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Diminished Value

Let’s talk a little bit about diminished value as it pertains to your vehicle. A general definition is the value of the vehicle that is perceived reduced because of an accident or some kind of damage done to your vehicle. Even though the vehicle is repaired correctly, in most cases, there is a perceived drop in value since it is not in it’s original state.



So let’s back up a minute and take a look at a few points, if you decide to sell your car after an accident:
Diminished value

  • There may not be any written proof of an accident on your vehicle, most times people depend on Carfax to let them know about the car. However, that is not very reliable as you can read more here. Most reported items are not accurate, a bumper scratch could be listed as an accident and vice versa. Some insurance companies do not report the claims, some do and the same goes for the collision repair shops. There just doesn’t seem to be a standard for this yet. Laws are different for every state and they change as well. Just be aware  of that.
  • A vehicle repaired back to it’s original form done by a professional may be very hard to tell it was damaged. In such a case there is no need to be worried about it, however, put two exact same cars side by side with no damage to either. Mention that one was damaged and the other not , which one would you choose? I am not advocating lying about your car but just to prove a point in “perceived” value.
  • Now if there is proof of an accident, let’s consider the degree of damage to try and come up with a diminished value. If you search for diminished value calculator online, you will find a few ways to actually figure the cost. However, these methods are controversial and not used by some insurance companies.  Knowing what was done to the car is critical, was there frame damage, body damage, non structural damage, paint damage or just a repair. These are key areas in coming up with a figure, without knowing them it would make it hard for an appraiser to come up with a diminished value appraisal.


The most common type of diminished value is called inherent diminished value. Simply put is the value of the vehicle after the best possible repair that can be achieved is done. The only factor being the written proof that would affect the price. On the flip side of that would be repair related diminished value. If a substandard repair was done, this would have a greater effect on a claim. If this scenario is caught right after the work is done, another route could be taken. If the insurance company was involved it would be beneficial to inform them of the substandard work done by a body shop. The possible end result would be a rejected repair, which at that point would deem the vehicle a total loss.  Causes for a rejected repair usually are major problems such as frame not straightened correctly, misaligned body, faulty parts, and generally items that are hard to fix once the vehicle is repaired. A paint mismatch can usually be redone without much problems.