shop can (and must) repair it or total the car out if they are not able to restore to the condition before the accident.

Now admittedly things can get a bit tricky -- for example, if the other driver is at fault (I believe you said they were), it's basically the other drivers' insurance company that is on the hook here. And yes, they are going to try everything in their power to pay out as little as possible but they are also afraid you will go after them legally (and there are times you need to resort to that).

But in the case where you take the car to the Lexus dealer, the dealer is obligated to work with the adjuster to be sure it is fixed right. After all you are their customer and they do not want to lose your business. Sometimes an insurance company will try to throw a crappy refurbished part in or something to save money. It's up to you (preferably working with your dealer) to push back on anything that is not to your satisfaction, because once you accept the repairs, it's hard to re-open the case later.

The best way to approach this is, once the repairs are in, when the dealer asks "is everything fixed to your satisfaction"? Reply by saying "well if I traded it in today, would you be able to tell by inspecting it that it's been hit? If so, lets fix that". Now if they say that they would have to deduct $1000 or something because of the simple presence of the Carfax report, that's a bit different because it diminishes the value even if the vehicle is perfect... but not to the tune of more than maybe 2-5% of the total vehicle value. So, if they say "well there are some scratches on your frame" ask them why was this not repaired? How do you get it repaired? Because if the answer is that it cannot be repaired, then the conclusion must be that the car has to be totaled.

And if they still try to take advantage of the situation then yes, you lawyer up, you get the insurance commission involved, and you start going after them for numbers that make them wish they had just totaled the car. The important thing is to understand who is responsible for what. Ultimately it's the other drivers' insurance adjusters that make this decision (in your case at least). That's actually the best position to be in since you don't have to fight your own insurance company.

You didn't mention how much money was on the table, and that of course plays a part in the decision. Going after $1000 isn't worth it. Going after $10,000 or something is definitely worth it.
It was a 4 month old 2007 IS250, don't remember what we paid for it but we put down $10,000, after the accident the quotes we got were that it was valued at $19,000. The at fault driver had State Farm insurance and they were awful to deal with.

I think we have hijacked this thread.
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Old 07-07-14, 10:41 AM   #36
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I would never lease but I also would never hire a financial adviser.
It' just a personal choice. He does services for free since he's one of my best friends.
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Old 07-07-14, 01:14 PM   #37
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I think we have hijacked this thread.
Sort of ... I was planning on coming back to my point that I don't think anyone should feel obligated to lease because they're afraid of having equity in a car that could be taken from them by the insurance companies. It is possible, through financing, to keep your payment constant for decades, while constantly upgrading your car to a more expensive model, just by building overall "car equity" (keeping with the times but with a fixed cost payment, kind of like a mortgage). With leasing, I'd never be able to do that because payments are going to get more expensive as cars get more expensive. There are some times when leasing is financially advantageous (business tax write-off, etc), but without those advantages it's really a less desirable option. In theory, for the same reasons the dealership took advantage of the prior situation, my guess is they could do the same on an accident involving frame damage to a lease car. I haven't seen a car lease recently, but the ones I have seen give them the right to charge you for damages in excess of normal wear and tear, and a damaged frame would fall into that category and give them the right to put that cost onto you as well, if you let them get away with it.

Hope I don't sound condescending, just trying to help. I don't like to see insurance companies take advantage of people but that's what they do, by definition. My dealership has played fair with me so far but not all dealers or employees of them do.
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Old 07-07-14, 01:55 PM   #38
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Sort of ... I was planning on coming back to my point that I don't think anyone should feel obligated to lease because they're afraid of having equity in a car that could be taken from them by the insurance companies. It is possible, through financing, to keep your payment constant for decades, while constantly upgrading your car to a more expensive model, just by building overall "car equity" (keeping with the times but with a fixed cost payment, kind of like a mortgage). With leasing, I'd never be able to do that because payments are going to get more expensive as cars get more expensive. There are some times when leasing is financially advantageous (business tax write-off, etc), but without those advantages it's really a less desirable option. In theory, for the same reasons the dealership took advantage of the prior situation, my guess is they could do the same on an accident involving frame damage to a lease car. I haven't seen a car lease recently, but the ones I have seen give them the right to charge you for damages in excess of normal wear and tear, and a damaged frame would fall into that category and give them the right to put that cost onto you as well, if you let them get away with it.

Hope I don't sound condescending, just trying to help. I don't like to see insurance companies take advantage of people but that's what they do, by definition. My dealership has played fair with me so far but not all dealers or employees of them do.
As long as the car is repaired to Lexus specs it isn't excess wear and tear. Well the problem for me with purchasing isn't the potential negative equity from an accident alone, it is getting my husband onboard for a new car and that isn't very easy, with leasing I know I'm getting a new car (with no marital discord.) I am now working independently and should be able to write off the lease this year which is good.
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Old 07-07-14, 02:14 PM   #39
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As long as the car is repaired to Lexus specs it isn't excess wear and tear. Well the problem for me with purchasing isn't the potential negative equity from an accident alone, it is getting my husband onboard for a new car and that isn't very easy, with leasing I know I'm getting a new car (with no marital discord.) I am now working independently and should be able to write off the lease this year which is good.
It sounds like you have other reasons for leasing which is good. Part of your first sentence "repaired to Lexus specs" is the key concept. If it were repaired to their specs, it should be good enough for trade-in without value loss just as well as turning in from a lease with no penalty. They can't be allowed to pull a double-standard out of their butts, especially if they are the ones that repaired it in the first place.

But, yeah, I hadn't thought of it but leasing does solve a particular marital issue : "I don't really WANT a new car honey, I HAVE to because my lease is up".. hehe
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