Monday, December 16, 2013



Discussion groups can be enlightening but they also have a tendency to mislead. It isn't uncommon for contributors who know next to nothing about a subject like automobile diminished value to offer their "expert" opinions. Recently I participated in a Teslamotorsclub forum about diminished value after collision repairs on a Tesla S. Not unlike owners of high-end cars such as Porsche, yuppie cars such as Volvo and semi-ergonomic vehicles like Toyota Previa, Tesla buyers perusing the used car market tend to avoid previously repaired vehicles like the plague. New car dealers, naturally, are just as hesitant to take them in trade. Hence, diminished value on certain vehicles tends to be greater than for others.

To the Teslamotorsclub forum I wrote "The Original Poster is correct when he writes that not many Teslas have been damaged, therefore, establishing an accurate diminution of value after accident repairs is going to be as difficult as preparing a DV report for a high-end Ferrari." Correction - much more difficult! I did have occasion to speak to a Tesla owner who was seeking info regarding a diminished value appraisal but he turned out to be a tire-kicker. He also turned out to be the moderator of the forum because after getting his panties in a bunch he promptly erased my post and banned me from his little fiefdom.

Another contributor commented that a 10% DV might apply to the Tesla S. I can tell you that diminished value of some cars such as BMW, Mercedes-Benz, Lexus and Porsche can reach as high as 50% of their fair market value. I had a Jeep dealer tell me that 50% was even low on a repaired 2014 Jeep Grand Cherokee 4DR SUV SRT8 Vapor because a crossmember was replaced and that he'd forsake the auctions and probably have to sell the car overseas. Tesla buyers are every bit as discriminating as Porsche buyers and the like.

There are three methods that appraisers use to establish diminished value.

1) By a formula such as State Farm's notorious Rule 17-C which assigns points, known as modifiers, to different items such as whether there was unibody damage, air bag deployment, towing, etc.

Believe it or not, the color of the car can enter into how much less a dealer (or private party) will pay for a vehicle. I have never prepared a DV report for a Tesla (* see  note below) but I'm sure that owners of these cars are as particular as Porsche buyers - very apt to pass on any vehicle that was involved in a prior collision. So, a formulaic approach seems unlikely to qualify as a proper way to assess diminished value for a Tesla with a bad Carfax.

2) By using auto auction results. There are many inherent drawbacks to this type of approach that I won't go into here but regarding a Tesla, not many of them, either with or without prior damage histories have gone through the auction lanes so employing that method isn't an option.

3) Obtaining dealer quotes is how I formulate diminished value. This method allows me to query new car dealers by providing complete info on the subject vehicle right down to the options and color as well as the repairs that were done to the car.

So which method suits the unfortunate Tesla owner who was rear-ended and now has a car that's worth a good deal less after completion of repairs? I speak to sales managers at all types of dealerships every day but haven't had the opportunity of calling any Tesla dealers to ask their opinions about the diminished value of one of their vehicles. I am wondering whether even the dealers themselves would be able to provide accurate feedback at this point in time?

NOTE: Since writing this article, I have had occasion to perform a diminished value appraisal on a 2013 Tesla S and can report the following: The sales people at almost all Tesla dealerships are as knowledgeable about the automobile market as I am in nuclear physics. If you can imagine what a blank stare translates to over the telephone - that is what it is like trying to discuss diminished value with a Tesla salesman.

With diligence and determination, I eventually found the right people and was able to complete my DV report. Long story short, the 2013 Tesla S that had $4,600.00 in collision damage to the front, no air bag deployment or frame/unibody had a diminished value of just over $7,000.00.

The discussion touched on diminished value in California and how poorly auto owners are treated by large insurers like Allstate and State Farm, among others. My remarks noted the absence of punitive damage awards in California.

Another contributor wrote "I have discussed the California laws regarding punitive damages with an attorney who represents people in diminished value cases and learned that what you say is true. It is unfortunate, almost criminal, that insurance companies, not to mention other types of large corporations, can make uninitiated, just plain regular folks have to jump through hoops simply to get fair treatment. Insurers have no reason not to jerk you around, there's no real penalty for doing so."
Methods of dealing with claimants vary from state to state with many insurers - many of the things that insurers do in California differ from their practices in other states. It seems that California is the testing ground for insurers and its citizens are their lab rats.
One contributor wrote "I'm a former insurance adjuster for one of the top 5 insurance companies in the US. As mentioned in other posts, I don't know of any insurance carrier in California that pays out DV for first party (insured) claims. 3rd party is possible, but most of the time it gets denied due to lack of proof. And even then, it almost never will make it to arbitration as 95% of people back down from the insurance company. I find it insane that it's allowed to continue on like this, but not enough people file Department of Insurance complaints about this. My go-to insurance move was always to threaten to call the commissioner, which triggers a fine with any call. That usually improved the level of phone response."

The St. Lucie Appraisal Company is a licensed firm that provides automobile diminished value appraisals in all 50 states. It is important for vehicle owners to not only know their rights but also to be represented by an appraiser of unparalleled excellence in the field. Soon enough we'll know how poorly Tesla's stack up against the other cars that used-car buyers turn their noses up at. If any Tesla owners wish to weigh in on the subject of diminished value, please feel free to contact me.

The St. Lucie Appraisal Company
P.O. Box 2700
Fort Pierce, FL 34954
Phone: (772) 359-4300
Fax: (772) 466-8400


Automobile Diminished Value Appraisals nationwide including Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington West Virginia and Wisconsin.

paypal payment button The fee for a Tesla Motors Automobile Diminished Value Report is $350.00. You may also make your Credit Card Payment by telephone, call 772-359-4300. Credit card payments can be made on the PayPal page. Click on "Don't have a PayPal account?" to be taken to the secure credit card payment page. 

After making your secure payment please email the body shop estimate or the insurance company appraisal to or FAX to 772-466-8400.