What is Diminished Value?

Diminished value is not the same as depreciation. Depreciation is the result of time and use.  The older a car is and the more miles it has determines the amount of depreciation. A vehicle that is worth $XX,XXX when it is new can roughly be predicted to be worth $YY,YYY in the future, presuming average mileage and proper care.

Diminished value is the sudden “catastrophic” loss of value. Diminished value can’t be predicted – some vehicles will never sustain diminishment – because they might never be in an accident. Even if it could be predicted that a vehicle would be in an accident, it would be impossible to predict the severity; it could be a minor fender-bender in a parking lot or it could get hit in the rear by a tractor trailer going 50 mph.

Defining Inherent Diminished Value

Merriam-Webster’s dictionary (online version) defines these terms as follows:
Inherent – involved in the constitution or essential character of something: belonging by nature or habit: INTRINSIC
Intrinsic – belonging to the essential nature or constitution of a thing
Diminish – to make less or cause to appear less; to lessen the authority, dignity, or reputation of
Value – the monetary worth of something
Diminution of Value, more commonly known as diminished value or DV, can be defined as the loss of financial worth of a vehicle due to damage history.

Imagine two vehicles parked side by side that are both the same year, make, model, options, mileage, color and price.

The only difference is that one recently had $18,000 worth of collision repairs. If the price were the same, the only difference being the accident history, which one would you buy? Exactly!!! That’s the concept of diminished value.

The difference in how much you’d be willing to pay between the two vehicles, the amount the price of the previously damaged vehicle would have to be reduced, is the diminished value.

In conclusion, diminution of value, diminished value, or DV, is a very real aspect of the loss.

Diminished value occurs whenever there is prior damage to a vehicle which  consumers will no longer pay full price for.


It is the mission of Collision Consulting to prepare our appraisals based upon fact, without regard to special circumstances such as “sentimental value” or referral sources or any entity with an interest in the outcome.

It is our duty to determine the facts and render our professional opinion based on those facts. This approach allows us to factually testify under oath should the claim go to litigation.

Our sole position is: IT IS WHAT IT IS.

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