When a vehicle is involved in an accident, most drivers assume that once repairs are completed, the car’s value returns to normal. Unfortunately, that’s rarely the case. Even after high-quality repairs, a vehicle with an accident history is almost always worth less than a comparable car with a clean record. This loss in resale value is known as diminished value, and a diminished car value appraisal is the key to proving and recovering that loss.
Diminished value refers to the reduction in a vehicle’s market value after it has been damaged and repaired. Buyers and dealerships rely heavily on vehicle history reports, and the mere presence of an accident—even a minor one—can significantly lower a car’s resale or trade-in value.
There are three commonly recognized types of diminished value:
Immediate diminished value: The loss in value right after the accident, before repairs.
Repair-related diminished value: Value lost due to incomplete or substandard repairs.
Inherent diminished value: The most common type, reflecting the loss in value simply because the car now has an accident history.
Most diminished value claims focus on inherent diminished value.
A diminished value appraisal is a professional report prepared by a qualified vehicle appraiser that calculates how much value your car lost as a result of the accident. Unlike generic formulas used by insurance companies, a proper appraisal analyzes real-world market data, including comparable vehicle sales, pre- and post-accident values, mileage, condition, and regional market trends.
This appraisal serves as documented evidence when filing a diminished value claim with the at-fault party’s insurance company.
Insurance companies may offer a diminished value settlement, but these offers are often based on internal formulas designed to minimize payouts. One common example is the “17c formula,” which has been widely criticized for undervaluing actual losses and lacking market accuracy.
Without an independent appraisal, vehicle owners may unknowingly accept settlements that fall far below their car’s true diminished value.
A professional appraisal provides:
Credible, third-party documentation
Market-supported valuation methods
Strong negotiation leverage
Support for disputes or legal action if necessary
In many cases, the cost of an appraisal is small compared to the additional compensation it helps recover.
If your vehicle was damaged due to another driver’s fault and has a documented accident history, you may be entitled to compensation for diminished value. This applies especially to newer vehicles, luxury cars, low-mileage vehicles, and cars with significant repairs.
A diminished car value appraisal protects vehicle owners from hidden financial loss after an accident. Repairs restore function and appearance—but they don’t erase history. If you plan to sell or trade your vehicle in the future, understanding and documenting diminished value can make a meaningful difference in your financial outcome.
If you’re looking to regain the value of your car after an accident or want to understand your vehicle’s value, contact ADR Claims for professional car appraisal and diminished value claim assistance.