How Diminished Value Impacts New Car Sales

Turn “Bad Carfax” Trade-Ins into New Car Sales – How Diminished Value Claims Can Save the Deal

The Challenge

Many trade-ins come with an accident history, often cutting $10,000+ off their trade-in value. Most customers walk away, and the dealership loses the sale.

But if the accident was another driver’s fault, your customer may be entitled to recover diminished value from the at-fault insurer. The outcome depends on how they pursue the claim.

Three Possible Scenarios

Accept the Insurance Company’s Offer

• Insurer pays a low settlement

• Typical recovery: $0 – $1,500

• Customer reaction: Still out most of the $10,000 loss

• Odds of buying new car:

Low

Weak Diminished Value Appraisal

• Customer hires an appraiser who relies on formulas, book values, or online ads

• Insurance companies often dispute these reports

• Typical recovery: ~$4,000

• Customer reaction: Partial recovery, not enough to feel whole

• Odds of buying new car:

Maybe

Strong Independent Appraisal

• Customer hires a firm like The St. Lucie Appraisal Company

• Methodology: Combines expert opinion with trade-in values from six new car dealerships

• Appraiser acts as advocate in disputes to maximize settlement

• Typical recovery: $7,000 – $10,000

• Customer reaction: Closer to full recovery of $10,000 loss

• Odds of buying new car:

High

Why Dealers Should Care

• Customers with accident-history trade-ins often feel stuck

• Guiding them toward credible appraisers helps them recover more and return to buy

• Builds trust, loyalty, and stronger sales opportunities

Choosing the Right Independent Appraiser

When recommending an appraiser, make sure they:

A. Are licensed in any state as an auto appraiser or adjuster — not just “certified” by a private organization

B. Offer services nationwide for broader expertise

C. Have excellent consumer reviews across all platforms

D. Do not also work for insurance companies, to avoid conflicts of interest

E. Avoid appraisers, such as some public adjusters, who take a percentage of the recovery rather than a flat fee, as this can inherently cast doubt on the credibility of the report

The Takeaway

Helping your customers recover diminished value isn’t just good for them – it’s good for your dealership

A smarter way for sales managers to turn “bad Carfax” trade-ins into closed deals

When customers recover more… they buy more

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Please email the body shop estimate or insurance company appraisal to contact@stlucieappraisal.net

Then click on the payment button above to pay by Credit Card or Paypal. The fee for an Automobile Diminished Value Report is
$275.00. You may also make your Credit Card Payment by telephone, call 772-359-4300.
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The St. Lucie Appraisal Company is a family-owned appraisal company that offers nationwide service.We provide Diminished Value Appraisals, Automobile Valuations for total losses, financing, underwriting, estates, bankruptcies, donations and Loss of Use Reports.This is an Open Education Resource focused on auto diminished value, motor vehicle valuations, collective knowledge and the sharing of scholarly content.

AUTODIMINISHEDVALUE.COM, AUTOLOSSOFUSE.COM and TOTALLOSSDISPUTE.COM are services of The St. Lucie Appraisal Company.

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