In California, it is almost a must that a person drives a car. From getting to work to getting the grocery shopping done, almost everything requires a vehicle. However, it can be dangerous to drive because accidents do happen. When an accident occurs, something called diminished value can occur to your vehicle. Keep reading to discover what it is and then contact The Law Offices of Larry H. Parker at 800-333-0000 for a free legal consultation.
Diminished Value Refers to How Much a Car Has Reduced in Value After an Accident
In most cases, if a car has been involved in a car accident then it will lose value – even if it is fully repaired to like-new condition. Buyers can easily obtain a vehicle history report so they will know if a car has been in an accident. Research shows that if a buyer discovers that a car was in an accident, they are less likely to pay what they would have if the car had never been in an accident.
This is known as “stigma damage” meaning that even if the car is in perfect shape, buyers are less likely to buy it because it has a stigma attached to it. In California, this is known as diminished value. It means that if another driver is at fault for your car accident then you may be able to collect damages including the reduction in the value of your vehicle. Note that your own insurance company will likely not cover diminished value but will instead want to only pay to repair your vehicle.
How to Calculate Damages for Diminished Value
The purpose of calculating the diminished value on a vehicle is to ensure you can recover more than just the cost of the repairs to your car. You must be able to prove that you have lost value on your vehicle and you can then be entitled to receive the difference between the fair market value of your vehicle before and after the accident.
The fair market value is the highest price a reasonable buyer would be willing to pay – this is without sales pressure and when the buyer is informed about the condition of the car. For example, let us say that your car was worth $11,000 before you were in the accident and that it would cost $1,200 to repair your car. Now assume that after the repair, your vehicle would have a fair market value of $8,000.
In that case, you would be entitled to recover $4,200. This is $3,000 in diminished value as well as $1,200 in repairs. Of course, this is just one example – the specific amount you will be owed will vary based on your unique situation.
If you believe you have a case and you need to speak to an attorney then we recommend you contact The Law Offices of Larry H. Parker at 800-333-0000 to request a free legal consultation.