Think a car crash is just about fixing the dents?
Think again.
The fact is that an accident involving repairs and rebuilding of a vehicle is usually accompanied by a pile of undisclosed expenses. Diminished value, rental costs, insurance rate increase… All these expenses can add up quickly.
And here's the kicker:
Most of these costs never show up on the repair shop invoice.
This article demystifies the after-crash costs that can empty your pockets, and tells you precisely how to dodge them.
Here's what's covered:
- Why Accident Repairs Cost More Than You Think
- The Hidden Cost Of Diminished Value
- OEM Vs Aftermarket Parts -- The Real Difference
- Rental, Towing & Other Sneaky Charges
- Insurance Premium Hikes After A Crash
- How To Protect Your Car Accident Settlement
Why Accident Repairs Cost More Than You Think
Car crashes are expensive. Period.
Lost wages, medical care, and repairs... You get the picture. The costs can pile up quickly. Minor fender-benders can easily cost $500 to $1,500. Moderate to severe collisions can exceed $10,000, though, as frame damage and electronics are factored in.
And here's the problem:
The repair bill is only the start.
When a vehicle is damaged in an accident, the repercussions of the damage go far beyond twisted metal. After a vehicle is rebuilt, there are numerous fees and other losses of value as well as long-term financial implications that accrue over the ensuing months. Negotiating a fair car accident settlement requires an understanding of what to demand -- as well as what to resist.
That's where an experienced Orlando auto accident lawyer who can help makes a big difference in a car accident settlement. They know how insurance companies lowball claims and how to fight back for the full value of a vehicle and all related losses.
Now for a breakdown of the biggest hidden costs to watch out for.
The Hidden Cost Of Diminished Value
This is the one that catches most drivers off guard...
A car is worth less after it is repaired, even if the repair is perfect. Why? Because the accident will be noted on the vehicle history report.
Buyers see that and start haggling.
New research from the market indicates that a vehicle will lose between 10% and 30% of its value after an accident, even with perfect repairs. That's $2,500 to $7,500 off a $25,000 car. Poof. Vanished. Just because the accident is on its history.
The three types of diminished value to know:
- Inherent diminished value: The immediate loss in value from simply having an accident on record, as shown on the vehicle's history report
- Repair-related diminished value: Extra loss from sub-par or mismatched repair work
- Immediate diminished value: The drop right after the crash, before any repairs
Insurance companies are not going to bring up diminished value unless the driver does. That's money left on the table.
OEM Vs Aftermarket Parts -- The Real Difference
Want to know another sneaky cost that shows up later?
Cheap parts.
Insurance adjusters will approve repairs in favor of aftermarket parts over OEM parts. Aftermarket parts can be up to 60% cheaper than OEM parts, however, they are not as good in several key ways:
- Less reliable fit
- Shorter part lifespan
- Reduced safety performance
- Lower resale value
This is important because counterfeits can lead to more extensive issues over time. A misaligned bumper. A faulty sensor. A replacement panel that corrodes quicker than the surrounding body.
These issues then feed right back into diminished value... And the cycle continues.
Rental, Towing & Other Sneaky Charges
The car is in the shop, life goes on. And that costs money too.
Here are the fees most drivers forget about:
- Towing: Around $109 on average, but can climb fast for long distances
- Rental car: Roughly $159 per day
- Storage fees: $50-$75 per day at some impound lots
- Rideshare costs: Adds up quickly for daily commutes
Two weeks of repairs could run over $2,000 in rental costs alone. And not all insurance policies include it. Rental reimbursement is typically an optional add-on.
Pro tip: Be sure to confirm this is covered before assuming it is. And if another driver was at fault for the wreck, their insurance should be liable for these expenses as well.
Insurance Premium Hikes After A Crash
This is the cost that keeps giving...
Premiums increase an average of 46% following an at-fault accident. And it's not just for a year. The increase can last three years or more.
The math:
- Pre-crash premium: $1,500/year
- Post-crash premium: $2,190/year
- Three-year extra cost: $2,070
That's money leaving the account every single month because of one bad afternoon.
The kicker? Innocent drivers may also get rate increases. It depends on the insurance company and state regulations.
How To Protect Your Car Accident Settlement
Knowing the hidden costs is half the battle. The other half? Fighting for them.
Here are the steps to take right after a crash:
Document Everything
Photos of the damage. Police reports. Medical records. Estimates for repairs from more than one shop. Any piece of paper you have will help. The more documentation, the better the claim.
Get An Independent Appraisal
Don't rely solely on the insurance company's repair estimate. An independent appraiser may find damage the adjuster overlooked and help with a diminished value claim in the future.
Demand OEM Parts In Writing
Insurance companies advocate for aftermarket parts because they're less expensive for the insurance company. However, drivers have the right to request OEM parts, especially with safety related components like airbags and sensors.
File A Diminished Value Claim
This is the one most people forget. But it can be worth thousands of dollars. File a claim with the at-fault driver's insurance, supported by an appraiser's report.
Get Legal Help Early
Insurance adjusters are professional negotiators who have been trained to pay out as little as possible. Having an attorney in your corner evens the playing field, and usually results in much larger settlements.
The Bottom Line
Restoring a wrecked vehicle costs more than the estimate from the body shop.
With diminished value, rental fees, premium increases and repair problems, it is not unusual for a crash to cost two or three times the repair expense.
Here's the good news:
The majority of these costs are recoverable -- you just have to ask. A good car accident settlement will include:
- Full repair costs (with OEM parts where possible)
- Diminished value
- Rental and towing fees
- Lost wages and medical bills
- Pain and suffering (if injuries occurred)
Don't let the insurance company tell you what the crash is worth. Document, negotiate against lowball offers and seek professional help if the claim is denied or underpaid.
The money is there -- it just takes knowing where to look.
