ICBC Ordered To Pay “Accelerated Depreciation” Damages Following Vehicle Collision
As I’ve previously written, when a vehicle is involved in a crash and is then repaired it is generally worth less than it would be had it not been damaged. The reason for this is quite simple. When a buyer is looking to purchase a used vehicle, those that have previously been damaged and repaired carry a stigma. This stigma generally results in a lower resale value.
If you are the victim of a crash and your vehicle is repaired but now worth less the loss can be legally recoverable from the at-fault driver. The claim would be for ‘accelerated depreciation‘. Reasons for judgement were published this week by the BC Supreme Court, Vancouver Registry, dealing with such a claim.
In the recent case (Jiwa v. Xu) the Plaintiff was involved in a 2017 collision. The Defendant admitted fault. The Plaintiff was operating a brand new 2017 BMW 530i which was purchased shortly before the collision for $77,127.50.
The crash was significant resulting in over $31,000 of repair costs. After the vehicle was repaired the Plaintiff traded it back to the dealership for $50,000. The Plaintiff sued to recover damages for the ‘accelerated depreciation‘.
In accepting the claim and ordering that $13,500 be paid for the loss Madam Justice Murray provided the following reasons:
[23] Taking into account all of the evidence I find that the BMW did depreciate when it was driven off the lot. That leaves the question of how much. In my view Mr. Scarrow is too high and Mr. Cino too low. The right amount is somewhere in between.
[24] In my view a reasonable amount of immediate depreciation is $10,000.
[25] With respect to the ACV I do not accept Mr. Cino’s definition. It is well known that a person generally gets less for their car “selling” or trading it in to a car dealer than selling it privately. In this case however given the amount of damage to the vehicle and the break on tax I accept Mr. Scarrow’s opinion that the plaintiff likely would not have received more in a private sale.
[26] Finally concerning accelerated depreciation, I do not accept Mr. Cino’s long held opinion that a well repaired vehicle does not suffer accelerated depreciation. I say that this opinion is long held as it was the subject of comment by Grauer J. over eight years ago in Signorello v. Khan, 2010 BCSC 1448:
[16] While it would be unfair to describe Mr. Cino as an advocate for the party who retained him, he struck me as someone who is certainly an advocate for his position that, in general, a motor vehicle that is damaged in an accident does not suffer accelerated depreciation so long as it is repaired properly. It is a position he has advocated for a long time. As he stated, he set out many years ago to prove that the use of the damage declaration by automobile dealers to reduce the trade-in value of vehicles subject to those declarations, was just a sales tool, and that so long as the vehicles had been repaired properly, they were in fact worth as much as similar vehicles that had not been damaged.
[17] To this end, he prepared and published studies in 1998 and 1999 and titled “Accelerated Depreciation in British Columbia”.
[18] But in my view, the statistics that support his studies are not helpful in solving the problem before us here. There is nowhere near enough data available to be able to extract the proposition for which he contends.
[27] I accept Grauer J.’s remarks. Not only does Mr. Cino’s opinion fly in the face of common sense, it is also at odds with his evidence at examination for discovery when he testified that most dealers would not want the car on their lot as it has too big a damage declaration on it. The only reasonable inference to be drawn from that comment is that it would be near impossible to sell. That is inconsistent with a car that is good as new.
[28] Having regard to all of the evidence I find damages for accelerated depreciation to be $13,500 plus taxes.