How To Calculate The Diminished Value Of A Wrecked Car

Marc Skirvin
Marc Skirvin

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Calculate Diminished Value of Junk Car
What’s this car worth? Calculate the diminished value.

Property damage to your car can occur at practically any time you’re on the road. That type of damage can result from anything like a minor vehicle to vehicle collision, a vehicle to stationary object collision or even a major multiple vehicle accident—one that results in personal injuries, too.

No matter the type of accident you may experience, just know that the prospect of you having your vehicle getting damage is a very real prospect, one that you need to keep in mind when you’re on the road at any time.

As long as you have car insurance, you’ll be able to make a property damage claim against the parties who may have caused the accident. The process is pretty simple, however, some cases may get a little complicated, thanks to what’s known as diminished value.

About diminished value

Diminished value refers to the loss in value of any vehicle that has been damaged in any way. Based on the severity and type of damage sustained by that particular vehicle, some vehicles can actually lose a lot of value after getting damage. In some cases, a vehicle may have a portion of its previous value restored, particularly if its repair quality is able to make the vehicle close to its original condition.

In most cases, a diminished value expert is the professional responsible for calculating the true diminished value on any vehicle that has experienced different types of damage.

Determining diminished value

Diminished value in a wrecked vehicle generally consists of the ‘remaining difference between the vehicle’s original value (before the accident) and its restored value.’ Finding out the diminished value of a vehicle is rather important, particularly if you’re planning to sell a vehicle that may have experienced damages from an accident.

Diminished value may get classified as a different ‘type’ of diminished value in some circumstances, particularly depending on what happened to the vehicle.

To provide some examples, repair-related diminished value often involves situations where repairs and other improvements impeded the condition of the vehicle, instead of improving it. Claim-related diminished value involves the depreciation in value of a vehicle that was refused repair coverage from an insurance company.

The most common ‘type’ of diminished value is inherent diminished value or, in other words, the actual cash value that your vehicle may have lost after sustaining damages.

How to calculate the diminished value of a wrecked car

It’s pretty simple to calculate diminished value. You only really need to subtract your vehicle’s value (after having its repairs completed) from the former total value that your vehicle had before sustaining its damages.

Calculating that figure generally starts with getting the current market value of your vehicle, specifically the value before the accident. There are many online resources that collect market data throughout the year, so you won’t have any trouble finding one. Don’t forget to consider all of the information that you know about your vehicle (make, model, etc) to get the most accurate market values possible.

Get the total cost of repairs on your vehicle, which should be on your invoice and/or receipt for the service. You should subtract the former value from its repair costs to find its diminished value.

After finding that figure, check your results. Most people who find that the diminished value is about one-third or more than its original value may be entitled to receiving a ‘diminished value claim’ from their insurance company. Of course, always check your state’s own information on diminished value and the value of your vehicle in your state’s market for accurate information.

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About the Author


Marc is the Co-Founder of Cash Auto Salvage and Director of daily operations. He retired from a leading Internet Marketing company in 2013 and has been involved in the automotive industry ever since.

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