why does a record of an accident lower a car’s value even if the damaged parts were completely replaced?
In: Economics
Because it’s not as good as new any more. Repairs can be done shoddy, or mistakes made, or poor parts used. Even if none of that happens, consumers are willing to pay more for a car without an accident than one with an accident. They want one pure.
The potential buyer doesn’t know if the accident was repaired correctly, they have to take the word of the seller. This increases risk for the buyer and lowers the value.
Because once something is replaced, there’s no guarantee it’s like it was before. There’s a particular guarantee when you get your car off the lot. You know where every part came from. You also might be getting an aftermarket part. Also, there could be unnoticed damage that could show up later from am accident.
Because you don’t always know the FULL extent of the damage caused by an accident. Sometimes the frame can be compromised but you wouldn’t really know because you’re not going to strip the car down to find out so it’s a fair compromise to say “we can’t guarantee we know the extent of the damage” and value the car accordingly.
Because repairs to significant accidents often don’t get it back to 100%. If it has structural damage you can bend things back to be “good enough” but it’s not like new.
Sometimes the repair just isn’t up to OEM(factory) standards. That could be the replacement parts are poor fitting or the paint process is poor.
Example: Last year I purchased a used minivan. I was aware of the accident it was in. It had some bodywork done to the back of the van. It looked good. Until winter weather came. The clear coat (which protects the actual paint) has cracked. Now it looks terrible.
Because nothing is ever the same after an accident. I mean did you take the whole car apart and inspect every piece for cracks? Did you check every circuit board to make sure they and none of their components are loose? Did you take a calipers to every part and check for plastic deformation? No. You just replaced the damaged parts. Maybe the shop even did so good a job that most people can’t even tell it was in an accident. But is it going to last as long as an equivalent car that wasn’t in an accident? Is it not going to have weird noise and rattling issues? Doubtful. And why should a buyer take the risk? That’s why the accident lowers the price.
Modern cars are designed with crumple zones, in impacts over 30 mph the metal is designed to absorb some of the energy and deform to protect the occupants. The upside is this is one of the reasons less people die in automobile accidents, the downside is the deformation of the crumple zones means cars are totaled a much more easily.
Because if you have two identical cars and one has been in an accident and the other hasn’t, which one are people (generally) willing to spend more on?
You’re at a dealership and you have the option of buying two cars, both of which are the same price. One was in a wreck; the other wasn’t. Of course you’ll chose the one which wasn’t in a wreck.
This drives down the market prices of cars in wrecks.
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