Two common mistakes of a do-it-yourself diminished value claim
Vic has a number of questions to answer for his claim. But the first step, which is where most people start, is to research the claim online. It’s certainly helpful, but much of what one reads online is wrong, or at least misleading. So Vic read online about the claims and set out to make his claim by himself. Unfortunately he made the same two most common mistakes most do-it-yourself claimants make.
The first mistake is that he went and got a value for the diminished value claim. The reason that it’s usually a mistake is because most people don’t understand that a report, opinion, or appraisal of diminished value is nothing more than that – an opinion. Opinions differ, and one so called expert can give one value and another expert looking at the same car might give a very different value. There are many reasons for this but two most common are these. First, there is some expertise that goes into an appraisal, and appraisals, opinions etc., depend greatly on the expertise of the person giving the opinion. Some so called experts are very good at antique or collector vehicles, but not so good at current SUVs, classic muscle cars or recent model sedans. If you ask for a report, they’ll give you one and charge a fee, but unless you know that their area of expertise pertains directly to your vehicle, you’re likely to get a poor or useless report. As for other car industry workers, they usually have no special training. Many of them are in sales or management, but don’t have any training or credentials in diminished value estimates. They may do it for free, but you will get what you pay for. The second reason that opinions differ so much is because of a built in bias in the system. Many appraisers, for example, get much of their business from auto insurance companies. As a result, they might be very cautious about providing a report that you are going to use for a claim against an insurance company. Their report is going to have their name on it, and if it’s presented to insurance company that sends them lots of business, they offend a good source of other business. No one will admit to this, but it’s how things work. So they may play it safe, and you’ll never know. The same is true of car dealers. If you bring your car there for a diminished value estimate, the dealer probably hopes that you will trade your vehicle in for one of theirs, and the best way to make the most profit on that deal is to give you a low value on the trade in. There simply is no way to assure that the value you get is in your best interest unless you’ve done a lot of these claims, and know who you’re dealing with.
The second mistake Vic made was to provide the value he got to other interested parties in the claim, and in my next post I’ll describe why that is the second mistake most do-it-yourself claimants make.