There are millions of cars driven all over the world. Some are used in the city while others in rural areas. There are also cars which are used in remote places such as the desert or jungle. With so many cars using the road every day, traffic accidents are bound to occur. Some are due to negligence while others due to vehicular failure. With the risk of auto accidents, these car owners would make sure to get the appropriate car insurance. This will help recover the damages on their cars as well as cover any responsibilities such as hospitalization bills due to the auto accident. With car insurance on hand, the car owner is guaranteed to have the car back to top condition in no time. However, the value of their car will never be the same again. Cars have diminished value whenever these cars got involved in a traffic accident resulting to physical damages on the car both interior and exterior. When it comes to diminished value, there are 3 basic types that a car can be classified into. Here is some brief explanation in each type of diminished value.
- Immediate – Immediate diminished value focuses on the resale value of the car. Once the car is involved in a traffic accident, its resale value will drop significantly compared to when the car was not yet involved in a car accident. The difference between the resale value of the car just before the accident and right after the accident is the immediate diminished value. For more details about diminished value, check out https://en.wikipedia.org/wiki/Diminution_in_value.
- Inherent – Inherent diminished value is the market value of the car once it was restored using the best repair quality after the car accident. This diminished value is the most commonly used especially on insurance claims.
- Repair related – Repair related Hansen Price diminished value refers to the decrease of the market value of the car due to repairs. The repair provided for the car is not the optimum quality thus the quality of the car is not the best as it should after the accident. There are also cases where some parts are not repaired or left inside the vehicle.
These types of diminished value are useful on insurance claims. It is also important to know that car buyers would require the diminished value as well as the traffic accident history of the car for resale. It is better to know more about the consequences of diminished value if you own a car especially an expensive unit with a premium insurance rate.