Anytime a car is in an accident, the value is inherently diminished because of the stigma people place on vehicles that have been in accidents. It doesn’t matter if the car has been repaired flawlessly. There are three different categories of diminished value that can help explain why these claims are allowed.
Immediate Diminished Value. When a car is in an accident, there is an immediate diminished value. This is the difference between how much the car is worth if you sold it or traded it in right after the crash. In this case, you would seek the difference between what it was worth before the accident and what it would be worth after the accident.
Inherent Diminished Value. Inherent diminished value is the issue of cars being inherently less valuable once people are aware that they’ve been involved in an accident. It doesn’t matter how perfect the repairs appear. It doesn’t even matter if the car is now in better shape after the accident than before. The car is still going to be worth less in most cases simply because it was involved in an accident.
Repair-Related Diminished Value. This refers to the reduction in value after a car has been repaired. In some cases, the parts used might not have been as good as the original parts, or the repairs weren’t done perfectly. This clearly reduces the value of the car, even once the repairs are completed.