Motor Category Motor: car insurance and finance

How to estimate diminished value after accident

Diminished value, also called "loss of value," is the difference between the value of your vehicle after a car accident, and the market value of your car had it not been in an accident. Diminished value takes into account not only what the vehicle is worth if repairs are not completed, but how much the vehicle's value loses even after being fixed, as repaired vehicles tend to fetch significantly less than vehicles with no accident history.

Research the value of your car just prior to the accident. Before you can calculate the diminished value, you will need to figure your car's previous value. To do this, refer to a used car guide like Kelly's Blue Book or Carfax. In addition to selecting the correct year, make, model, colour, and any extra features your car has, you will also need to choose the accurate condition of your vehicle. You can also ask your car dealer for a more accurate estimate of your vehicle's prior value.

Determine the value of your vehicle post-accident. This can be done at the same dealership you inquired about your car's previous value. You can also ask for a detailed estimated of the current value of the car from any repair shop, or have them provide you with an estimate before and after you have them do the repairs. You may also be able to determine the value using a car guide, but the estimate will be far less accurate than an estimate from a dealer or shop, so it's a better idea to allow a live person to make the determination.

Do the math. The formula for determining the estimated diminished value after an accident is:

Value of Vehicle Prior to Accident -- Value of Vehicle After Accident = Estimated Diminished Value

Subtract the value of the vehicle after the accident from the estimated value of the vehicle prior to the accident. This will give you an estimated diminished value of your car. Remember, this is strictly an estimate, and the result you get can vary quite a bit from the result that say, your insurance company determines if you are filing a claim to recover the diminished value.


  • If you are filing a diminished value claim with your insurance company, the company determines the value that they will compensate you for. Of course, if you disagree with the amount they are offering you to settle the claim, you can reject their offer and fight for the amount you believe is fair.


  • Your state may have different regulations in place that govern how to estimate diminished value after an accident. Check your state laws, or contact your insurance company for more information. Many insurance companies do not pay out diminished value claims; some states prohibit diminished value claims entirely.

Things Needed

  • Vehicle's prior value
  • Vehicle's post-accident value
  • Used car guide