What’s My Car Worth?

One of the most common complaints from clients suffering a total loss of their vehicle due to an accident, is the insurance company not giving them fair value for their vehicle. If your car has been destroyed in an accident, the insurance company must pay you the “retail” price or fair market value of the cost of your car. This means they must pay an amount allowing you to buy a car that is of a similar make, model and condition as the car that was destroyed. Retail or fair market value is often different from other values, such as the “trade-in” value so make sure you correctly understand the compensation to which you are entitled. Note, however, that the retail value of the car can be completely different from the amount you owe on the car. The at-fault party’s insurance company is not obligated to pay more than the value of the car even if you owe more. If you believe you owe more than the car is worth, you should consider Guaranteed Auto Protection (GAP) insurance, if available through your carrier, which will bridge the difference in price.

So how do you determine what your car is worth?  In Virginia, there is a law that tells you exactly what tools you can use to figure it out: 

Virginia Code Section 8.01-419.1

Whenever in any case not otherwise specifically provided for the value of an automobile is in issue, either civilly or criminally, the tabulated retail values set forth in the National Automobile Dealers’ Association (NADA) “yellow” or “black” books or any vehicle valuation service regularly used and recognized in the automobile industry that is in effect on the relevant date, shall be admissible as evidence of fair market value on the relevant date.

The determination of value shall be subject to such other creditable evidence as any party may offer to demonstrate that the value as set forth in the NADA publication or any vehicle valuation service utilized by another party fails to reflect the actual condition of the vehicle and that therefore the value may be greater or less than that shown by the NADA publication or any vehicle valuation service.

On more than one occasion, we have had trials where we present to the judge a simple print-out from www.nada.com/ to prove the value of a car. However, as the statute notes, the defendant and their attorney will have the opportunity to point out why they think your car is not worth the NADA value. Usually, this means they will point to things like the condition of your car, whether it has been in any prior accidents, body damage, high mileage, or other issues. It is our experience that if your car was in good condition and you have high-quality photos demonstrating such, judges tend to be very reasonable to accept car values based on NADA values.

If your car is not a total loss, but you can’t agree on the repair cost, there is a statute that is helpful for that as well. Virginia Code Section 8.01-416 allows you to prove the cost of repairs if you have a signed affidavit from a qualified repairman, estimator, or appraiser giving their professional opinion as to the necessary cost of repairs. It is important to note that this statute allows you to also introduce evidence of the diminished value of your vehicle after repairs. 

This can however present a challenge, as not all repair shops are familiar or comfortable with these procedures. Auto repair shops may be unwilling to sign any document that complies with the code section.

Finally, keep in mind that these are the procedures used in court and in trials to introduce the evidence of your financial losses. If you are negotiating with an insurance company, these statutes may be persuasive, but the insurance company is not obligated to agree with you.  The effect of these statutes can be felt in full force when a judge reviews the evidence submitted and makes a ruling that will compel the insurance company to pay what the judge says they must pay. If you have been injured in a motor vehicle accident, as a courtesy, we will help you  navigate the issues related to the damage to your vehicle.

By: Allan Serrano