What is Automobile Diminished Value? [60 Second Law Bite]

Hey everyone is attorney Brian Russ coming at you with another 60 second law bite. So today’s topic is diminished value. The idea with diminished value is that a vehicle after a car accident is worth less than it was before the accident even if it’s repaired to the same state. Imagine you have two vehicles right next to each other, one has been an accident one has not, you cannot tell by looking at it, you cannot tell by doing an inspection. It’s just the idea that a consumer is not willing to pay as much for vehicle it’s been in an accident, that has not been an accident. A lot of times, car Insurance companies do not want to pay diminished value. They say, oh no, it’s not real or whatever. It is real. It is available, but it’s kind of like this unknown thing that a lot people don’t get unless they ask for it. So you have to ask for diminished value. Now, one thing is that diminished value is difficult to quantify. We don’t know what a reasonable consumer would pay less for a vehicle has been an accident and hasn’t been an accident. It’s further compounded if your vehicle has had multiple accidents, right? And so the idea is that it’s just difficult to quantify. It’s easy to quantify repairs, right? If you put it on a new bumper, you know how much time it took, you know, how much the bumper costs, etc. But you don’t know how much the value of the vehicle is less than. And so that’s one of the things with diminished value where the fight is, is because people say, oh my car’s not worth 5000 less and it’s like, well, maybe it is maybe it isn’t we don’t really know. It’s just this, this this pure economic idea. And the other thing that I get from a lot of people is as soon as they get into car accident, they don’t want to wait for repairs, and they come back and they say no, I want to collect as soon as I can and I don’t want to wait for the repairs to be done. It is true that you don’t technically have to wait for the repairs to be done. The whole idea though, is that to me you cannot defend a case where somebody’s car hasn’t been repaired. I’d say the only value of the car right now is in its current state, right? Like the whole idea of diminished value is you say the vehicle has now been repaired. But how much less is it worth? There’s no way to quantify how much less it’s worth now, if it hasn’t been repaired because you don’t know what the value of vehicle is in it’s repaired state. If a vehicle is repaired in six months, then from there you can kind of say, Okay, well, here’s what the market price is and so on. But if it hasn’t been repaired, all you have then is a damaged vehicle. You don’t have a repaired vehicle that has less value and so the idea is that that value, that diminished value, does not exist until the vehicle is repaired. Or the diminished value is just completely different because it’s like comparing apples and oranges rather than Apple to an apple. And so I always recommend you wait until it’s been repaired. And then you can actually do appropriate analysis. Alright, that’s it for today.

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