In the event of an unexpected traffic accident, the insurance company of the culprit reimburses the repair costs of the victim’s car. In certain cases, the loss of the car’s lost market value can also be compensated, but many people do not know about this possibility. Who can apply for this compensation and in what cases it is granted – say specialists.
Traffic accidents decrease the market value of the car
When a car gets into a traffic accident and suffers damage, its value inevitably decreases, so all damages automatically affect the price of the car when it is sold.
However, according to Gražvydas Stučka, the head of the transport claims administration group at Aon Baltic, many people do not know about the possibility of receiving compensation for lost merchandise value from insurance companies.
“Compensation belongs to those who are injured in a traffic accident and their vehicle is damaged. Some insurers compensate the market value according to CASKO insurance, but it is important to know that compensation is also possible from the culprit’s compulsory civil liability insurer”, says G. Stučka.
According to the interviewee, a number of car buyers check the history of the vehicle on car data platforms, so it is not possible to sell a broken car as new – all accidents and damages automatically affect the value of the car when it is sold.
It is more difficult to sell a damaged car
According to car data company carVertical, two out of three buyers in Lithuania check the car’s history before making a decision to purchase a used vehicle. The drivers of the country are interested in historical records about mileage, damage and fixed operating facts abroad.
Matas Buzelis, the company’s car market expert and communications manager, says that an experienced buyer usually succeeds in negotiating a price of 5-10% when buying a used car.
“A car sold with ungrateful historical facts can be bought significantly cheaper. Discovering information about falsified mileage or a major traffic accident experienced in the past, during which structural parts of the car were damaged, gives the buyer a strong negotiating advantage. Especially if it is a model that is rarely found on the market”, says M. Buzelis.
According to him, when choosing a car, you should always follow the principle of several steps and only after checking the historical facts of the car, move on to the physical inspection, quality test drive.
“If we don’t find any reason to abandon such a model, we encourage you to have it checked at a reputable service or official dealership.” If the seller does not agree to inspect the car according to the buyer’s request, the car should probably be avoided,” advises the expert.
It is also important to consider insurance costs
According to Vaidotas Gurskas, head of Citadele Leasing’s branch in Lithuania, after a traffic accident, the financial situation of the victim largely depends on the type of insurance the driver has chosen for his car, so it is important to choose it responsibly.
“When insuring only with compulsory civil liability insurance (TPVCAD), a lower insurance premium is paid, but the risk increases that in the event of an accident, the compensation will not fully cover the damage suffered. And in the case of the culprit of the traffic accident, the damage to the property of the culprit would not be covered at all”, says V. Gurskas.
When buying a car on a lease, TPVCAD is not enough – the leasing company requires the car to be insured with CASCO insurance. In order to reduce significant one-time additional payments, V. Gurskas notices that when buying a new car, Lithuanians are increasingly choosing to pay the insurance in monthly installments, and to pay off the lease with the residual value.
“In this case, the monthly payment is lower, and almost always a person who bought a car on lease can sell it for the remaining amount – for example, when concluding a 5-year leasing contract, it is usually set at 30-40%. residual value of the car. This is an additional security guarantee for the owner, that even if the market conditions change, it will still be possible to sell the car at a predetermined price,” he says.
Before buying a new car, the expert advises to critically evaluate not only the car’s net worth, but also the associated operating costs. For example, additional costs for insurance, according to V. Gurskas, usually amount to 2.5-5 percent. the value of the car, and the amount is influenced by driving experience, history, car data, including make, model, power, engine type, etc.
How do I claim a loss of market value benefit?
Stučka emphasizes that in order to receive compensation for the loss of the car’s value, the necessary condition is to be the victim in the incident. It is true that there are other conditions for compensation of market value, so it is best to contact the serving insurance broker or other expert in each specific case regarding the possibility of obtaining it.
The representative of “Aon Baltic” also points out that the amount of the loss of market value basically depends on the value of the car and on the severity of the damage. For example, for damage to the bumper of a VW Polo, the amount of lost market value can be around 100 euros, while in the case of more severe damage, the loss of market value for a more luxurious car, the Audi A6, can reach up to 2,000 euros.
“And although the victim can claim compensation for the loss of market value from the TPVCAP insurer of the culprit, however, practice shows that not all insurance representatives offer this service to car owners. In addition, the damage is not always calculated impartially”, says G. Stučka.
