Friday, July 27, 2012

Frame Damage Depreciation

Frame Damage Depreciation

One of the most important mechanical components of a vehicle it its frame or unibody structure. This forms the basic physical core of the vehicle and attaches to major mechanical, interior and body components. Because of its importance to a vehicle, damage to the frame can hasten the process of depreciation, which happens to all cars as they lose value over time.

Cost of Depreciation

    Frame damage is among the most damaging factors when it comes to determining a used vehicle's value. According to The Law Offices of Hovanes Margarian, frame damage can cause a car to depreciate quickly, losing between 30 percent and 70 percent of its market value due to the damage alone. In addition to normal wear and tear, plus the external damage that a frame-damaging accident typically causes, this means that cars with frame damage are worth only a small fraction of their pre-damage value. As with any other type of depreciation, the less a car is worth before the damage, the less value it will lose. Likewise, a newer, more expensive car will lose more value from having its frame damaged.

Reasons

    Frame damage causes such extreme depreciation for several reasons. The first is the fact that frame damage can compromise a vehicle's resistance in the event of another accident, creating additional risk for passengers. Frame damage is also difficult and expensive to repair, which pushes down the price of vehicles that need frame work even further. Because accidents cause most cases of frame damage, a damaged frame can be an indicator that a vehicle has other mechanical problems, including unseen problems that have yet to manifest.

Identifying Damage

    Frame damage can be difficult to identify, and nearly impossible to spot during a quick visual inspection. This is because frame damage often materializes throughout a vehicle's structure, not necessarily near the site of an impact. Auto body technicians can also replace body panels, removing most indicators of accident damage and making a vehicle look like it's in much better condition and less likely to have a depreciated value than it actually does.

Considerations

    Some states require dealers to disclose incidents involving frame damage when the value of the depreciation that the damage causes exceeds a certain dollar amount or percentage of a vehicle's value. In addition, vehicle history reports document accidents that may indicate frame damage. Buyers should request such reports and, in cases where frame damage is a possibility, request an inspection from a neutral collision expert to determine frame damage and make the appropriate adjustments to a vehicle's sale price.

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