Diminished value of a vehicle after an accident

Diminished value of a vehicle after an accident is the difference in your car's market value before and after an accident, retain Personal Injury Attorney today. So you’ve been in an auto accident. In addition to being physically injured, your car was most likely damaged and either totaled or repaired. (For more information about total losses, see my separate article on the topic).

When your car is totaled you are paid its cash value. But if your car is repaired, you are given back your vehicle, with replacement parts, body shop work and new paint. Shops and insurance companies say that your car is restored to its pre-loss condition. BUT is it truly back to its pre-loss condition?

The reality is that once your car has been repaired after an accident it loses value. We all have heard of CARFAX and other vehicle searches, which reveal whether a car has prior damage or losses. We also all know that if presented with two identical cars, we would pay LESS for the one that had been damaged and repaired.

An example:

You are stopped at a red light. Another driver slams into the back of your stopped SUV. The driver’s insurance company offers to pay for the damage and you have your SUV fixed at your choice of reputable shops in the area. The accident makes you think about how life is short, and that you want to have fun while you still can. So you decide to trade in your SUV for a really fast sports car.

Your SUV is a one year old Subaru. You bought it for $29,000. The mileage is low and it has no damage on it. According to Blue Book and the car is worth $25,000. So you list it on Auto Trader or Craigslist for $25,000 and the buyers start showing up to see it. Buyers ask “has it ever been in an accident?” Once
you tell them “yes” the buyers walk away. None of them are willing to pay $25,000 because of the accident. The best offer you get is $19,000, which feels like a lowball offer to you. After all the car has low miles, shiny paint, good tires.

Next you decide to try trading it in at a dealership. The dealer runs the VIN and based on the prior accident, only offers you $16,000 for a trade.

If before the crash your Subaru was worth $25,000, and the best offer you can get for it after the accident is $19,000, then the $6,000 difference is the diminished value. No matter how nice the vehicle looks, even if it was repaired with quality parts and back to “pre loss” condition, the accident is a permanent blemish that will not go away. And you should not be forced to take that loss, especially since the damage was not your fault.

How can I recover for diminished value of a vehicle after an accident?

Both Washington and Oregon are diminished value states, which means you may be entitled to the diminished value of your vehicle after an auto accident. There is a limited time for you to pursue these claims with the insurance company. For Washington it is 3 years and for Oregon it is 6 years from the date of the accident. After those dates the insurance company is not required to pay a diminished value claim. If you were hit by an uninsured driver you may also be able to recover through your underinsured motorist coverage.

How do I recover for diminished value of a vehicle after an accident?

You can hire a professional service to examine the car and the used car market, to determine the diminished value. Or you can find the current value of your car (using Kelly Blue Book, Edmunds, etc) and provide proof of what people are willing to pay for it. This could be a quote from a dealership or private party in writing. This information is presented to the claim adjuster who should then make an offer to reimburse you for the diminished value.

Feel free to call for an appointment or a phone conference at no charge.