CAADE Total Loss and Valuation 4

Question 1

When a salvage title is issued to a total loss vehicle that is subsequently repaired and re-titled, it typically receives a:

Accepted Answer

Rebuilt or reconstructed title indicating prior total loss history

Answer

Repaired salvage vehicles are re-titled as 'rebuilt' or 'reconstructed,' permanently disclosing their total loss history to future buyers.

Question 2

A vehicle with a 'certificate of destruction' (COD) title is:

Accepted Answer

Designated never to be retitled or returned to road use, typically for severely damaged vehicles

Answer

A COD is issued for vehicles so severely damaged (flood, fire, structural) that they must be destroyed and can never be legally returned to the road.

Question 3

In a total loss involving a leased vehicle, who typically owns the vehicle and receives the ACV settlement?

Accepted Answer

The lessor (leasing company), as the legal vehicle owner

Answer

In a lease, the lessor retains ownership of the vehicle, so the ACV settlement is paid to the leasing company, not the lessee.

Question 4

Which of the following best defines 'diminished value' in the context of a vehicle that has been in an accident but fully repaired?

Accepted Answer

The loss in market value a vehicle suffers simply due to its accident history even after full repair

Answer

Diminished value (DV) is the market value loss that persists after full repair because buyers discount vehicles with accident history.

Question 5

The '17c formula' is commonly associated with which aspect of total loss and valuation claims?

Accepted Answer

A structured method for calculating inherent diminished value used by some insurers

Answer

The 17c formula originated from a Georgia court decision and is widely used by insurers as a baseline methodology for calculating inherent diminished value.

(CAADE) Certified Automotive Appraisal and Damage Estimator Practice Test

(CAADE) Certified Automotive Appraisal and Damage Estimator Practice Test

CAADE Total Loss and Valuation 4