EPISODE 11 ~ SAVE MORE: Diminished Value On Your Vehicle: Get Compensated For Car Accident Damages

Here’s something I wish I had known about when another driver plowed into my five-month- old car: it’s called diminished value. The other driver’s insurance company paid to fix my vehicle, but just the fact that it had been in an accident diminished its value and I—and you—should be compensated for that loss.

After all, your car is no longer as sound. One former car dealer says he used to automatically offer thirty percent less for a trade-in if it had frame damage.

Many people don’t think about the new, lower value of their vehicle in the aftermath of an accident. Instead, we just worry about how long it’s going to take for the body shop to fix the car so we can get back to our lives.

If you have a newer vehicle or an expensive one, you must ask to be compensated for diminished value. The other driver’s insurance company won’t offer. It’s important to pursue a diminished value claim right away, because most states have a statute of limitations on property damage claims, often three years.

If the other driver’s company resists, consider small claims court to collect diminished value. It should be a fairly easy case to prove: What was your car worth before the crash? How much less is it worth now because it was in an accident? You can also find a bunch of law firms online that specialize in getting people paid for diminished value.

Some of those firms estimate that the average value lost when a vehicle is in an accident is 33 percent. So let’s say you owned a car that was worth just 15-thousand dollars. If you were able to win a 33% diminished value claim, you’d get a check for $5 grand. That’s real money. And, more importantly, it’s money you deserve to put toward your next car.

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