Quick Answer
Diminished value (DV) is the cost of your car’s loss of reputation following an accident (we think it’s hysterical that a car has its own reputation, but that’s a joke for a different day). Even if your car is repaired by a quality and qualified professional to restore it back to its pre-accident condition, potential buyers won’t be willing to pay the same price. That difference in the pre-accident value of your car to the post-repair value of the car is how diminished value is calculated.
There are three types of diminished value.
Inherent diminished value is the most common form of DV after an auto accident. This type of diminished value is recognized as existing solely because the history of damage to the car will reduce its value on the market. This assumes repairs have been done correctly.
Immediate diminished value represents the difference in value of the car immediately following the accident before any repairs are made. This wouldn’t be applicable in most cases because insurance will cover the cost of repairs.
Repair-related diminished value is the loss of resale value to the car due to faulty repairs. This loss in value is beyond the reputational damage from the accident and can only be claimed in instances where repairs cannot be remediated.
In most cases following a crash a claim for inherent diminished value will be made. Each state has slightly different criteria for eligibility and calculation of DV but there are a few commonalities.
- There is a cutoff for age (often 7-10+ years) and mileage (typically 100k+)
- Age and mileage detract from the DV value
- Severity of damage to car increases the DV value
Mighty is using its data-driven, nerdy know-how to help people after an accident. Mighty Law lawyers charge lower rates and commit to a Code of Conduct that forbids behaviors typical among billboard injury attorneys, such as quid pro quos for referring people to their doctor friends. Plus, you can work with a Mighty Law lawyer at no cost for up to 60 days if no lawsuit or demand letter is filed.

About the author
Joshua is a lawyer and tech entrepreneur who speaks and writes frequently on the civil justice system. Previously, Joshua founded Betterfly, a VC-backed marketplace that reimagined how consumers find local services by connecting them to individuals rather than companies. Betterfly was acquired by Takelessons in 2014. Joshua holds a JD from Emory University, and a BA in Economics and MA in Accounting from the University of Michigan.

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