Diminished value isn’t a topic we hear about that often, but if you’ve ever been in a vehicle crash that wasn’t your fault, trying to recoup it’s diminished value can be a legal minefield, since the process is unregulated in most U.S. states and Canadian provinces. Also for dealers, a customer’s trade-in that’s been branded or repaired has negative consequences not only on trade-in value, but the ability to close a deal and also CSI for the store.
It’s not all bad news however. MyCarIsWorthLess has developed a Diminished Value Protection Plan that’s designed to protect consumers, result in higher resale values for damaged vehicles and provide dealers with a value added product that can be sold through F&I departments. Launched in Canada this month, Canadian auto dealer interviewed MyCarIsWorthLess President Viraf Baliwalla to find out more.
HE: Can you tell us a little about how you developed the plan?
VB: We started out in the U.S. in 2010. We launched the MyCarIsWorthLess.com website that used a diminished value calculator to enable consumers to go after diminished value on their repaired vehicles. Today it’s used by both insurance companies and consumers to establish diminished value for individual vehicles.
HE: From what we understand, diminished value isn’t covered by most states and provinces when it comes to vehicle insurance policies and yet motorists are required to have liability insurance. Is that why obtaining diminished value can prove so difficult?
VB: If you’re involved in a crash that is not your fault, why should you be expected to absorb that loss? The reality is that you don’t have to since, everybody is required to have liability coverage which is supposed to cover you, the problem, is that it is unregulated — there is no set amount on how much diminished value you can get without going to court. Even then, there is no guarantee you’ll recoup your loss. There are cases where judges have awarded diminished value but legal costs and other fees have left consumers with nothing.
HE: How does the Diminished Value Protection Plan work?
VB: Consumers can contact us to sign up as members. We register their vehicle and they pay a membership fee. It’s a prepaid service that takes care of the whole process of establishing and receiving diminished value. With our experience in the legal system we can navigate the pitfalls to ensure our members recoup the money that is rightfully theirs. We also guarantee results within 60 days for amounts up to $5,000 without our members having to go to court.
HE: Can you tell us about some of the benefits the plan provides for dealers?
VB: Because the plan can be sold through dealership F&I departments, it provides a value proposition for the dealer (added revenue) and for the customer (pre-paid, peace-of-mind protection). If a used vehicle is noted as having been repaired, it greatly diminishes the value of that vehicle which can have a very negative impact if a customer tries to trade it in for a new one at the dealership. The customer is unhappy, the dealer is unhappy and it can jeopardize a sale, CSI and also retention for that dealership. As part of the service we offer to our members we provide a coupon if they trade the vehicle back to the dealer that originally sold them the vehicle and the plan. The coupon acts as a retention bonus for the dealer.
HE: How long has the plan been available in Canada?
VB: We literally began this month but we’ve already seen considerable interest in the Diminished Value Protection Plan. We are currently working with a number of dealers (including groups) and hope to continue spreading the message, providing both consumers and dealers with an effective, value driven proposition.
For more information, visit: MyCarIsWorthLess.com
