Skip to main content
ask joanne

I own a 2009 Audi R8 V-8 that I purchased for $120,000 in January, 2012, with only 1,400 km on it. In July, 2012, I was involved in a low-speed accident where a motorcycle swerved into the side of my car, resulting in cosmetic damage to the passenger door and sideblade.

The police placed him 100 per cent "at fault" and charged him with a variety of offences. His insurance company covered all the repair costs and I ensured that my dealer and insurance company ordered all new parts from Germany rather than use putty and repair existing parts.

I am considering trading in the R8 for the more practical RS-5, but was told by two different dealerships that the trade-in value is now $85,000 as a direct result of the $14,000 Carfax that now shows against the car, rather than $100,000 they would normally offer for such a low-mileage 6MT R8. In the United States, there is a something called a "Diminished Value Claim;" however, I am being told by my insurer that in Canada there is no avenue to pursue such a claim against the other insurance company.

Should I push the insurance company? Consider small claims court? – James in Toronto

Simply put, through no fault of your own, you were sideswiped by another driver and insurance covered the cost to bring your car back to its former condition. But even though the damage is repaired, you're left holding the bag: the resale or trade value of your vehicle is now reduced.

This diminished value is also known as "accelerated depreciation." Depending on the make and model, and the quality of the repair, it can be in the hundreds, or even thousands, of dollars. The sting won't be felt, of course, unless you sell or trade the vehicle.

As you know, in some U.S. states insurers consider diminished value when adjusting an auto claim, and compensate the claimant after the vehicle is repaired. In Georgia, for example, it doesn't even matter if the accident was your fault.

Mention diminished value to an insurance company in Canada, on the other hand, and you're likely to receive a blank stare, silence, or flat-out denial of its existence. So, is there anything you can do to recover this loss?

"Accelerated depreciation is known as one of the largest hidden secrets in the car insurance industry.

Most people don't know, but there are ways to get back your money; you can hire a lawyer or take it to small claims court. For the most part, they settle out of court, because the insurance companies don't want precedent cases," says Rob Fournier, owner of The Car Whisperers Automotive appraisal service.

Due to the high margin of lost value to your vehicle, odds are good that you'll be able to find a lawyer to take your case on a contingency basis. They'll take a percentage of whatever you win, or you can handle the matter yourself in small claims court.

Either way, you'll want to present a report from an unbiased source on what the car was worth just before the accident, and what it's worth now, repaired.

"When you go to a dealer, there's an agenda. They're going to give you the wholesale price. Obviously, they want to buy the car for low and sell it high, so they're not going to give you an accurate representation of what the actual retail market of that car is," says Fournier.

"They're always going to offer you less than what you could get if you sold it privately. My experience has been the courts want to see the loss, as in the difference in actual retail market price.

The dealer's numbers are often manipulated, and in my experience the courts don't go by those numbers, because they understand that."

When it comes to the way diminished value is handled in Canada, Fournier and others are working to increase awareness, and say change may be on the horizon. "An insurance company I'm working with is looking at offering this coverage at the end of this year, for the first time in Canadian history."

Send your automotive maintenance and repair questions to