Two main types of diminished value claims exist:
1) Inherent diminished value:
As the name implies, an inherent loss of value is the value the vehicle loses simply because it has been involved in an accident. The vehicle loses value by the mere fact that it now carries an accident history that will probably be disclosed on a vehicle history report. The vehicle is now considered “damaged goods” and is less desirable to potential buyers. Inherent diminished value occurs regardless of the quality of repairs made to the vehicle. Even if the repairs were excellent and the vehicle appears to look and drive the same as it did before the accident, it has still lost value.
2) Repair-related diminished value:
Repair-related diminished value refers to the loss in value sustained by a vehicle involved in an accident because of substandard repair work performed on the vehicle by an auto body shop or collision center. The repairs are less than optimal and as a result, the vehicle is not the same as it was prior to the accident. Sometimes, the vehicle may simply look different than it did before the accident. This occurs when there is paint overspray or when the new paint doesn’t match the old paint or when different parts are put on. One headlight that is repaired may no longer match the other headlight. Other times, the vehicle does not run or feel the same due to poor repairs to mechanical parts of the vehicle.