The Solution for the Diminished Value “DV” Question
Determining if there is a diminished value and if so, how much continues to be a gray area.
DCI’s Valu-Rite System® provides you with a clear black & white answer.
What is diminution in value?
It is the decrease in market value as it relates to a vehicle that has experienced a collision. There are basically three classifications or types of Diminished Value- 1) Immediate, 2) Repair-Related, and 3) Inherent, defined as:
- Immediate- Decrease in value immediately following a collision. Although it cannot be calculated immediately, once there is an impact, there is a decrease in value.
- Repair-Related- Decrease in value occurs when a vehicle isn’t repaired/returned to its pre-collision condition.
- Inherent- After a collision, a vehicle has a damage history. This could cause a decrease in market value. It is assumed that the vehicle was properly repaired to pre-loss condition.
Inherent is the most common and widely-used form of Diminished Value as related to insurance claims.
How is the diminution in value determined?
Unfortunately, how the Inherent diminution in value is determined is not an exact science. This is the “gray area”. There are no tables or books. But there are many opinions and “methods” in the marketplace.
Some of these “methods” use a comparison of Trade-In Value versus Retail Value from various industry guides. This is basically comparing a Wholesale price to a Retail price which is like comparing an Apple to an Orange.
Others will reference the “17C Rule” as a method to calculate diminished value. The state of Georgia has stated that this is not an approved method (see more on the 17C Rule below).
Likewise, there are those who say you can’t use a “formula”. Well, if you add or subtract two numbers together, that is in fact a “formula”.
What is DCI Solution's methodology?
First, we determine the “Pre-Loss” Value of the vehicle by utilizing industry recognized resources and standards to determine the market value of a like vehicle. Factors include but are not limited to year, make, model, trim, mileage, options, and geographic area.
Next, we carefully review the InstaVin® Vehicle History Report for any adverse title history, previous accident reports, possible mileage discrepancies, and junk, salvage, or total loss incidents reported.
Finally, we determine the “Post-Loss” Value of the vehicle by carefully scrutinizing all repair estimates/invoices, photographs, and any related supplements to determine which damage adversely effects the value of the vehicle and which does not.
Replacing the windshield or tires does not decrease the value while structural damage does.
The difference between “Post-Loss” and “Pre-Loss” Values being the “Diminished” Value.
Why is DCI Solution's Diminished Value Report the best?
DCI Solution’s methodology is based on solid principles and a consistent process.
Our report clearly and concisely spells out the calculation and the reasoning behind it, i.e. what damage effected value and what did not. It also includes applied State case law.
Additionally, we include the entire InstaVin® Vehicle History Report and an NADA® Market Value Report.
Finally, you will receive piece of mind knowing that DCI Solution stands behind each and every valuation report.