What is Diminished Value?
If you’ve been in an auto accident, you may be entitled to a diminished value claim from your insurance company. Diminished value is the loss in value of your vehicle after it has been in an accident. Almost every vehicle that has been in a wreck will have some form of diminished value.
A study by the Insurance Research Council found that 55% of consumers would not buy a car that had been in an accident. 81% would not buy a car that had been in an accident unless they were given a large discount. Our own research suggests that these numbers may even be higher.
Understanding Diminished Value Claims
Imagine you have a one-year-old car that is worth $35,000. One day, you are hit by another car and the damage costs $4,000 to repair. Your insurance company pays for the repairs.
You might think that your car is still worth $35,000 after it has been repaired, but this is not the case. The car’s value has diminished because it has been in an accident. Even if the repairs are done perfectly, the car will be less desirable to buyers because of its accident history.
In some cases, a car that has been in an accident cannot be sold as a “certified used vehicle.” This will significantly impact the car’s value, by as much as 30%!
This is where diminished value comes in. Diminished value is the difference between the car’s pre-accident value and its post-accident value. In this case, the diminished value could be as much as $10,000.
If you list your car for sale for $35,000, the first question a buyer will ask is, “Has this car been in an accident?” Even if you don’t disclose the accident, the buyer may still be able to find out using online tools like Carfax.
Once the buyer finds out about the accident, they may no longer be willing to pay $35,000 for your car. Instead, they might offer you $25,000. In this case, the diminished value would be $10,000.
To calculate diminished value, you can subtract the sale price of the car from its pre-accident value. In this case, the calculation would be:
$35,000 before accident
-$25,000 sale price
———————————————————
= $10,000 in diminished value!
Even if you have already settled with your insurance company for the cost of repairs, you may still be able to file a diminished value claim. This is because diminished value is the difference between the car’s pre-accident value and its post-accident value. If the repairs were done recently, the diminished value may still be significant.
The insurance company that will pay your diminished value claim will depend on who was at fault for the accident. If you were at fault, your own insurance company will pay the claim. If the other driver was at fault, their insurance company will pay the claim.
Even if you’ve already settled with the insurance company on the body damage, you can still file a separate diminished value claim if the repairs were done recently.
Auto Value Professionals is the nations leading diminished value firm. Contact us today for a free consultation and learn how we can help you get the compensation you deserve.
Call now: (561) 345-1868