Vehicles Without a Title

Retitling a Vehicle without a TitleA vehicle that is missing a title can be problematic whether you are buying, selling, or simply moving a car to a new state. You’ll need to get a new title in order to sell or transfer the vehicle, and many states require you to retitle a vehicle when you move. If you are buying a car, a title is even more important: the title protects you and prevents misunderstandings involved with legal ownership of the vehicle.

So what do you do if you’ve lost your title or if the vehicle you want to buy doesn’t have a title? There are a few important steps you’ll want to take:

Replacing a Lost Title

If you are selling a vehicle or moving to a new state, you’ll want to have a current title in hand. If the vehicle was originally titled in your name and you’ve lost it, you can apply to the DMV for a replacement title. You’ll need to verify which state issued the original title and follow the guidelines for the issuing state (even if you do not live in that state currently). You will also need a copy of your driver’s license and current registration. For more specific information about the state that issued your title, read How to Find a Lost Title on the F & I Tools website.

Buying a Vehicle Without a Title

While most modern vehicles have original titles, antique and collector cars, particularly “barn finds” may have never been titled. Buying a vehicle without a title is risky: the title is a legal document that provides exclusive ownership rights to the title owner. This means that if you were to buy a stolen vehicle that has no title, you would have no rights should the title owner appear and claim ownership of the car. To avoid disputes related to titles, you’ll want to:

  • Research the vehicle. No matter what story the seller has told you about why there is no title or where the car originated, be sure to get a full vehicle history report (VHR) online (popular sites include Carfax or AutoCheck). A VHR will provide the car’s title status, an odometer report, and will include a history of accidents or insurance claims.
  • Contact your local DMV. You can use the car’s VIN number to confirm title status and request a history of the vehicle and any reported accidents.
  • Make sure the vehicle isn’t stolen. Use your car’s VIN number to check with the National Insurance Crime Bureau to determine if the car has ever been reported as stolen and not recovered.
  • Consider a pre-purchase inspection. AAG can provide a Vehicle History Report on late-model vehicles when completing a prepurchase inspection and certified appraisal report.

Buying a Vehicle without a TitleIf any of the information you find during your research contradicts the information provided by the seller you might want to reconsider your purchase.

If you do decide to purchase the vehicle, you can protect yourself in a few ways:

  • Complete a bill of sale. A bill of sale is an important part of the sale of any vehicle, and it is even more important when the car title is missing. Include all details of the sale: VIN number, mileage, and the price you paid for the car. List the terms of the sale (“as is”, “seller to supply title”, etc). Document the seller’s and buyer’s complete information: full addresses, legal names, and phone numbers should be available for both parties. Use a form of payment that can be easily proven such as a check or bank draft. You may also want to agree that all funds remain in escrow until the terms of the sale are met.
  • Request a replacement title from the seller. If the vehicle has been previously registered in the seller’s name with the DMV, the seller can request a replacement title. Once the seller has obtained the new title, the sale can proceed normally.
  • Locate the original title. If the seller never registered the car or transferred the title to their name, it may be worth trying to track down the original title from the previous owner. Your vehicle history report (VHR) will include the last state in which the car was registered. Contact the DMV for contact information associated with the last titled owner, explaining the reason for your call. Some states may insist on contacting the previous owner for you. You can request that the previous owner file for a duplicate title that will allow you to register the car in your name.
  • Get a Surety Bond. In some states, you can obtain a Surety Bond to get a new title. A Surety Bond is a financial security measure that guarantees that the car belongs to you and covers you should there be any financial penalties associated with the car. Check for any liens on the vehicle and do not complete the purchase until all liens have been cleared and lifted. Most states require proof of purchase, proof of residency in your state, proof that the car is not junk or salvage, and an accurate appraisal of value. A certified appraisal can help establish the value of the vehicle so that you can purchase the Lost Title Bond.

Any time that you consider purchasing a vehicle without a title, you should also think about involving a certified auto appraisal expert to help you gather information about the car to ensure that the process of retitling is as straightforward as possible. Contact Auto Appraisal Group today for assistance!

Avoiding Common Used Car Scams

Avoiding Common Used Car ScamsBuying a used car can be a great way to purchase a quality vehicle at an affordable price, but it is important to keep an eye out for used car scams when shopping. Most scams revolve around concealing important facts about the car – mileage, title history, major repairs, or the lack of necessary maintenance. You can avoid many used car scams by using common sense, but it never hurts to be familiar with some of the most common scams.

Common Car Scams“It just needs a little Freon…”
When a seller says the car “just needs…”, what they mean is that some part of the car is broken. For instance, if an air conditioning system is not cooling properly, it could be due to a lack of refrigerant (Freon). Unless the car is very old, the Freon level is probably low due to a leak somewhere in the system. Sure, you can recharge the system with a kit from an auto parts store, but without addressing a possible leak, you will simply have to recharge it again, over and over. In other words, if the seller tells you the A/C system just needs more Freon, they mean “The A/C is broken.” The same can be said for any other part of the vehicle that “Just needs…”

Pre-purchase Inspections from Auto Appraisal Group“It ran last week…”
Clearly, if the seller is saying “ran” in the past tense, the car is not currently running. The seller may say something like “It just needs an alternator belt” and tell you that you can get one cheaply at an auto parts store. Which leads you to the question: If the alternator belt is so inexpensive and easy to install, why wouldn’t the seller replace the belt himself and ask for a higher price for the vehicle? It’s more probable that the seller has no idea why the car won’t run and would rather let you figure that out – after buying the vehicle, of course.

Prepurchase Used Car Inspection by Auto Appraisal Group“I almost never drive it…”
Most cars are driven an average of 12,000 miles a year (except in the case of collector or vintage vehicles). If the odometer of a 5-year-old used car reads 6,000 miles, it should make you suspicious of odometer fraud. Modern digital odometers can be “hacked”, and while this is not a simple process, it is done by unscrupulous sellers. Odometer fraud can be hard to spot – you can use your judgment to assess the wear on the brake pedal, steering wheel, and seats. Or you can ask for a prepurchase inspection to document the condition of the vehicle and to help determine the validity of the odometer reading.

Prepurchase Car Inspection with Auto Appraisal Group“I inherited the car from my uncle in Texas…”
This type of phrase may not be obvious to many buyers as a scam but is usually a sign of “title washing”. When a vehicle has been destroyed by flooding, fire, or collision, it can be rebuilt to drivable condition and given a “salvage title”. The salvage title informs a buyer that the car has been destroyed and rebuilt and that there is a unique risk involved in purchasing that vehicle. Scammers will try to hide this by registering the vehicle at a DMV in a different state, where it might pass through the system as a regular title by a clerk who is not familiar with out-of-state salvage title markings. You can avoid being a victim of this used car scam by engaging in a pre-purchase inspection. A pre-purchase inspection will not only document the vehicle’s current condition but will also use the VIN to obtain the car’s history and can help identify past damage.

If you are concerned about used car scams, you can find peace of mind by having a pre-purchase inspection done for the vehicle you hope to purchase. Our certified agents often identify suspicious or false claims, and the documentation they provide not only arms you against nefarious sellers but also prepares you should you choose to sell the car in the future.

Protect yourself from used-car scams! Call us today for a Certified Pre-Purchase Inspection!

The Top 5 Reasons Classic Car Buyers Walk Away

Tips for Selling a Classic CarIf you are preparing to sell your classic or antique car, you should prepare yourself and your car for the process! Whether you are selling the vehicle yourself or selling it at auction, there are some common mistakes that you will want to avoid that can prevent classic car buyers from walking away.

The advertising misrepresents the car. Be honest about your classic car when you advertise. It can be tempting to create an ad that makes your car look even better than it does in person, but this can be frustrating for an antique car buyer. Make sure the ad includes all information about the make and model of the vehicle, and don’t boast about its condition unless you are sure that your classic car is worthy of the praise. Having an appraisal performed before selling an antique car can help you to accurately describe the vehicle for buyers so that they are not disappointed when they see the car in person.

Selling your Classic CarThe car is overpriced. Do your research and make sure you know what price similar classic cars are demanding. This is another reason that having a fully documented appraisal can be extremely useful when selling your classic car. A certified appraisal agent can not only provide insight into what constitutes a reasonable price for both buyer and seller, but your fully documented classic car appraisal is a concrete way to justify the price you are asking.

The origin of the vehicle is unclear. Classic and antique vehicles are collected for a wide variety of reasons, and buyers of classic cars are most often very interested in the origin of the car. Be sure to have all documentation ready so that you can inform a buyer about where you obtained the vehicle, how it was maintained, any repairs that may have been done, and whether or not it has been restored. If you don’t have the title, make sure you have clear and accurate documentation to prove that the vehicle belongs to you and can be transferred legally. Registration or a sales receipt is usually sufficient.

The car displays mechanical issues. If your classic car is a hobby car, you may not drive it much and may not be aware of mechanical issues or may not have repaired them. Nothing is more disappointing to a potential buyer than the realization that the classic car they came to purchase isn’t in good working condition and requires costly repairs to be road-worthy. As mentioned previously, be sure to advertise the vehicle properly if it is not currently road-ready and requires repairs. If you choose to have the car repaired before the sale, be sure to keep records of what repairs were done, by whom, and what parts were used in the repairs.

Buying a Classic CarThe restoration of the vehicle was done improperly. Classic car restoration is an art, and classic car collectors will want to know if the car was restored when the work was done and by whom, and what parts, paint, or other materials were used as part of the restoration. Good records and documentation are a must for anyone selling a classic car – without them, it can be difficult if not impossible to prove that the car was restored properly. If you are not sure whether your antique car has been restored or if the restoration was done correctly, a certified auto appraisal can help.

If you are preparing to sell a vehicle, a vehicle appraisal from AAG can help make the process easier and more successful! We can provide a range for the vehicle’s worth and can give you a solid idea of what constitutes a fair price. Our comprehensive documentation offers you the confidence that your vehicle is priced properly and that all details are accurate and well-represented.

Call us today to have your classic car appraised and sell your antique vehicle with confidence!

All About Automobilia

Automobilia Collection Appraisal with Auto Appraisal GroupWhat is Automobilia? As this fast-growing and expanding market takes over vintage and antique galleries everywhere, you may be wondering what exactly constitutes an “automobilia collection” and why automobilia has become so popular.
Automobilia is generally defined as anything that advertises an automobile. This includes not just a complete car from Ford or Chevy, but also parts like headlights or brakes. Some people include “petroliana” – anything that promotes gasoline or gasoline brands – in a sweeping definition of automobilia. Automobilia does not include actual car parts or automobiles – these are referred to as “automotive”.

For many of us, our collections began with a few pieces of authentic automobilia we bought to dream about the car we wanted before we could afford to shop for a collector or vintage vehicle. In some cases, collectors search for items that are nostalgic and remind them of a certain time. Other collectors are obsessed with a brand and only collect automobilia that represents a company like Chevrolet or BMW.

Among the top contenders for collector attention are the obvious celebrities: Dodge, Chevy, Mopar, and classic vehicles like the Model A, the Stanley Steamer, or the Chrysler Touring cars. The current market includes collectors who use automobilia as decorator items, creating a new interest in items that are not necessarily brand specific. The goal is a certain “look”, creating an expanding and competitive market for both well-preserved pieces and those sporting a charming patina.

Automobilia Collection Appraisal with Auto Appraisal GroupInformation about the value of automobilia can be difficult to assess. While the condition of the item does help to determine its value, it is not as clear cut as “mint” v. “poor”. Some buyers are looking to buy a piece of art, and as such, they value the impact that a little wear can have in a decorator setting. Without the help of an insider or an expert in the field, it can be very hard to know what an item should be worth. In some cases, a piece may be more valuable simply because of its history – where it came from, how it was displayed, who owned it – and may demand a higher price than a “mint condition” version in spite of a little “road rash”.

Current market prices are increasing as general audiences begin to take an interest in pieces that were once only of interest to serious car collectors. The result is that many car collectors who have had a casual hobby collecting automobilia may have much more valuable collections than they realized. Collectors who are dreaming of buying their next vintage vehicle can start raising funds by offering part or all of their collection to buyers.

But how do you know which items have value and what that value should be? If you have the time and funds, the best way to get a good idea of value is to go to car shows and talk with experts who can explain the history of artists, certain brands, and the ownership of specific items. While this sounds like a lot of fun, most of us don’t have the time and resources to gather the knowledge we need.

Did you know AAG appraises more than just vehicles? AAG has extensive experience with Collector Automobilia and can appraise your collection to determine value. Like all our appraisals, our documentation will make it easy for you to claim value, protect your investment, and determine a price if you wish to sell. Contact us today!

Do You Need a Prepurchase Inspection For Late Model Vehicles?

Prepurchase Inspection for Late Model VehiclesYou can save a lot of money by buying a pre-owned late model vehicle, right? It depends on what you know about late model cars, and how savvy you are about the value of the pre-owned vehicle.

Many people know very little about the cars they drive, and most of us lack the knowledge or expertise to properly assess a pre-owned vehicle. The result is that buyers feel forced to buy expensive new vehicles or purchase an overpriced used car from a dealership. Those who do try to avoid years of payments on a car from a dealership by buying independently may face even greater horrors when their lack of knowledge leaves them paying for repairs to address undisclosed issues.

Prepurchase Inspection for pre-owned vehicleHow do you avoid these problems without suffering the depreciation loss associated with new cars? A pre-purchase inspection can provide the expertise and insight needed to help you avoid dishonest sellers who might not tell the full story about their pre-owned vehicle. A prepurchase inspection not only protects you from unscrupulous sellers, it also allows you to fully reap the rewards of buying a pre-owned vehicle and avoid the value loss from depreciation that occurs as soon as you drive a new car off the lot.

Prepurchase inspection agents test the vehicle, look for signs of an accident, and ask all the right questions about the care and maintenance of the car. A prepurchase inspection for a late model vehicle can provide you with documentation so that you know the condition of the car you are buying and what the fair market value should be.

AAG offers prepurchase inspections for late model vehicles in over 30 states. Don’t risk buying another used car without an expert opinion! Call us today to schedule a pre-purchase inspection for any used vehicle you are considering buying.

 

Why Does AAG Have Certified Agents?

Why Does AAG Have Certified Vehicle Agents?AAG agents come to us with life experiences that prepare them for their role as an inspector and as a professional representative of the company. They also have a passion for automobiles and a desire to help owners make informed decisions to save money and pursue their hobby.

Many of our certified agents have hands on restoration experience either through previous jobs, business ownership, weekend racing, or as backyard mechanics. Many have been members of groups or clubs that share their knowledge and time to support one another’s passion for the old car hobby.

Why Does AAG Have Certified Agents?We know they have the proper skills because we have met them and spent five days together studying classic, antique, muscle, modified, and other collectible automobiles and learning about the auto appraisal business. We want to be sure that the individual inspecting your vehicle is equipped to do the job. That means AAG certified agents:

  • know how to document what they see using the processes that have been created to gather detailed information.
  • know how to grade the condition of each component in a consistent manner.
  • know what they are looking for in order to determine whether or not claims of originality, special options, history, maintenance, customization and matching numbers can be verified.
  • know how to photograph the vehicle to provide the required photos for our reports and to provide clients with a detailed inside look from a buyer’s perspective.
  • are prepared to locate visible pertinent numbers when they get onsite.
  • know where to look for rust, filler, damage, and repairs.
  • have experience that helps them interact with opposing parties in legal matters.
  • know how to ask the right questions.
  • are equipped to send this information to our headquarters in an expedient manner.

Certified Vehicle Inspection AgentsAAG certified agents attend a five day certification class to prepare for their new role. This class helps them to organize their new agency as an independent contractor so they can begin providing services as soon as they graduate.  They see a variety of examples of different vehicles in various conditions and learn how to consistently rate individual components so the research team and appraisers at headquarters can determine an overall condition rating and value. Attendees learn about the different reasons clients rely on AAG’s independent assessment to address their specific needs relating to insurance coverage and claims, financial matters, property settlements, and purchasing decisions.

What don’t AAG agents do?  They don’t give an opinion of value. All values are determined at headquarters by utilizing our massive comparable database which contains all the appraisals and prepurchase inspections we’ve completed over the past 30 years as well as recent auction results and sales.  This allows us to compare the same model of a vehicle with all others we’ve inspected across the country. This prevents the appraisal outcome from being swayed by the opinions and desires of sellers, clients or insurers. We call them as we see them.

Certified Prepurchase Inspection AgentsIf you think you’d enjoy helping people who own and love automobiles, you can apply to open an AAG agency in your area. Visit our website and submit your application and we’ll be back in touch if you have the experience we’re looking for and are in an area where we need coverage. AAG will be hosting certification classes in the coming months. We have limited seating available to allow for hands on practice and to keep all participants safe.  Our 2021 class schedule is:

  • May 10-15 in Fort Lauderdale, Florida. April 5th registration deadline!
  • June 14-19 at LeMay Family Collection in Tacoma, Washington.
  • September 27-Oct 2 at AACA Museum in Hershey, Pennsylvania

We look forward to bringing new agents into the group who can help us continue to provide independent, certified appraisals and prepurchase inspections for our clients located across the country. Could that new agent be you?

 

 

What Happens to Vehicles During a Divorce?

What Happens to Your Vehicle During a Divorce Settlement?Divorce is always difficult, particularly when couples try to decide how assets should be distributed to each party as part of the settlement. Property is usually equally distributed between two parties, but how do you split a vehicle two ways? Most people know that a lawyer is necessary to make sure that all agreements are fair, equal, and well documented, but you may not realize that it is also wise to have your estate evaluated and professionally assessed to properly account for assets that are difficult to divide.

In a typical divorce settlement, one party will take the vehicle and give the other party an equal share of the property in return. This can be complicated if the vehicle is worth a substantial sum or if there isn’t enough property in the estate to equally compensate the other partner for the vehicle. Some auto owners may be forced to sell a valuable car or collector vehicle in order to adequately split the value.

Property Distribution Appraisal by Auto Appraisal GroupMatters can be further complicated if the value of the vehicle is ambiguous or undocumented, as is often the case with antique vehicles or hobby cars. If a value cannot be determined and agreed upon by both parties, there can be disputes about the vehicle value that can make it difficult to reach a settlement. An independent value appraisal is an excellent way to establish what the car is worth. A certified independent appraiser can establish a fair, universally agreed-upon value for the vehicle, which can help to smooth out discrepancies during the divorce settlement process.

Even if you never intend to divorce your spouse, a certified auto appraisal performed by an independent appraiser can protect you any time that the value of your vehicle may come into question. This can be useful in insurance disputes, estate settlements, and sales, and should you find yourself in need of a divorce settlement, your appraisal will make the process much easier for all parties involved.

Expert Testimony from Auto Appraisal GroupFor over 30 years AAG has provided an independent vehicle appraisal service that can determine the current value of a vehicle for the equitable distribution of property during a divorce settlement. AAG can also provide expert witness testimony in support of our automobile appraisals. If the other party chooses to dispute the value of your vehicle, the documentation and witness testimony provided can help you to expunge any confusion about how that value was determined.

Whether you are beginning a divorce settlement or merely want to document your vehicle accurately as part of your estate, give us a call and find out how easy it can be to protect the value of your car.

How to Sell a Vehicle at Auction

how to sell car at auctionSelling your car can be a difficult and often disappointing process, fraught with tough choices and pitfalls. You could trade it in at a dealership as part of a new vehicle purchase, but it’s unlikely that you’ll receive full value on your trade-in deal. Selling directly can be a costly mixture of advertising and showing the vehicle to potential buyers with no guarantee of a sale. Obstacles like these make selling a vehicle at auction a viable alternative.

Auctions provide many benefits to sellers. The entire process can be completed in as little as an afternoon, and a good auction will expose your vehicle to dozens of interested, serious buyers. Selling at auction can be effective but there are still things you’ll want to know to get the best sale price:

how to sell vehicle at auctionSet a reserve price. Without a reserve price, there is a chance that your vehicle could literally be given away. Your reserve price is the lowest amount you would be willing to accept to sell the vehicle. This figure will require you to know what your vehicle is worth: do your research to make sure that your make, model, and condition justify the amount you are hoping to receive. You will benefit from a professional appraisal to determine value, especially if you are selling an antique or restored car.

Choose the right venue. Different cars benefit from different types of auctions. If your car isn’t exactly in mint condition, you may want to opt for a live auction. Live auctions are often frequented by scrap dealers and restoration hobbyists who may be willing to buy a vehicle in questionable condition in order to find parts. On the other hand, if your car is in very good condition, internet auctions are a wonderful way to attract bidders all over the country (and even the world). The internet can make it much easier to get your asking price, but internet buyers also usually expect the car to be in good working condition. Be prepared to produce appraisals, maintenance records, and repair or restoration history.

Be honest and thorough about your car’s condition. Take lots of pictures of your car and document the condition of your car thoroughly. Pictures should show the car inside and out, and it’s a good idea to take a picture of your odometer as well. Attempts to hide damage and the refusal to answer questions can make bidders suspicious. Auction buyers don’t always expect a car to be in showroom condition, but they may see a lack of photos as a sign that the car is not in good shape. A well-documented appraisal is very useful when selling antique and vintage vehicles, whether the auction is online or live. Antique buyers will want to know what restoration has been performed, who completed the work, when it was completed, and what type of parts were used. Also, keep a good record of how well the vehicle has been maintained. The documentation provided by a certified appraisal can be extremely valuable to both seller and buyer.

Auctions are a great way to sell your car for what it’s worth without spending a lot of time and effort. You are almost guaranteed to sell your car at auction while selling directly promises no reward. If you think an auction might be right for you, get a certified auto appraisal so that you can provide documentation of the vehicle’s worth, set the right reserve price, and sell your car for the most money you can expect. Want to get started? Contact AAG today to find out how an appraisal can save you money!

How to Prepare a Vehicle For Sale

How to Prepare a Vehicle for SaleSelling a vehicle can definitely be more difficult than buying one! You may need to juggle unreliable online listing services with indecisive and disorganized buyers, all while preparing the vehicle to sell. Many people rely on dealerships to buy their used cars as part of a new car purchase just to avoid the hassle in spite of the well known fact that dealerships rarely offer full value on a trade-in. For those trying to sell an antique vehicle, the process is even trickier. The following tips can help simplify selling or auctioning your vehicle, whether it’s a vintage or late model.

Wash The Vehicle: One of the biggest mistakes people make before selling a vehicle is forgetting to wash and detail the vehicle. Washing your car helps it look well cared for and helps convince potential buyers that it’s in good condition. Vacuuming the inside, waxing, scrubbing the tires and other detailing can be a very effective way to catch the eye of a potential buyer.

Preparing to sell a VehicleGather Your Documents: Make sure that you have the title documents that prove ownership of the vehicle. The last thing you need is to search for a title that may have been misplaced after a buyer has agreed to purchase your car. Before listing your vehicle or advertising it in any way, make sure you have the title in hand, as well as any service documents such as restoration and maintenance receipts, pictures from the restoration, and anything that can document the history of your vehicle.

Watch Out For Scams: Online market places are rife with scams, but many people assume it is buyers who are the victims of these cons and don’t realize sellers can also be scammed. A common ploy is a buyer who offers to pay more than the asking price and wants you to send the extra back to them. Victims of this tactic find that the check for the payment will bounce, but the “extra” money and your property will be long gone before you get a chance to discover the “rubber” check!  Familiarize yourself with common scams like this one so that you don’t fall for them.

Know What It’s Worth: If you have a late model vehicle, you can search the internet to see if similar models are for sale but that won’t give you an accurate idea about your car’s value based on its year and condition. Price guides are averages and just a guide but not specific to any particular vehicle. Watch out for buyers who try to haggle over value based on nonexistent issues.  Keep up-to-date records on maintenance and repairs to avoid selling your car for less than full value.

If you have an antique vehicle, knowing what it’s worth can be difficult, particularly if you have performed modifications or restorations. Consulting an online price guide is not the most accurate way to determine the value of a vintage vehicle. Value can differ widely depending on condition, option packages, restoration, and care. One of the best ways to be confident that you know the value is to get an independent vehicle appraisal that provides complete documentation for a buyer or auction house.  A vehicle appraisal considers the condition of the vehicle, its options, any restoration details, and current market trends to ensure the most accurate estimation of value.

Be sure you know your vehicle’s true value before selling – contact AAG for a vehicle appraisal by clicking here!

 

Is Diminished Value Tax Deductible?

Diminished Value Tax  Deductible Vehicle DamageDiminution of value occurs when a vehicle is wrecked or damaged in an accident. The vehicle is subsequently repaired or restored to road-worthy condition, and the insurance company agrees to pay the auto claim for the repairs. The car is now inherently worth less, even though it may not appear significantly different than it did before the accident.

Even if your car was repaired to “like new” condition, it now carries a damage history that will affect its resale value. Should you decide to sell the vehicle or trade it to a dealership, the diminished value will be less than you would expect to receive had the vehicle never been damaged. If your accident was caused by a third party, a diminished value claim against their insurer can allow you to reclaim some of your losses, but did you know that any part of the loss not reimbursed by the insurance company is tax deductible?

When your car is damaged in an accident and you file a claim with their insurance company, you are entitled to deduct any amount that isn’t reimbursed by the claim. This loss may be the result from an insurance deductible, losses that exceed your policy limits, or the undervaluation of property by the insurance company.

Diminished Value AppraisalProperty losses are reported on IRS Form 4684 and Schedule A of form 1040. You are not required to submit documentation with your tax return, but it’s a good idea to keep records in case you are ever subject to an IRS audit. Your records should include the amount of property loss, the amount of any reimbursement, proof of legal ownership of any damaged or destroyed property, and details of the accident (including whether it was or was not your fault).

You may be asking yourself “Why do I need to document details of the accident?” You are not allowed to claim a tax deduction for an accident that resulted from your own negligence or a willful act. Running a stop light or driving under the influence negates your ability to make a claim. Likewise, if you have given another driver permission to drive your car and that driver causes an accident, you cannot claim the deduction based on that driver’s negligence or willful accident.

A diminished value appraisal can assist you in determining the amount of loss you can claim as an itemized tax deduction on Form 4684 on your Federal tax return. In many cases, the cost of the car appraisal can also be claimed as an itemized deduction. More importantly, an appraisal performed by a certified appraisal company can help determine both the original value of the vehicle and the current value after repairs are completed. This will give you an accurate idea of the loss of value.

If you have had an accident and are trying to determine how you should report your diminished loss, contact AAG today for a diminished loss appraisal and save money on your taxes this year!