What is Diminished Value?
Diminished Value (DV) is the loss in market value that occurs when a vehicle is wrecked and repaired. A reasonably intelligent consumer will not pay the same price for a wrecked, then repaired vehicle, as they will for a vehicle with no prior accident history. Even if the repairs were done well, the vehicle will still lose value. Here is an example. You decide to purchase a used vehicle. You go to a car dealer and look at several of the same model cars. You narrow it down to two that just happen to have the same mileage, overall condition, year, options, etc. The salesman pulls a vehicle history report and discovers that one car has been involved in an accident, the other was not. You would never know it from looking at the cars. Now, which car would you pick – the one involved in an accident or the one that wasn’t? Most people are going to pick the one with the clean history. The one not chosen has diminished value. If your was involved in an accident, and you were not at fault, you may be entitled to diminished value to make you whole for your pre-accident vehicle value.