Thank you everyone for this informative discussion.
The kbb.com prices for my car are $5065 (retail), $3225 (private), and $1880 (trade in). Therefore, the insurance company’s $4100 seems to be in the ballpark. They told me to fax the receipt for the after-market radio and they would add that in. I asked if I could remove the radio and they said that I would have to reinstall the factory radio. I have the factory radio, but I don’t want to take the time and effort to install it. I would rather pull the radio out and leave the factory radio sitting on the seat. Sadly, they didn’t go for that. I also recently had some significant engine work done. I’m going to send them the documentation for that and see if I can get them to give some of that back. The water pump, cylindar head, and other engine components only had about a thousand miles on them, not 97000. Maybe I can get some credit for that.
I don’t believe that the insurance company is trying to cheat me. I just don’t want to be a pushover either. This is leaving me in a financial bind and any extra funds I can get would be helpful.
Of course, the most important thing is that my daughter is okay. She, however, is a whole different story. This collision happened when she took my car without permission and sneaked over to a boyfriend’s house in a different town in the middle of the night. She was returning home early in the morning, having no sleep and being in a hurry (so that she would be back before my wife and I woke up). The crash didn’t hurt her, but… Well, let’s just say that the insurance company isn’t the only one I’m having discussions with about this whole thing.
Kelly Blue book is no longer a real good source of real world pricing for used cars. Yeah, it still gets used, but I guarantee you that only an idiot would pay KBB retail for a car.
for a more accurate real world guide look at the guide published by the National Association of Auto Dealers (NADA). If you stop by a new car dealer, and explain what happened, they will probably be more than happy to pull it out and give you a value. (They will be hoping to sell you a replacement car)
I will bet you a beer that the NADA price is closer to the 4100 than it is to the 5K KBB number.
Also the $1200 you are contemplating to buy a newer car really does not count. What counts is what it would cost to replace with like kind and quality.
Oh, I understand that. I just feel that $12000 is a more realistic amount that would actually replace what I lost. What I lost was a car that I purchased for $12000 and had 23000 miles when I bought it. I lost the past seven years and 74000 miles of knowledge of this car. I knew what it’s problems were and I knew what it’s strengths were. What I need to replace, besides the actual car, is the relationship with the car. Does that make any sense? Besides the money, I feel I had an investment of time, miles, maintenance, and knowledge in that car. I could buy another '99 Stratus with 97000 miles on it, but I cannot buy the familiarity with the car. I would just have an old car. I liked my car because I knew it well, not because it was worth much.
Something tells me this isn’t going to resonate with your insurance company. Nor (I suspect) does your policy include any provision for “loss of consort” or anything similar.
“FMV” is a legal and tax accounting term, meaning what a willing buyer will pay a willing seller. So, the retail price of said used car* is* the FMV. “kbb.com prices for my car are $5065 (retail)” would be FMV.
Insurance companies can’t make up their own “FMV” just for their use.
In fact, I when my car was totaled, they tried to lowball me, but I walked in with three ads for my car from the paper. We made a reasonable compromise, more or less the lowest price fromt he ads I had.
The IRS has cracked down on donations like this – you can’t deduct $4100 for a car that’s been totalled and has to be towed in.
The process would be complicated and not profitable – the insurance company would probably reduce their payment to you in exchange for letting you keep the car, but the car would now be marked “salvage” on the title. A still-wrecked car with a salvage title would only be worth a few hundred dollars fair-market, which would be all you can legally deduct for making the donation.
As for the OP, I’ve had two cars totalled, but both times the insurance companies came back with amounts higher than I was hoping for. In one case, they paid me $1000 more than I paid for the car. :eek:
Unless you have a policy that specifically states “replacement cost” as the insured amount, instead of “fair market value” they seem to be paying you what they agreed to insure when you got the policy. Replacement cost policies do exist, although they are a bit pricey, I imagine you would know if you have one.
So I go to the NADA site and enter a 1999 Dodge Stratus in an Abilene, TX zip code at 97000 miles with no options and surprise, surprise, the "Clean Retail Value’? $4100 smackers on the nose.
Just out of curiousity… So the insurance will only pay out the current value of what your car was worth right before the accident. Fair enough, but – does this translate into lower insurance premiums? If your car becomes worth less each year, do they therefore lower your premiums every year since the policy is by definition not worth as much?
Yes it does. Look at your insurance premium, and then call your agent and tell them that you are considering replacing your car with the '07 version of the same make and model, and you would like a quote. The liability part of the premium is not going to change, the only change will be the physical damage portion of the coverage. The new car will cost more to insure.
scotandrsn Somebody owes me a beer!
You are half right. If I price my car at $1,000,000 dollars that does not make the FMV of my car $1,000,000, as I have no willing buyer. If KBB says the OPs car is worth $5065 that does not mean that his car is worth $5065, as there is no willing buyer. Also nobody pays the asking price for a car, there is always a discount. So even if the lot had a car like the OP’s for $5K they would discount it several hundred to a thousand or so. This transaction price is the fair market value.
The NADA book tracks transaction prices, and as scotandrsn pointed out it is right on $4100, what the insurance company offered.
I have no doubt a new car will cost more to insure, or that the insurance quote for a new policy will take into account the condition and age of the car. What I’m wondering is if you get a policy and then have the car for a long time, will your policy automatically cost less each year to compensate for the devaluing of your car?
Also I wonder why they don’t just try to sell everyone a ‘cost of new car’ policy, which will pay out for a brand new car but have a higher premium.
To answer your question, yes the policy does tend to cost less each year, but as repair costs go up (both labor and parts cost more each year) that decrease is offset by these increases. So in reality while the insurance company risk for a total goes down every year, the cost of a non-total goes up every year due to increasing prices for parts and labor.
for example Assume I total my 2 year old Volvo V70. Company would have to pay about $24,000. (Fair market value) If I drive it for 5 more years and then total it, the fair market value might than be $10,000.
On the other hand, let’s say I rear end the guy in front of me today. Repairs are $2400. Five years from now, that exact repair might be $3,000+ due to escalating parts costs, labor rate increases, and regulatory requirements.
Bottom line is the older the car is, the easier it is to total as repairs get more expensive.
Well, how about that? I entered my real zip code and got the same amount. Maybe they’re not pulling that number out of thin air after all. Their actual quote is $4100 and a little change. Maybe the gave me credit for the aftermarket window tint or the decent tires. I’m still going to try to get them to give me credit for some recent repairs and for the radio.
That’s not exactly true. In 2004, there was a huge hail storm in my college town. My truck had just over $5,000 in damage, and was worth only about $4,500 at the time. So, the insurance company cut me a check for $4,500 (which is just about what I still owed on it), and then I bought the truck back from them, with a salvage title, for $250. I still have the truck.
Holy shit. Not many cars can take that and keep the driver alive.
I’m sorry about the loss of your car, but unfortunately you don’t get any kind of sentimental value or a replacement value. It would just cost too much in premiums.