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And the Survey Says

Consumers’ attitudes toward a vehicle that’s been wrecked and repaired.

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I recently conducted a completely unofficial, non-scientific survey of consumers’ attitudes toward a vehicle that’s been wrecked and repaired. Why? Because some repairers – along with insurance companies – don’t believe (or don’t want to admit) that a vehicle is inherently worth less after it’s been wrecked and properly repaired. (Note the word “properly” because this is important.) They refuse to acknowledge that there’s a stigma attached to a wrecked vehicle and that this stigma drives down the vehicle’s value in the marketplace.

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It makes sense as to why insurers want to deny the existence of inherent DV: It’d be expensive. Just ask State Farm, which recently lost a class-action lawsuit in Georgia and was ordered to pay $250 million for DV. This decision, however, isn’t the norm. The insurance industry has been successful in defending class-action litigation for alleged DV in 12 out of 13 states. Georgia is their only loss.

What’s their winning strategy? According to Kirk Hansen, director of claims for the Alliance of American Insurers, there’s a great deal of evidence that proper vehicle repairs don’t adversely affect the resale value of autos. Says Hansen: “Though there are well over 60 million automobiles in the country that have been repaired as a result of accidents, none of the price apprasial guides, such as the ÔNADA Official Used Car Guide’ or ÔKelley’s Blue Book’ consider prior accidents when publishing the value of used cars.”

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Because it sounded to me like Hansen was suggesting that the prices listed in such guides reflect the market value of wrecked and repaired vehicles, as well as vehicles with no damage history, I couldn’t help but contact Steve Ferguson, editor of NADA’s appraisal guides.

“The values we list,” says Ferguson, “are for vehicles that have not been wrecked. What to pay for a vehicle that’s been wrecked? All we can say is buyer beware.” (So, at least according to NADA, a wrecked and repaired vehicle isn’t worth the same as one that’s never been wrecked.)

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OK, so it makes financial sense for insurers to not want inherent DV to exist, but what about some repairers who also contend that inherent DV is a bunch of malarky? What’s up with them?

I think the problem is that they’re taking it personally – as if the existence of inherent DV somehow means they haven’t done their job. But, as my mother used to sometimes say, “It’s not always about you.”

Even though many repairers contend that they can repair a vehicle back to pre-accident condition, they can’t – no matter how good they are – undo the fact that the vehicle’s been in an accident.

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Which brings me back to the reason I conducted my unofficial survey of consumers: I don’t believe proper repairs diminish a vehicle in value. I believe the vehicle diminshes in value by virtue of the fact that it’s been in an accident.

So I set out to unofficially and unscientifically prove my hypothesis (at least to myself).

I asked 10 consumers who I met randomly (at the grocery story, at the bank, at a video store, etc.) if they’d pay as much for a vehicle that’s been in an accident and properly repaired as they would for an identical make and model (same color, same mileage, etc.) that had never been wrecked.

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Nine said no. One told me that she “wasn’t interested.” (This was an elderly lady who I think thought I was trying to sell her something. We probably shouldn’t count her.)

What I found interesting was that when I asked “Why?” all nine said because it had been in an accident. Not because it had been repaired, mind you. But because it had been in an accident.

What’s my survey prove? Nothing really – except that it doesn’t particularly matter what I think about inherent DV, what you think or even what’s decided in a court of law.

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While judges across the country continue to rule against inherent DV – denying its very existence – there are at least nine people out in the real world who think a wrecked and repaired vehicle is worth less than it was before. And it’s these people – consumers who likely don’t even know what the term inherent DV means – who determine if it exists or not.

Georgina K. Carson
Editor

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