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How do I recover the cost of my vehicle (loss of value) after repairs after a car accident??

Los Angeles, CA |

I was rear-ended at a red light in my 1-year old car. I was at a legal stop at a red-light so I'm certain the other driver's insurance company can't deny liability. The damage estimate has come out to about $13,000 so they're not totaling the car out but, instead, only paying for repairs. Since I'm still financing the car, I'm wondering how I can recover the cost of the diminished value of the vehicle - there's no way this car is worth what is still owed on it and even after I pay off the note it'll be more difficult to sell this car because the Carfax will show that it has been in a collision. Please advise.

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Best Answer

I disagree with all of the previous answers.
California common law does not recognize diminished value as an element of property damage loss for the typical automobile (as opposed to a historical or unique vehicle).
Rather, the defendant is responsible for the lesser of the cost of a first rate repair or total loss. You may also be entitled to loss of use payment for the time the vehicle was not drivable and being repaired.
My best advice is to insist that your car is repaired perfectly and in a first class manner.
Good luck!



So is "GAP Insurance" what covers that loss in value or am I just SOL in this situation? It just doesn't seem fair to me that I (doing no wrong) have to continue paying my note on a car that is now worth less because of a collision caused by someone else? I can't wrap my head around that.

Barry P. Goldberg

Barry P. Goldberg


Hi. I sympathize with your plight. It is one of the most common complaints I get about car accidents after handling cases for 28 years. GAP insurance pays for "GAP" the lienholder/finance company has if the amount you are able to recover is less than the amount financed. It is not uncommon for my clients to sell their vehicle immediately after it is repaired/re-painted because it looks the best at that point in time. You still may incur some dimunition loss. It is also certainly a good reason to vigorously pursue bodily injury claims to the reasonable extent permitted by law---just to come close to putting you back in the position you were in immediately before the accident. Most people do not realize what a pain and hassle it is dealing with an accident property damage loss. After all that hassle---you still can end up with a repaired vehicle which is not worth as much as it was before the accident. I mean this sincerely---best of luck on this---you need to find a way to move forward that you can live with on this.


Although you are legally entitled to diminished value in addition to cost of repair, insurance carriers are very reluctant to pay these damages and it will usually require filing suit to get this recovery. If you were injured, a personal injury attorney would be willing to take this claim on in addition to recovering your damages related to the injury(ies).

Nothing in this communication should be construed as creating an attorney client relationship. This is for informational purposes only. Attorney will take no action on your behalf unless and until a written retainer agreement is signed. There are strict time deadlines on filing claims and, as such, you are advised to consult with and retain an attorney immediately to file such claims timely or you will lose any right to recovery.


You can hire a lawyer. You will need to obtain evidence of the diminished value and present the claim to the at fault insurance carrier - your policy will not cover such a claim. After the repair have the car inspected, obtain a declaration from an appropriate professional in the car sales business regarding the diminished value. Please note- Carriers do not like to pay these claims.


You should consult with a personal injury attorney in your area to determine the best path forward. The reduced value is called “diminished value” or "diminution in value." Yout can typically recover this value against a 3rd party in California. Best of luck.

I am licensed in California, therefore, my answers are based on general prinicpals of law or California law, which may not be applicable in your jurisdiction. Answers posted to Avvo are for general information only. Do not conclusively rely on any information posted online when deciding what to do about your case. Every case depends is fact dependent, and responses are limited to and is based on the information you posted. No attorney-client relationship shall be created through the use reading of this response on Avvo. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information in this response.


If you want diminution in value, you'd better retain a lawyer.

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Did you buy GAP insurance?
GAP Insurance is also known as Guaranteed Auto Protection or Guaranteed Asset Protection and as GAP within the North American financial industry. GAP insurance covers the difference between the actual cash value of a vehicle and the balance still owed on the financing (car loan, lease, etc.). GAP coverage is mainly used on new and used small vehicles (cars and trucks) and heavy trucks. Some financing companies require it.

GAP insurance covers the amount on a loan that is the difference between the asset value and the amount covered by another insurance policy. Some GAP policies also cover the deductible. This coverage is marketed for low down payment loans, high interest rate loans and loans with 60 month or longer terms. GAP insurance is typically offered by a finance company at time of purchase. Most auto insurance companies offer this coverage to consumers.

There are two ways of getting GAP coverage. The first type is an insurance policy sold by a broker. The second type is a waiver agreement sold by a Finance & Insurance Manager. The first is regulated by the insurance industry, the second is unregulated. In either case coverage is usually the same and sold as a soft product through the car dealership. Coverage is usually financed along with the lease/loan. Claims are subject to a total loss. The total loss is usually determined by the primary insurance company’s third-party appraiser.[citation needed]

Exclusions to GAP insurance vary by country or state. Some exclusions include a maximum loss limit of $50,000 while others require a loan term of less than 84 months. GAP is an optional purchase; however, many states in the US require that a car dealership offer GAP at the point of purchase. States such as Louisiana require that the purchaser sign a disclosure document as proof. Although GAP is optional, some finance companies require GAP as a condition to obtaining a loan.

The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Howard Roitman, Esq. and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.


There are two issues. One issue is that even without the collision a car depreciates so much when it ceases to be new and becomes a used car that it commonly happens that a person can owe more on a one year car than it is worth. Mr. Roitman's discussion of GAP coverage is very interesting in that regard.

A second issue is how the car is repaired. I always advise my clients to insist that their car be repaired at a dealership of their brand. The dealer will use only original equipment parts. Independent body shops may use after market parts. Down the road that might make a difference in warranty coverage or "secret" warranty coverage and even in re-sale value.

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