The third and last part of the article on diminished value will discuss factors that are used in establishing a motor vehicle’s diminished value. Please see parts one and two of this article that discuss the types of diminished value and claim recovery in Pennsylvania for diminished value.

Diminished value claims may be significant for newer motor vehicles with no prior history of accidents. Older cars tend to diminish less in value after an accident. How is diminished value determined in Pennsylvania? How does a car accident affect the value of the car for future re-sale? Here are some factors used in establishing diminished value:

*Damage sustained in the present accident

Structural damage, like damage to the vehicle’s frame, is the greatest cause of loss in value of a motor vehicle.

*Vehicle’s history of prior accidents

An auto insurance company will use any prior accidents to argue that the loss in value is not due to the present loss but prior losses.

*Vehicle’s year, make and model

The newer the vehicle, or the higher demand for the vehicle, the more likely it has diminished in value.

*Pre-accident condition and mileage of the vehicle

The lower the mileage of a vehicle pre-accident, the greater the loss in value. In turn, the higher the mileage, the less loss in value.

*Pre-accident vehicle value

The selling price establishes the “fair market value” of a vehicle rather than the price other sellers are asking for the same make and model.

*Vehicle repaired to industry standards?

A motor vehicle must be properly repaired before diminished value may be established. Industry standard repairs will provide better proof of diminished value. The use of “original equipment manufactured” (OEM) parts and the latest technology will also carry significant weight in establishing diminished value. However, there is still a residual loss in value even if the vehicle is repaired to industry standard.

*Failure to sell vehicle after the accident

While drivers have no obligation to sell or trade the damaged vehicle, they often react like a normal consumer car buyer to a damaged motor vehicle and prefer to not have anything to do with it. Also, while diminished value claims are sometimes considered purely speculative, drivers may establish diminished value of a motor vehicle by utilizing expert testimony without selling or trading the vehicle. An offer made by a salesperson may provide proof of “actual diminished value.”