Advice needed on accident

[Krox]

I'm looking for some advice from my fellow RFDer's on behalf of a family member. The situation is as follows.



My family member bought a car from a dealership, it's a 2007 SUV. The had the vehicle for a few weeks. There was a minor problem with the vehicle which the dealerhsip was going to fix. An empolyee from the dealership picked up the car from my family member to drive it back to the dealership. Unfortunately, this employee was in an accident (their fault) and caused a significant amount of damage to the vehicle such that it had to be towed.

To the dealships credit they have taken responsibility for the accident and have fixed the damage (almost $10,000 worth). However, my familty member does not want that vehicle back. They want a new vehicle. Does that seem fair to people? It seems fair to me and I wanted to know how I should advise this family member.

I would appreciate people's opinions.

[3weddings]

Tell your family member to seek counsel. Have them ask for diminished value since it was in that accident and isn't worth as much. They can use that money to get out of the lease (if it's leased). Irregardless tell them to just hand the car back into the dealership when the lease is over.

[raskal]

I fully understand where your family member is coming from, but I doubt they have any legal footing here.

However, if they maintain a good relationship with the dealer they should be able to make a reasonable deal on a new vehicle. It will cost them money, but in the long run they will be happier.

I've been in a similar situation and wished I had sold the car immediately even if I lost some money on it.

[Psycho44]

The family members should have made their intent for a new vehicle known before the $10,000 worth of damages were done. But if the family members weren't made aware or given the option of whether they wanted the car repaired or not than I think they have a legitamate reason for a new, similar vehicle.

[Krox]

They still don't have the SUV, the dealer does. Secondly, they never had the car after the accident, it was towed directly to the dealership.

The situation was confusing in the beginning b/c the dealer thought that my family members insurance should pay for it. In the end they the dealership took responsibility for it. However, there was no discussion on what the appropriate resolution should be before they fixed the vehicle. I personally find it a conflict of interest that they fixed it. They have a vested interest in minimizing their costs.

The vehicle is not leased but purchased.

I am just trying to get people's opinions to what is fair. I've thought of them asking for money associated with the diminished costs. I'm hesitant to recommend this b/c a car is never quite right after a major accident. It is just a bad situation for them. They had a 'new car' for less than a month, and the dealer that sold them the vehicle is a fault for wrecking the vehicle.(the cops have witnesses to say it was 100% employee fault). My personal opinion is if the dealership now thinks the car is in as good as condition then they should have no problem reselling it themselves. I understand they will be out the money of fixing it and some of the resale value as well. However, since they are 100% at fault, I think they should be the party out of pocket, not my family member.

[BartBandy]

Excellent thread.

I have no idea how to answer it, but it's very interesting.

[Roonis]

if the dealership is ultimately taking responsibility for the accident, then they have de facto admitted it was there fault (which I think it is). Therefore, I feel you are well justified in asking for another vehicle since it does diminish the vehicle's value.

You will definitely have a fight on your hands but I totally agree that you should get a new SUV.

[x95zsk]

Maybe a new SUV is too much to ask, but you can ask a compensation in terms of the depreciation of an accident. I would think that would be around $3000-4000 mark in terms of cash.

[BobW]

If the vehicle was new when purchased and your family member had it for less than a month, I'd say that they should be fighting hard for a new vehicle. The dealership can sell that one off of their used lot or turn it into a demo. I wouldn't want to own a vehicle thats been in that serious an accident, regardless on how well it was fixed.

[alamshahid]

What does the insurance company of your family member say? Perhaps you should get an opinion from them.

I would push for a replacement vehicle; since its only 1 month old its not that used.

[thelefteyeguy]

so they fix the damage...and now you want to consider a new vehicle?

...perhaps the dealership could have saved $10K and just sell the parts prior.

I highly doubt anything can be demanded after the vehicle was fixed. An agreement has already be made in returned for a repair vehicle.

[Menace]

I think the dealership is pretty smart on this case. You have to prove that $10k repair did not bring back the condition of a few weeks old car. It is pretty hard unless the car was damaged mechanically or structurally. You can give Car Help Canada (http://www.carhelpcanada.com) a call.

[Krox]

so they fix the damage...and now you want to consider a new vehicle?

...perhaps the dealership could have saved $10K and just sell the parts prior.

I highly doubt anything can be demanded after the vehicle was fixed. An agreement has already be made in returned for a repair vehicle.

That is the point, no agreement was ever made.

When the accident first happenned the dealership said it was a 'grey' area and the vehicle's insurance had to handle it. My family member contacted their insurance (especially for liability reasons since there was another vehicle involved in the accident. basically empolyee ran a red light). Initially the insurance company said they would most likely take care of the damage. After the adjuster got involved and saw the reports and the damage, they claimed the dealership was liable and that they were going to take care of it.

After this when my family member talked to the dealership, they said they were still discussing 'options' and that they would 'take care of it'. Now they have said they've fixed the damage. Again there was no agreement.

When I say this family member wants a 'new car', I don't mean brand new off the line car. They would be willing to accept a comparable demo/floor room model. They just don't want a car that has been in an accident.

[BartBandy]

I have no idea how to answer it, but it's very interesting.

Seems nobody else knows how to answer the question either, but they aren't letting that stop them, so neither will I.

I'd be calling an insurance broker or a lawyer - someone who may have dealt with a similar situation in the past. There is no doubt the vehicle's market value has taken a hit. What you need to know is if anyone else has been successful in taking a dealer or insurance company to small claims court to recoup the difference, or force a new vehicle out of them.

[raskal]

your clarifications have changed my view.

arguing that the vehicle is worse off after the repairs will probably go nowhere, however, there will be a marked depreciation of the vehicle for it's resale value for being in an accident of over $X. (in B.C. X=$2000)


They had the vehicle one month so there's some depreciation there.... say $2000. That's all they should be expected to pay against an identical vehicle.

But if they get that far, watch out for dealer's hidden fees, cause that dealer will not be happy and try to get more $$ from them.

but seriously, they probably need some law counsel on this

[BartBandy]

your clarifications have changed my view.

arguing that the vehicle is worse off after the repairs will probably go nowhere, however, there will be a marked depreciation of the vehicle for it's resale value for being in an accident of over $X. (in B.C. X=$2000)


They had the vehicle one month so there's some depreciation there.... say $2000. That's all they should be expected to pay against an identical vehicle.

But if they get that far, watch out for dealer's hidden fees, cause that dealer will not be happy and try to get more $$ from them.

but seriously, they probably need some law counsel on this

Good points.

[Krox]

I don't really think they are going to get a lawyer. I think the cost is not going to be justified in this case.

The dealership hasn't ruled out a replacement vehicle. It is only now that the vehicle is fixed are they trying to come to an agreement. I'm just to get some opinions on what people think is fair, so I can offer some advice. In the end it maybe they split the difference on a replacement vehicle.

Again, this person is looking to screw this dealship. They don't think they are 'entitled' to a new car, only that is how they feel. They understand their expectation might be too high. That's part of the reason why i am asking other peoples opinions.

[woodstock827]

asking for a new vehicle is expecting a bit much, but not totally unreasonable... the more probable outcome would be splitting the depreciation.. that way the dealership keeps a good name without paying too much, and the owner get compensated.

[pintobean]

Here's how I see the scenario...
I buy a brand new car from a dealer for $30,000.
I drive the car off the lot, and instantly it's value drops to ~$26,000 because it is now a "used car".
I drive the car around for a month, and now it's value is down to ~$25,500.
Then the dealership takes the car to do some maintenance, and they get into a major accident.
The dealership fixes the car and tries to give it back to me.
You now have two options...take the car back, or refuse to take the car back and ask for a replacement instead.

If you choose to take the car back, then here's what I would do if I were you:
Before taking the car back, I would have it appraised by three separate, unrelated parties.
I would then average out the appraisals, and ask the dealership to compensate me for any loss in value.
For example, if I get appraisals of $18,000, $20,000 and $20,500, then I'd say that the average value of the car is now ~$19,500.
I would then ask the dealer to pay me the difference between what the car was worth before the accident, and what it is worth now; based on my example above, you should get $6,000. ($25,500 - $19,500 = $6,000)
If the dealer refuses, then I'd get a lawyer and consider taking them to small claims court.

If the thought of driving around in a car that has been in a major accident does not sit well with you, and you want the dealer to give you a new car, then here's what you should expect to do:
Refuse to take the car back from the dealer and tell them you want them to give you a new car instead.
You should be willing to pay the difference in value between what the car was worth before the accident and what it was worth brand new; based on my example above, you should pay $4,500 ($30,000 - $25,500 = $4,500)

I honestly don't think that you should even bother asking the dealer to give you a new car without offering to pay anything more, since a new car would be worth more now than what your "used car" was worth before the accident. If the dealer was to just give you a new car, then you'd be benefitting from the dealer's misfortune, and that's not really fair.

Similarly, if you were to do what the dealer wants and take the car back without any compensation, then you'd be losing out, because the car would be worth less now than what it was worth before the accident.

The obvious solution here is that the dealer should be required to compensate you financially for the loss in value of the car, or they should be required to give you a new car after you pay them for the depreciation in value of your old car (before the accident).

Good luck. Please keep us posted as to what happens.

[jalin2]

Here's how I see the scenario...

I buy a brand new car from a dealer for $30,000.
I drive the car off the lot, and instantly it's value drops to ~$26,000 because it is now a "used car".
I drive the car around for a month, and now it's value is down to ~$25,500.
Then the dealership takes the car to do some maintenance, and they get into a major accident.
The dealership fixes the car and tries to give it back to me.
Before I take the car back, I would have it appraised by three separate, unrelated parties.
I would then average out the appraisals, and ask the dealership to compensate me for any loss in value.
For example, if I get appraisals of $18,000, $20,000 and $20,500, then I'd say that the average value of the car is now ~$19,500.
I would then ask the dealer to pay me the difference between what the car was worth before the accident, and what it is worth now.
If the dealer refuses, then I'd get a lawyer and consider taking them to small claims court.

I honestly don't think that you should even bother asking the dealer to give you a new car, since a new car would be worth more now than what your "used car" was worth before the accident. If the dealer was to give you a new car, then you'd be benefitting from the dealer's misfortune, and that's not really fair.

Similarly, if you were to take the car back without any compensation, then you'd be losing out, because the car would be worth less now than what it was worth before the accident.

The obvious solution here is that the dealer should be required to compensate you financially for the loss in value of the car.

Good luck. Please keep us posted as to what happens.

+1
This is a great summary!

The only thing is I would still try to push for a replacement vehicle first. Not new necessarily, just something that is comparable. And if that option doesn't work out, this plan would be the next step. Personally, I think a vehicle doesn't feel the same after a major accident.. what would be even worse would be that a stranger did it to your car and you have to live with it.

[Krox]

Here's how I see the scenario...
I buy a brand new car from a dealer for $30,000.
I drive the car off the lot, and instantly it's value drops to ~$26,000 because it is now a "used car".
I drive the car around for a month, and now it's value is down to ~$25,500.
Then the dealership takes the car to do some maintenance, and they get into a major accident.
The dealership fixes the car and tries to give it back to me.
You now have two options...take the car back, or refuse to take the car back and ask for a replacement instead.

If you choose to take the car back, then here's what I would do if I were you:
Before taking the car back, I would have it appraised by three separate, unrelated parties.
I would then average out the appraisals, and ask the dealership to compensate me for any loss in value.
For example, if I get appraisals of $18,000, $20,000 and $20,500, then I'd say that the average value of the car is now ~$19,500.
I would then ask the dealer to pay me the difference between what the car was worth before the accident, and what it is worth now; based on my example above, you should get $6,000. ($25,500 - $19,500 = $6,000)
If the dealer refuses, then I'd get a lawyer and consider taking them to small claims court.

If the thought of driving around in a car that has been in a major accident does not sit well with you, and you want the dealer to give you a new car, then here's what you should expect to do:
Refuse to take the car back from the dealer and tell them you want them to give you a new car instead.
You should be willing to pay the difference in value between what the car was worth before the accident and what it was worth brand new; based on my example above, you should pay $4,500 ($30,000 - $25,500 = $4,500)

I honestly don't think that you should even bother asking the dealer to give you a new car without offering to pay anything more, since a new car would be worth more now than what your "used car" was worth before the accident. If the dealer was to just give you a new car, then you'd be benefitting from the dealer's misfortune, and that's not really fair.

Similarly, if you were to do what the dealer wants and take the car back without any compensation, then you'd be losing out, because the car would be worth less now than what it was worth before the accident.

The obvious solution here is that the dealer should be required to compensate you financially for the loss in value of the car, or they should be required to give you a new car after you pay them for the depreciation in value of your old car (before the accident).

Good luck. Please keep us posted as to what happens.

You've raised alot of good points and I think the resolution will probably be something close to what you have said. Alternatively, if they have a 'demo/floor' model available that isn't brand new, that might be possible as well.

However, I do have one issue with your scenario and this is what is the profit for the company on a $30,000 dollar car. If they can sell the wrecked car for the same as the wholesale price of the new car then they really won't be out any money, except for the repair costs (which they'd have to pay anyway).

Now if it turns out the wholesale price is still higher then I think my family member should pay the difference. I just don't think they should have to pay the difference when it includes the profit to the dealership.

[woodstock827]

You've raised alot of good points and I think the resolution will probably be something close to what you have said. Alternatively, if they have a 'demo/floor' model available that isn't brand new, that might be possible as well.

However, I do have one issue with your scenario and this is what is the profit for the company on a $30,000 dollar car. If they can sell the wrecked car for the same as the wholesale price of the new car then they really won't be out any money, except for the repair costs (which they'd have to pay anyway).

Now if it turns out the wholesale price is still higher then I think my family member should pay the difference. I just don't think they should have to pay the difference when it includes the profit to the dealership.

wouldn't it be fraud if the dealership sell the "wrecked" car as new? They have to sell it as used. Not sure what the law is, but it's probably up to the buyer to check if the car has been in accident or not.

[barabashka]

I agree with whoever said that you have no case here.

What if it wasn't the driver from the dealer, but your buddy who got it into an accident? Let's say, for the sake of argument, your buddy claimed full responsibility and put it through their insurance. Your buddy's insurance would have paid to repair the car and you would get a repaired car back. Would be the end of story. So why do you think that because it was the dealer who hit it you are entitled to a new car?

[Krox]

Update:

So the dealership agreed to take the car to another independant mechanic (our choice) with the invoice. The mechanic agreed there was no structural damage and verified the replacement of the parts on the invoice. He did have issues with the front head light assembly which they 'glued' back and said it should be replaced (~$500). So the dealership is going to replace that. In addition, they promise (in writing) to repair any problems in the future that might arise. This last point might be problematic b/c I see it might be difficult to prove what may or may not be related to the accident.


While I don' think this is necessarily the best resolution that could have happenned, my family member just wants this issue resolved. They really didn't want the hassle of dealing with this anymore (They had some pretty emotional stresses in the last few months). So while they are not necessarily happy, they are somewhat satisfied with the issue being resolved.


Thanks to everyone for you opinions.

[blainehamilton]

Things learned:

Always take your vehicle to the dealer personally.
Never go to a dealer for service unless necessary. (warranty work)
Never let anyone else drive your car.

He did have issues with the front head light assembly which they 'glued' back and said it should be replaced (~$500).

This sets off alarm bells right here. I would imagine some corners are cut, but this takes the cake.

My advice is to resale or trade in the vehicle ASAP, before problems arise.

If bodywork starts failing down the road, it's gonna be fun getting problems fixed, even with it in writing.

Just don't let the same employee pick up the vehicle.