Diminished Value


OK, suppose you’re shopping for a used car and you find something you like for a price you feel is fair. Upon closer inspection, you suddenly realize that the car has been damaged in an accident and the repairs were of substandard quality. Certainly you don’t want to pay as much for the car now that you’re aware of the collision damage. And when you sell or trade your vehicle, you can expect the same or more scrutiny from your potential buyers. Also, if you lease a vehicle and your lease runs out, should you decide to turn the vehicle in, you will be held responsible for all detectable collision damage.

To put it more plainly, ANYTIME a vehicle is damaged in an accident, that damage will cause the vehicle’s market value to depreciate. This depreciation in the vehicle’s market value has come to be known in the collision repair industry as DIMINISHED VALUE. Diminished Value, or DV, can occur in any or all of several ways.

DV caused by insurance company neglect: this type of diminished value occurs when the insurance company covering the cost of the repair refused to cover the cost of one or more of the procedures required to properly return the vehicle to pre-accident condition.

DV caused by repair facility neglect: this type of diminished value occurs when the technician(s) working on the vehicle do not properly perform all procedures required to correctly return the vehicle to pre-accident condition. Remember that a repair facility is not legally required to perform any procedures that are not covered by the insurance company. By obtaining documentation of what procedures the insurance company is covering, you can better determine who is responsible for the diminished value of your vehicle.

Inherent DV: this is diminished value caused by the common belief that a damaged vehicle is never the same again. Regardless of the quality of the repairs or the insurance coverage, the average consumer is less willing to pay full retail value for a vehicle that has been damaged in an accident; the potential buyer perceives the car as less than whole.

Insurance companies ALL deny that DV is covered in their policies, yet they are ALL losing cases to consumers almost daily. Most cases are settled in small claims court by well prepared consumers with thorough documentation. Most insurance companies will continue to fight DV cases even though they are legally responsible for ALL accident related loss, which includes the diminished value of your vehicle.