Diminished value occurs in Arizona when a vehicle is involved in an accident and, as a result, incurs physical damage, whether it is structural or cosmetic. Even if the vehicle is repaired, it is still worth less money than it was worth before the auto accident occurred. When selling or trading a vehicle, Arizona requires disclosure of all damage caused by prior accidents that the vehicle has been involved in. Thus, most customers would favor a vehicle with a clean record over a vehicle that has been involved in a prior accident. This means that individuals end up receiving less money for their vehicle than if their vehicle were not involved in an accident in the first place.

Three main types of diminished value in Arizona exist when assessing the amount of a vehicle’s diminished value. However, not all three types of diminished value are used when legally compensating individuals for the diminished value of their vehicles in Arizona.

  1. The first type, inherent diminished value, is the loss of market value due to the fact that a vehicle has been involved in an accident. Inherent diminished value is the most widely recognized and accepted form of diminished value, and is also the most common basis upon which any supplemental forms of diminished value would be added.
  2. The second type, repair related diminished value, is the depreciated amount of a vehicle as a result of improper or incomplete repairs, poor quality repairs or unrepaired items. Generally, the amount of repair related diminished value is determined by the overall quality of the repairs. Repair related diminished value is a supplemental form of diminished value that may be added onto a vehicle’s inherent diminished value.
  3. The third type, insurer related diminished value, occurs when an insurance company insists or authorizes the use of aftermarket parts or parts not manufactured by the original manufacturer.


Arizona law does allow individuals to collect diminished value when their vehicles have been in an accident. However, diminished value claims must be proven.  Those vehicles which are relatively new, have sustained significant damage, and were not previously damaged in a prior accident have the greatest chance of success.  Other factors do impact a vehicle’s diminished value, including its mileage, marketplace demand, value of the vehicle undamaged, and the vehicle’s condition before the accident. Because every vehicle is different, the amount of diminished value varies accordingly, and therefore cannot be systematically calculated.  Thus, a diminished value expert who has full understanding of the marketplace is needed in order to accurately calculate a vehicle’s diminished value following an accident.


Typically, most individuals ask their insurance adjusters to address the issue of diminished value. While most insurance companies try to convince individuals that diminished value is not legitimate, individuals are allowed to make a formal demand to the insurance company for the claim. However, if the diminished value claim is unsubstantiated, the insurance company can easily dismiss it. While a diminished value report can cost as much as $400, many experts will prepare a report for less money.


Instead of dealing with insurance adjusters directly, individuals should consider hiring a diminished value attorney if the benefits of the claim outweigh the cost of litigation. Given that many insurance companies often refuse to pay a fair amount for diminished value, an attorney who is experienced in diminished value claims will be able to utilize expert appraisers in order to accurately calculate the amount of diminished value. Diminished value attorneys are also able to gather strong evidence so that individuals will be able to receive full compensation for the diminished value of their vehicle.

Individuals should choose their lawyer based on experience with Arizona law and reputation, and should ask to see proof of prior successful litigations in the area of Arizona diminished value.

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