Once a vehicle has been involved in a collision, there is sometimes
diminished value. (The value loss of a vehicle as a result that it has
been in a collision and repaired) There are three different types of
diminished value. Each one is separate and combined together is the ultimate
diminished value.
Anything done on the vehicle that was not done correctly or completely that
shows the vehicle has been repaired. This type of diminished value is
judged by various factors. Has the vehicle been repaired back to the same
state and shape so that it will react the same was in the next collision as it
did in this collision. Areas that repairs are often not done correctly
include: lack of 3 dimensional measurement/improper structural alignment. Lack
of proper corrosion protection (seam sealing, improper welding, improper
sectioning or repaired structural components that should have been replaced that
have been repaired.
The measure of repair related diminished value is the
cost to properly repair the vehicle. This can often times exceed to cost
of the original repair.
Any needed repairs that were not paid for or denied. The measure of the Insurance related diminished value is the cost to properly repair the vehicle back to the same state and shape as it was so that the vehicle performs the same way in the next collision as it did in this collision and is cosmetically correct. The measure of this type of diminished value is how much would it cost to do the proper repair.
Inherent Diminished value is not a concern of the collision repair shop. Inherent Diminished value is a projection of the loss of value of a subject vehicle after a collision. Inherent Diminished value assumes that the repairs that were done to the vehicle were done completely and correctly. Inherent Diminished value does not include repair related diminished value (improper/incorrect repairs) or Insurance related diminished value (needed items for a proper repair that were not paid for or denied). These items are handled separately and can add to the overall diminished value. Inherent Diminished value is the amount of money that would need to be taken off the retail selling price of the vehicle with full disclosure to the vehicle buyer that it has been in a collision.
The amount is only a projection because the ultimate Inherent Diminished value is decided after the vehicle has been sold on a retail basis
The difference in the amount depends on the vehicle age, extent of damage and
type of vehicle. Inherent Diminished value is determined by comparing the
vehicle value prior to the collision and the value after the collision
(after a complete and proper repair).