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What is Diminished Value?

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Pre-Accident

$54,749

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Post-Accident

$46,454

Sport Car

Filing A Diminished Value Claim In New Jersey

Statute of Limitations to File: 6 Years 

File First Party Claim: Excluded 

File Third Party Claim: Yes 

Diminished Value Through Uninsured Motorist Coverage: Check your policy declarations

New Jersey Small Claims Max Filing: $5000, attorney representation permitted

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Valid New Jersey
Case Law

 New Jersey law holds, "the general primary rule is that, in the absence of the total destruction of an automobile the measure of damages is the difference in its value immediately before and after the injury." Jones v. Lahn, 1 N.J. 358, 362, 63 A.2d 804 (1949) (citing Hintz v. Roberts, 98 N.J.L. 768, 121 A. 711 (E. & A.1923)). 

If the value of an automobile before it was damaged was greater than it was after repair, the owner is entitled to a sum for the depreciated value of automobile, in addition to cost of repair. Fanfarillo v. Eastend Motor Company, 172 N.J.Super. 309, 411 A.2d 1167 (Sup. Ct. NJ, Appellate Division) [emphasis added]. 

 

Expressed similarly, when repairs still leave the vehicle in a less valuable condition than immediately before the accident, a plaintiff is entitled to prove his full damages by proving the cost of repair and the depreciated value after repair, or by showing the value of the vehicle immediately before and after the accident. Premier XXI Claims Mgmt v. Rigstad, 381 N.J.Super. 281, 885 A.2d 521 (Sup Ct Appellate Div 2005). 

Vehicle Trust v. Panter, 2019 N.J. Super. LEXIS 28 (App. Div. Feb. 28, 2019), notes the Appellate Division decided that a motor vehicle owner may recover for diminution of value of the owner’s motor vehicle that was involved in the accident, as long as the proper proofs are presented.

 
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Richard W. Taylor, President-Managing Partner
NPN #16425692

Richard was a great help in assisting us with our total loss claim with our own insurance company. Not only did he get us fair market value but he was a pleasure to deal with, extremely helpful, extensively knowledgeable, and couldn't have been more responsive. I cannot recommend him highly enough.

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Richard E. Taylor, Sr. Vice President-Partner
 
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Understanding Automobile Diminished Value

Introduction: In the realm of automobiles, the concept of diminished value is crucial yet often misunderstood. When a vehicle is involved in an accident, its value can decrease even after repairs have been made, due to factors such as damage history and perceived reliability. This phenomenon is known as diminished value, and comprehending its implications is essential for both buyers and sellers in the automotive market.

What is Diminished Value? Diminished value refers to the reduction in a vehicle's resale worth after it has been damaged and subsequently repaired. Even if the repairs are performed meticulously and restore the vehicle to its pre-accident condition, the fact that it has a history of damage can impact its value in the eyes of potential buyers.

Types of Diminished Value:

  1. Inherent Diminished Value: This type of diminished value occurs due to the perception that a vehicle with a history of accidents is less desirable than a similar vehicle with no such history, even if repairs have been carried out expertly.

  2. Immediate Diminished Value: Immediate diminished value is the reduction in value that occurs immediately after an accident. It reflects the decrease in the vehicle's worth due to the visible damage it has sustained.

  3. Repair-Related Diminished Value: Repair-related diminished value occurs when repairs, although performed properly, are not sufficient to restore the vehicle to its pre-accident condition. In such cases, the vehicle may still have underlying issues that affect its value.

Factors Affecting Diminished Value: Several factors can influence the extent of diminished value a vehicle experiences:

  1. Severity of Damage: The extent of damage sustained by the vehicle in the accident plays a significant role. Vehicles with extensive damage typically experience higher levels of diminished value.

  2. Vehicle Age and Mileage: Older vehicles or those with high mileage may experience greater diminished value since they are perceived to have less remaining useful life.

  3. Vehicle History: A vehicle's accident history, even if the damage has been repaired, can impact its value. Buyers may be wary of purchasing a vehicle with a history of accidents.

  4. Market Demand: The demand for a particular make and model in the used car market can affect its diminished value. Vehicles in high demand may experience less diminished value compared to those with lower demand.

How to Determine Diminished Value: Determining the diminished value of a vehicle can be challenging and often requires professional appraisal. Several methods may be used, including:

  1. Comparative Market Analysis: Comparing the value of similar vehicles with and without accident histories can provide insight into the diminished value.

  2. Professional Appraisal: Hiring a professional appraiser experienced in assessing diminished value can provide a more accurate valuation.

  3. Diminished Value Calculators: Online tools and calculators can provide rough estimates of diminished value based on factors such as vehicle make, model, age, and extent of damage.

Conclusion: Automobile diminished value is a significant consideration for both buyers and sellers in the used car market. Understanding the factors that contribute to diminished value and how to assess it accurately can help individuals make informed decisions when buying or selling a vehicle. Whether seeking compensation for diminished value after an accident or negotiating a fair price for a used car, awareness of this concept is essential for navigating the complexities of the automotive market.

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