Diminished value is the automatic loss in value from a collision.  It is common knowledge that extensive auto body damage permanently and severely stigmatizes expensive, rare vehicles with very low miles.  The accident may also show up on Car Fax/Wreck check without identifying the extent of the accident/repairs, stigmatizing the vehicle as a “potential” wrecked vehicle.  Almost every vehicle that has been in a wreck will have some form of inherent diminished value.  It has been estimated that 55% of consumers would not buy a car that had been in an accident, and 81% would not buy a car that had been in a wreck unless they were given a large discount.  Many survey results show the stigma may be even higher.

The proper measure of monetary loss for diminished value is the difference between the pre-loss fair market value of the vehicle before the loss, and the fair market value of the vehicle after the loss.  Diminished value is not determined at some future date, nor is the vehicle owner required to sell the vehicle.  The extent of a diminished value claim is determined by a comparison between the value of a vehicle pre-accident with the actual value of the vehicle after an accident which potentially resulted in autobody damage (even if repaired to the best of the ability of a repair shop).