- What is diminished value?
- Inherent diminished value is the decrease in fair market value a vehicle suffers as the result of a collision, irrespective of the quality of repair. Not every vehicle suffers diminished value, and not every type of damage creates diminished value. However diminished value almost always occurs with more than slight damage — particularly when a late model, classic, or specialty vehicle is involved in the collision.
- When a vehicle has been damaged, merely returning the vehicle to its prior appearance and function does not return the vehicle to its pre-loss condition. Issues regarding the vehicle’s warranty arise which may include having the warranty restricted or even voided. State and Federal laws may require disclosure of damage and repair. Sales tax value may be lost. Vehicle histories are easy to track, and an adverse history can cost thousands of dollars to a vehicle owner. So merely properly repairing the vehicle can never return it to what it once was. Damage to a vehicle’s pedigree is like stamping “Damaged Goods” across a vehicle’s title.
- Who is affected by diminished value?
- Consumers, Financial institutions, Leasing companies, Insurers, Collision industry
- Financial Institutions and Leasing Companies: Interested in alleviating a majority of surcharge conflicts with customers?
- Most people involved in vehicle leasing are aware that conflicts often arise between banks or leasing companies and customers over lease-end inspections and surcharges. The culprit usually causing large surcharges is diminished value. We can provide avenues to leasing organizations and customers to minimize these conflicts. Contact our Lease Group for information and assistance on how to prevent and resolve surcharge conflicts.
- We can provide an accurate dollar amount quantifying diminished value. Contact our Diminished Value Group for more information.