This refers to the permanent loss of market value a vehicle suffers after being damaged and repaired. Even if a collision center restores the car to factory specifications, a crash on its history report makes it worth significantly less to future buyers. In the auto insurance and appraisal industry, this drop is formally calculated to compensate owners for the equity wiped out by an accident.
Heard on the job
The repair bill was five grand, but we need to file a claim for the accelerated depreciation because nobody wants to buy a wrecked truck.
Insider tip
Insurers rarely offer this payout voluntarily; owners usually have to hire an independent appraiser to prove the exact amount of market value lost.
Also heard as
- diminished value
- inherent diminished value