car after an accident

More Than a Fender Bender: What Happens to Your Car Value After an Accident?

Did you know that road crashes cost the United States $230.6 billion per year?

No wonder that with so many accidents people are in need of car repairs and insurance claims.

Did you get into a car accident recently? Your car’s value might have suffered.

Keep reading on to learn about what happens to your car value after an accident.

Your Car Value After an Accident

After an accident, you might have to deal with insurance claims to have your car fixed. It can cost thousands of dollars to the insurance company to fix your car and have the repair shop make it look brand new. What they don’t tell you about or cover is the diminished car value after an accident.

Diminished value is when the car is not worth as much as it was before the accident happened. Even when repairs are done and you can’t tell that the car has been in an accident the simple fact that it had a repair due to an accident brings down the value.

To potential buyers or when trading the car in at a dealership in their eyes, the car value is lower because of the fact that the car has been involved in an accident.

Even if you have no signs of damage or of an accident you can’t expect the same resale value as before it was in an accident. When a future buyer pulls up a Carfax report on the vehicle they will discover the accident without you even telling them. 

Types of Diminished Value

There are three different types of diminished value.

1. Repair Related

This is the lost value if there are any quality repair issues that occur. For example, if the repair shop can’t get an exact part to match, or the exact color match.

This type of diminished value can be of most value loss because you’re losing the value of the car plus on top of it, the value from the repair being noticeable even without a car history report.

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2. Immediate 

This is the difference in the resale value of the car after the repairs have been done. This is the value difference from before the accident to after the accident.

3. Inherent

This is when the vehicle has been repaired back to its original condition after the accident through the insurance. This type of diminished value is reported and when you try to sell the car the value is not as high as before it was in an accident.


There are quite a few consequences that come with being in a car accident. The first obvious one is finances. You will have to come up with money to cover a deductible, a car rental, and higher insurance premiums for years to come. Next is what we spoke about above diminished car value. 

Last but not least is dealing with a potential buyer or dealership when you’re selling it or trading it in. The potential buyer and dealer might ask for a huge discount due to the fact that your car was in an accident. Read more here about selling your car.

They might also decide to not buy your car because of the fact that it was in an accident. That would be the worst feeling if you’re ready to sell and they back out because of an accident in the past. 

State Insurance Laws

It comes in handy to learn what your state insurance laws are. In most states, you’re able to file a claim against the other party’s insurance company if they were found at fault. 

Before grabbing the phone and calling the insurance company to file a claim have your car professionally appraised. You want to find out how much your car was worth before the accident and how much it will be once the repairs are done.

This difference is the total diminished value you’re looking at losing. What some people don’t know is that they can file a diminished value claim with the insurance company from the person that was at fault. Most insurance companies don’t want to pay extra money so this is where the professional appraisal will come in handy.

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They might ask for proof to back up the numbers you’re claiming as the value loss from the accident.

Having a Diminished Value Claim Approved

If they don’t respond in your favor you might have to keep calling and be persistent because after all, you’re going to pay more for years to come for being involved in an accident and on top of it if you choose to sell your car you can count on it being worth less than it was before the accident.

Don’t be surprised that once they agree to pay this extra money you’re requesting that they pay less than the number you gave them. They might have their own formula they use to determine the diminished value that’s lower than the number you have. You can try to negotiate for them to give you more if you feel what they’re offering is not fair or too low.

If the insurance company refuses to pay anything for the car value loss you have the option of hiring a lawyer and taking them to small claims court. If your car is expensive or new this might be the route you want to take. The legal fees if you choose to do this will all be up to you.

Drive Safe

While you’re out on the road, drive safe and look out for other drivers. Most of the time it’s everyone else we have to be aware of because they’re not paying attention. Now that you know what happens to your car value after an accident you might want to be even more careful to avoid filing any insurance claims.

Check out more interesting facts about vehicles or anything else in our interesting facts section on our blog.