1. What is diminished value”?
Diminished value (DV) is the amount of value a vehicle loses after being involved in an accident. For example, a vehicle which was damaged will be worth less than a vehicle that was never damaged. That reduction in value is referred to as DV.
2. Does my car have Diminished Value?
If your vehicle was involved in an accident, it has suffered DV. With rare exception, every vehicle that has suffered damage has also lost value due the fact that it has been damaged.
3. Some websites say that your vehicle must be worth more than $10,000 to have Diminished Value, is that true?
No. The amount of money a vehicle will lose as a result of an accident will vary with the vehicle’s value, however, every vehicle will have DV if it is damaged – even a vehicle that costs less than $10,000. The only time a vehicle will not lose money as a result of an accident is when the vehicle is not worth anything prior to the accident.
4. Some websites say that your vehicle must be no less than 5 years old to have diminished value, is that true?
No. Used cars generally retain their value up to 10 years – sometimes longer depending on whether the vehicle is a classic or luxury vehicle. Limiting a vehicle’s value to 5 years is improper. Each vehicle stands on its own.
5. What factors affect Diminished Value?
The main factors affecting DV are: the market value of the vehicle prior to damage, the year, make, and model of the vehicle, mileage, prior damage, marketability of title, and the specifics as to the damage including the amount of damage, its location, and type of repairs performed.
6. After an accident, should I submit a claim for Diminished Value?
Yes. You should absolutely submit a claim for DV.
7. Do most States allow for the recovery of Diminished Value?
Yes. Virtually ALL states allow for the recovery of diminished value where your vehicle is hit by either another party (a third party claim) or by an uninsured motorist.
8. What happens if I caused the accident?
If you caused the accident, you would submit a claim to your own insurance carrier. In general, all states allow the recovery of DV even if you caused the accident; subject to the limitations of the policy language. Some States even allow for the recovery of DV, despite the language in your policy. Those States are: Arkansas, Colorado, Georgia, Kansas, Kentucky, Minnesota, Mississippi, Montana, Oklahoma, and Oregon. freediminishedvaluecalaulator.com only provides reports for 3rd party claims.
9. How do I get the most for my Diminished Value?
Using one of our diminished value report packages, you will have an industry leading product using over 40 different criteria to establish your DV claim.
10. Can I write off my diminished value on my income tax return?
If you itemize your deductions, use Line # 19 of Form 1040 – Schedule “A” to deduct your un-recovered DV. Assuming you have an un-recovered DV of $2,000 and a tax rate of 20%, you can Reduce Your Tax Obligation by almost $ 400.00. You can even deduct the cost of the DV Report on Line # 22 of Schedule “A”. You should review this with your tax advisor.
