Diminished Value in California
Given the option to purchase a vehicle that had been in an accident and a vehicle that was absolutely identical in every way except it had no prior accident history, which vehicle would you prefer? Asked a little differently, how much less would you have to pay for the damaged vehicle to purchase it over the identical vehicle that had not been in an accident? This amount is known as inherent diminished value.
It is important to note that inherent diminished value (or diminution in value) assumes that any repairs to the vehicle have been made, and that they have been made optimally. Despite those repairs there is a stigma associated with the vehicles damage history that will follow it around forever and that damage history will make it less valuable than had it not been in accident.
There are two other types of diminution in value:
- Repair related diminished value
- Insurance related diminished value
This website focuses on inherent diminished value because that is the type of diminished value that most people are trying collect and is the most difficult type to collect from insurance companies.