Why Formulas Are a Poor Representation of Diminished Value
As a diminished value appraiser, I’ve worked for individuals, plaintiff attorneys and even some insurance companies. I was actually surprised that insurance companies would hire me because their objective is to pay as little as possible; however I am an independent impartial licensed insurance adjuster and have to be objective and unbiased.
I cannot influence numbers in the client’s favor. My methods are the most accurate at determining the amount your vehicle will diminish in value, but please don’t ask me to try to skew the numbers in your favor because I won’t do it. If that’s what you want, then you should hire someone else. Formulas don’t work because supply and demand determines diminished value in any local market. Various vehicle models are more desirable and have a higher demand which actually can make the diminished value for that vehicle less because dealers may want it more.
Within a particular vehicle model, subtle differences can affect the demand for that vehicle so the bottom line is that a formula such as the 17C formula used by many insurance companies is totally inaccurate because it cannot account for what’s going on in the local market. The only accurate way to determine diminished value is to gather information from local sales managers that are responsible for buying and selling that particular vehicle in the local market. Anyone who tells you otherwise is either uninformed or lying to you.