This is a term uses to refer to the reduction of the value of something as a result of damage. After you buy a property like a vehicle, something can happen to it that causes it to spoil. This reduction in its value is the one referred to as diminished value. When something like a vehicle involves in an accident, it will not perform the same way it used to perform. For instance, it will not look nice as new as it was or its engine will reduce its performance. This reduced performance of the vehicle is what is referred to as diminished value. There are different categories of diminished values.
First, when your vehicle gets damaged, and the only option you have is to repair it, it will have reduced in value in some way. This category of diminished value is referred to as, repair-related diminished value. It will have reduced in value because initially the vehicle was working well and had no form of breakdown. Now after the accident and the repair it has reduced its value. When you want to sell such a car at the market, the buyer can look for any evidence of previous repairs and then he can establish that its price is relatively lower than what you had anticipated. This is because the confidence that the car will perform for a long period is reduced, click here!
Secondly, there is the immediate diminished value which refers to the amount of money with which the price of your vehicle has dropped just after the accident has occurred and with no repairs done yet. This is the amount that can be established by estimating the repair costs of the car and then subtracting them from the original price before the accident happened. It is not commonly used because many people prefer to purchase an automobile after it has already been repaired. However, it is possible to buy one and then repair it yourself with a slight chance that you might spend less than the estimated amount. Look for more information about diminished value, visit http://www.dictionary.com/browse/diminish.
Lastly, there is the inherent diminished value which expresses the exact amount of money that can be found by subtracting the current price of the car after the repairs have been made from the original price it would have attracted before the accident. This amount takes into consideration that the car has been repaired to an optimal state and the only reason for a diminished value is the fact that it now has a damage and repair history. Click this link!