I wrote a Toronto Star column about problems getting the full resale value for a car that has been repaired after an accident.
In the column, I said that Viraf Baliwalla of the Automall Network in Toronto had come up with a diminished value calculator that could help you decide whether to sue the other driver for your loss.
Until now, there have been no court cases in Ontario to test this approach. But Baliwalla told me about one of my readers, for whom he acted as expert witness in court. Here’s how he described it in his blog.
Mary bought a demo SUV in 2010 from a new car dealer. The vehicle was a manufacturer’s executive-driven vehicle for approximately 15,434 km before the dealer bought it for sale. Since then, the dealer added about 1,300 km.
Mary used her vehicle for work, as well as carting her kids from place to place. She was adamant the vehicle be accident-free. The salesperson assured her it was.
She didn’t feel the need to have the salesperson’s assurance put in writing, nor have it inspected independently. The bill of sale said the balance of factory warranty was in place.
After driving it for two years, Mary noticed rust developing on one of the body panels. When she took it in for repair at a different dealer, she was told the warranty would not apply because the vehicle had been in a previous accident.
She contacted the original dealer to lodge a complaint, but felt she was not getting much satisfaction. She took the vehicle to a body shop to identify the damage and started a small claims court claim against the dealer.
The dealer said the accident must have happened while the car was in Mary’s possession. Mary said neither she nor her husband had ever been involved in an accident.
Further, the vehicle’s history report showed no claims, estimates or accident repairs against the vehicle, meaning it would have been fixed “on the sly” without reporting it to the insurance company or police.
The judge felt both sides were genuine in their belief they did not cause the accident. He suggested the dealer repair it at an estimated cost of $2,239.
The dealer obliged and fixed the car. Mary attempted to settle with the dealer for diminished value as well, but the dealer was not willing to entertain her request.
At the hearing on diminished value, Mary had a paralegal representing her. I was her expert witness to discuss how much less the vehicle was actually worth when she purchased it.
The judge said Mary had sustained diminished value. He felt both sides were innocent and the vehicle was probably involved in an accident before the dealership received it.
He awarded Mary $2,750 in diminished value and $600 in costs. But when her legal fees were factored in, she more or less broke even.
Mary pushed this issue to the limit out of principle. Thanks to her efforts, there is now a court case in Ontario where a judge has accepted the notion of diminished value and awarded accordingly.