1. Their methodology. This is the most important factor because appraisals produced with flawed methodologies are not respected by insurance companies or the courts. Ask the appraiser about their methodology. Unfortunately, many appraisers use arbitrary formulas. No formula can accurately appraise diminished value because the preowned vehicle market is too complex, dynamic and localized. A vehicle in San Francisco will likely sell for a different price than the same vehicle in Topeka. Prices also change according to shifts in demand. Some unscrupulous appraisers are so brazen that they simply take 20% of the pre-accident market value and present that as their "appraisal". Do you really need an appraiser for that? Stay away from any appraiser using any kind of a formula.
2. Appraiser's knowledge of the diminished value claims landscape. The legal environment for diminished value claims is highly complex and varies greatly from state to state. For example, a certain appraiser tells their client that they can recover diminished value on their leased vehicle. They can't because they are not the legal owner of the vehicle - the leasing company is! What happens is the client spends the money on their appraisal and gets exactly zero in compensation. Other appraisers tell their Kansas and North Carolina clients they can get diminished value from their own insurance - not true because first-party claims are only possible in Georgia.
3. Guaranteed money-back policy. Look for an appraiser who offers a money-back policy. Although there are legitimate appraisers who don't offer it, why not go with ones who do? Sure, there may be some conditions such as having to follow the appraiser's recommendations during negotiation with the insurance company but having a money-back policy is very important.
4. True independence. Some appraisers get 95%-100% of their business from insurance companies. As you can guess they are under intense and constant pressure to make sure their appraisals are in insurance industry terms "cost-effective", in other words, low. If such an appraiser's appraisals are consistently too "rich" for the insurance company, they will lose the high-volume business the insurance company provides them with. Stay away from appraisers who are in the pocket of the insurance companies - they are as independent as the body shops in the insurance company's "Direct Repair Program" network.
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Frequently Asked Questions about Diminished Value
Simon Galperin is a senior auto appraiser at Tiger DV and an expert on diminished value. He consults attorneys, insurance companies and individual car owners on the subject of automotive diminished value.