I spend a good amount of time in court as an expert witness in classic car matters and I’m hoping to pass along to you some of the things that I’ve observed and learned.
Diminished value is a term that many classic car owners are not familiar with, but should be.
As it applies to classic cars, it refers to the loss in value that can take place after an accident or other mishap.
I was recently involved in a case in which the owner of a 1957 Chevrolet BelAir convertible was rear-ended at a traffic signal resulting in significant damage to the car. What made this BelAir special was that prior to the accident, it was entirely original and in concours condition. The owners stated insurance value was a very believable $100,000 because it was likely unique, or very close to it because of its originality. Repairs were estimated at $35,000 and the car was repaired, which included repainting the entire vehicle.
Although the quality of the repair work was excellent, the owner realized that his BelAir was no longer worth $100,000, but was now worth in the range of $65,000 because there are plenty of restored 1957 BelAir convertibles on the market at any given time.
He sued the person who had hit his car, making a claim of “diminished value” in the amount of $35,000 and he won the full amount.
There are two kinds of diminished value, “actual” and “perceived.” “Actual diminished value” is generally easier to prove, because after the vehicle is sold, any reduction in the sale price as a result of the loss is the “actual diminished value.”
“Perceived diminished value” is a bit more difficult to prove because it is the equivalent of saying “I think this is how much less my car is worth as a result of the loss.” It’s up to you to prove that the amount of your claim is accurate. With a competent attorney and appraiser, this is generally not a barrier to a successful outcome.