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diminished value claims
First things first.
Are you qualified for a Diminished Value Claim?
Is your vehicle within a decade of manufacture and boasts fewer than 100,000 miles on the odometer?
Does your vehicle maintain a clean accident record, or if it was involved in a previous accident, was the damage negligible?
Are you the sole owner of your vehicle, with no leasing arrangements, but acceptable loan payments or financing options?
Was another driver responsible for the accident that involved your vehicle?
if everything's a YES, now you have to understand:
What is Diminished Value?
Diminished value represents the contrast between a vehicle's pre-damage market worth and its diminished value post-repair.
It's crucial to distinguish diminished value from typical car depreciation, which occurs as vehicles age and naturally decrease in value.
Diminished value denotes an expedited depreciation triggered by the vehicle's damage history. Even if repaired impeccably, its value will still decline.
Why?
Because accident damage significantly diminishes demand for your vehicle. Prospective buyers post-accident will seek substantial discounts to mitigate future issues, expenses, and safety apprehensions.
There are three types of Diminished Value:
IMMEDIATE DIMINISHED VALUE
It's the discrepancy in market value right before the damage occurs and immediately afterward (pre-repairs).
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For instance, if a vehicle was valued at $30,000 just before the accident, and now, in its damaged state, it's only appraised at $10,000 due to the lack of repairs.
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Calculating the difference: $30,000 – $10,000 = $20,000 Immediate diminished value.
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Immediate diminished value claims are relatively rare since most individuals opt to repair their vehicles post-accident.
INHERENT
DIMINISHED VALUE:
It's the distinction between a vehicle's market value before and after the harm, a consequence of its accident or damage history.
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While repairs can reclaim some of the lost value, they cannot fully restore it. Despite thorough repairs, the vehicle's value remains below its pre-damage worth due to its history of damage. This is the most common form of diminished value, and the type for which insurance companies typically provide compensation.
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For instance, if a vehicle was valued at $40,000 just before the accident and, after proper repairs, it's assessed at only $32,000.
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Calculating the difference: $40,000 – $32,000 = $8,000 Inherent Diminished Value.
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Even with top-notch repairs, potential buyers are hesitant to pay full price for a vehicle with a known history of damage.
REPAIR-RELATED DIMINISHED VALUE:
Subpar collision repairs can lead to a decrease in market value, often evident in issues like mismatched paint or misaligned body panels with noticeable gaps.
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Repair-related diminished value typically arises from the repair facility's shortcomings and reflects poor workmanship.
Unlike inherent or immediate diminished value, which insurance companies may cover, repair-related diminished value is usually the responsibility of the repair shop. It stems from their error and is not typically included in insurance claim coverage.