Diminishing Car Values After Accidents And What To Do

Almost every car owner will sell their used vehicle at some point in time and every seller will strive to get the highest price for their offering. However, many do not know that their car values after accident have depreciated by hundreds, even thousands of dollars. 

Car accidents are actually recorded, which potential buyers can check and use to negotiate a lower price for your used car, even if you have had it fixed and made whole again. Learn how much does a car depreciate after an accident and what to do regarding your car insurance so that you can recoup this loss in book value. 

Why do car values after accident decrease?

Each registered vehicle has its own CARFAX Vehicle History Report, a record which includes any accident involving the vehicle. Potential buyers of a used car can easily check this record online.

Naturally, a car after an accident will have some degree of damage. Even if you have it fixed and restored to its original state, a vehicle once damaged in an accident will inevitably be worth less than a similar vehicle that has been intact. 

Therefore, potential buyers will use this evidence to try to get a bargain. A dealer may try to get a price reduction of hundreds or even thousands of dollars. Your car values after accident depreciates depends on how serious it was damaged in the accident.

car accident repair
Even after repair, a damaged vehicle cannot be worth as much as an intact vehicle.


How much do car values after accident depreciate?

It makes sense that a car’s value will depreciate over time even without any accident. If a vehicle is involved in an accident, the depreciation in value will be larger. Then how much does the value of a normal vehicle depreciate over time?

Normal depreciation rate

The moment you buy a new car and start driving it down the streets, its value is reduced as it is no longer a “new” vehicle and cannot be sold at the price of a brand new car. Once it is classified as a “used” car, its value depreciates by up to 20 percent. 

Within the first year, the car’s value will depreciate by about another 20 percent. In general, the rate of depreciation slows down as the car ages. Within the first three years, you can expect a loss of between 40 to 50 percent, depending on the state of the car. Frequent and proper maintenance surely means smaller reduction in value. 

In the 4th and 5th years, the car will lose a total of another 10 to 15 percent as depreciation rate slows. After 5 years of service, an average used vehicle will only be worth 35 to 50 percent of its purchase price. 

Post-accident depreciation

Car values after accident vary depending on the state of the car after repairs. Damaged cars with full repairs will be worth more than cars that are so seriously damaged they cannot be restored to a well-functioning state. 

In general, car values after accident will depreciate at a rate faster than normal by 10 to 25 percent. 


If your car is too seriously damaged after the accident, you might not be able to sell it as a drive-able vehicle but have to sell it as a “junk car” for as little as $1,000 or lower. Buyers of a junk car will typically purchase such cars to take out and sell off separate components that still function. 

Such a loss in value is significant. You might wonder, is there anything you can do to make up for such sizeable depreciation? Fortunately, there is, if the other party in the accident is at wrong, not you. 

How to recoup the diminish in your car’s value

In case you are not the party at fault in the accident, you might be able to recoup some money. State laws, for example in the United States, allow you to claim a refund from the other party’s insurance company. 


If the other party was uninsured, you may still be able to apply for some benefits through your own insurer, given that you have sufficient property damage coverage.

The first step is to get a professional appraisal for your damaged car.

car accident appraisal
You must get an appraisal for your car to know its worth after the damage. (Photo Source: bodyandpaintcenter)

The book value of your vehicle may originally have been $20,000 before the accident, but may only be appraised for $17,000 after all the repairs have been performed.

Now you have a loss in value of $5,000 that you want to recoup. Next, you need to contact the other party’s insurance company and file a Diminished Value Claim to request compensation for your car’s depreciation.

car values after accident
You can claim compensation from the at-fault party’s insurer. (Photo Source: claimpix)

It’s safe to expect that you’ll need to be persistent and present all the information you have to prove your claim, including the appraisal document and an estimation of how much your car would be worth had it not been affected by the accident. You can get a rough estimate from an online car value calculator. 

An accident is undesirable, however there is always some probability. To protect yourself, get familiarized with state laws and car insurance options to get yourself covered. Start now with the basics of Top four types of car insurance coverage – What are they?