Does a Car's Trade in Value Drop If It Has Been Repaired After an Accident?

by Ellie Williams, Demand Media
    Even after repairs, a wrecked car loses some of its resale value.

    Even after repairs, a wrecked car loses some of its resale value.

    If your car sustains damage in an accident, its value drops permanently. This is true even with minor damage and even if you repair it. If you want to trade in your vehicle later, you’ll probably have to accept less than you would before the accident, even if your vehicle is in good condition. How much the trade-in value of your car decreases depends on the type and amount of damage, the age and make of your car and the quality of the repairs. Vehicles lost an average 33 percent of their value after an accident, according to the ABC News article “Been in a Car Wreck? Get Reimbursed for Lost Value.”

    How Dealerships Know You’ve Had an Accident

    Even if you’ve erased all visible signs of your vehicle’s damage by having it repaired, auto dealerships probably will know about it. Many dealerships run a vehicle history report on any vehicle brought in for a trade-in. This report shows a vehicle’s entire history, including accident reports. Insurance claims also show up on vehicle history reports, so if your car’s damage was significant enough that you filed an insurance claim for the repairs, any dealerships looking at your car’s report will see that and probably lower the amount they offer you.

    Type of Damage

    The more significant the damage to your car, the more your trade-in value drops. A car with obvious damage is difficult for a dealer to sell, so if your vehicle has dents, misalignments or problems with the paint, the dealer will accept much less than if it is in near-mint condition. If your vehicle suffered so much damage it had to be rebuilt, the insurance company might have considered it “totaled,” even after repairs. Even if you kept the car and made repairs and improvements after the accident, your car will have a salvage title, which is not attractive to buyers or dealerships. According to Edmunds.com, many dealerships, especially franchises, won’t accept a car with a salvage title. With such significant damage, both buyers and dealers will worry that while the vehicle looks good after repairs, the accident caused structural damage that might cause problems later on.

    Quality of Repairs

    When auto dealerships offer a trade-in, they primarily consider how much money they’re likely to make when reselling the car. While buyers often want to know a vehicle’s history, they also want to purchase a car that looks good. If you’ve invested in high-quality repairs that restored the car to its original condition, the vehicle will maintain a resale value and dealers probably won’t significantly lower their trade-in offer. Likewise, with minor damage such as a bumper that can be replaced, the dealership should be able to sell your car relatively easily and won’t lower the trade-in value as much. However, if the repairs were not done properly and the damage is clearly visible, the dealership won’t offer much because of the difficulty in selling an obviously damaged vehicle.

    Age and Make of Your Vehicle

    Damage most significantly reduces the trade-in value of newer cars. Older vehicles have already depreciated so much that an accident is not likely to lower the car’s value much more. The make of your car also significantly affects the trade-in value. Some cars are in such great demand that dealerships know they can probably sell them even if they’ve been damaged. In this case, the dealership might not significantly reduce its trade-in offer. If there’s not much demand for your make and model of vehicle, however, the dealership might have difficulty selling it even without damage, and probably will offer a much lower amount if there’s damage.

    About the Author

    Ellie Williams has been a journalist since 2001, working both as a newspaper reporter and freelance writer. Her work has been recognized by her state's press association and by her local chapter of the Society of Professional Journalists. Williams graduated magna cum laude with a Bachelor of Arts in mass communications and humanities, with minors in French and theater.

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