If you have your vehicle appraised after an accident, there may be some talk about diminished value. This is not information that you should consider unimportant. In fact, knowing the diminished value could be helpful in your case. Here are some of the more common questions people ask about car diminished value, and why you should be paying attention.
What is Meant by Diminished Value?
Diminished value has to do with the worth of something before it’s damaged and after the damage takes place. As it relates to automobiles, diminished value is the difference between what the car was worth before an accident, and what it will be worth once the repairs are made.
The amount of diminished value will vary from one instance to the next. In general, damaged vehicles that are newer will sustain a greater loss in value even after the repairs are made. By contrast, an older vehicle may not undergo a lot of diminished value because the worth prior to the accident was not that high.
Why Does It Matter?
Knowing the diminished value of your repaired vehicle can be helpful in more than one way. Depending on where you live and the specific circumstances, you may be able to write of all or part of that value on annual taxes. At other times, you may be able to use that diminished value as a means of adjusting your auto insurance and locking in a lower premium.
A lot depends on how much of a loss in value occurred. Once you have the appraiser’s report in hand, it will be easier to determine how to make the most of the information.
Can You File a Claim For Diminished Value?
There’s a good chance that you can file a claim for car diminished value with the insurance provider. This may help you recoup at least part of the difference. Keep in mind that you may need to report any value you recoup on your taxes. A tax professional can tell you if that applies in your case.
A successful claim cannot restore car value. What it can do is provide cash that you can use for any purpose that you like. Your agent can help you work through the process to file this type of claim.
Is It Worth Seeking Diminished Value?
Only you can decide if filing a claim for diminished value is worth the effort. If you have reasons to think that the claim will be successful, then why not give it a try? You may end up with money that would otherwise be lost.
There’s also the possibility that you can use the resources from that diminished value claim to make more improvements to the vehicle. Even if that does nothing to help the value, those improvements could make the car more comfortable.
If your vehicle has been involved in an accident, talk with an appraiser today. Once the vehicle is evaluated and you know what the diminished value happens to be, it will be easier to decide what should be done with that information.