Diminished Value Claims in Arizona: What Tempe Drivers Should Know
Even after a proper repair, an accident on a car's record can make it worth less when you sell or trade it in. That is called diminished value.
This post covers what it is, when you can claim it in Arizona, and how to back up a claim.
What is diminished value on a car?
Diminished value is the difference between what your car was worth right before the accident and what it is worth after it has been repaired. Many buyers will pay less for a car with an accident history, even when the repair is done well.
There are two kinds:
Inherent diminished value. The loss in value that remains after a proper, complete repair, simply because the car has been in an accident.
Repair-related diminished value. Extra loss in value caused by poor repairs, such as mismatched paint, uneven panel gaps, or the wrong parts. The usual fix is getting the repair corrected.
Can you claim diminished value in Arizona?
Generally, yes, when another driver caused the accident. Arizona courts have held that the owner of a car damaged by someone else's negligence can recover the cost of repair plus any proven loss in market value, along with loss of use.
In Oliver v. Henry (2011), the Arizona Court of Appeals also said you do not have to sell or trade in the car to prove the loss. An expert appraisal of its value before and after can be enough.
This is a third-party claim against the at-fault driver, usually through their liability insurer. Our guide on how to handle insurance after a car accident in Arizona covers how third-party claims work.
Can I claim diminished value from my own insurance?
Usually not. In a 1988 case, the Arizona Court of Appeals held that under the collision policy in that case, the insurer only owed the cost of repair minus the deductible, not the car's loss in value.
Policies differ, so read your own. But if you are going through your own collision coverage, diminished value is generally not part of the claim.
How do you support a diminished value claim?
The insurer will want evidence that your car lost value and how much.
An independent appraisal. A written comparison of your car's value before the accident and after the repair, the kind of evidence the court accepted in Oliver v. Henry.
Vehicle history report. If the accident appears on a vehicle history report, that record is part of why buyers may pay less. Keep a copy.
Repair documentation. The final repair order, photos of the damage, and the list of parts used show the extent of the damage and how it was fixed. We can provide copies of your repair paperwork on request.
Proof of a quality repair. When the repair followed the vehicle maker's procedures, it is harder to argue the loss came from a bad repair rather than the accident.
What is the time limit for a diminished value claim in Arizona?
Arizona's statute of limitations for lawsuits over injury to property is two years from when the claim accrues, under A.R.S. 12-542. For a car accident, that clock usually starts on the date of the accident.
That is the deadline to file a lawsuit. Insurers may expect you to report a claim much sooner, so raise diminished value early, once repairs are done and you have your paperwork.
What is the 17c formula insurers use?
The 17c formula is a calculation some insurers use to estimate diminished value. It came out of Georgia class action litigation, and its name refers to paragraph 17(c) of a court order in that case.
In general terms, it starts with a capped percentage of the car's pre-accident value, commonly described as 10 percent, then multiplies that by a damage factor and a mileage factor, each between zero and one. The result can only go down from the cap.
Common criticisms of the formula include:
It is not Arizona law. Arizona courts look at actual, proven loss in market value.
The cap is arbitrary. It does not reflect what local buyers actually pay for your specific car.
It can zero out real losses. Higher-mileage cars or non-structural damage can come out at little or nothing.
If an offer is based on a formula, you can ask how it was calculated and respond with an appraisal.
How does a quality repair help protect resale value?
A quality repair cannot erase an accident from a car's history, but a poor repair can make the loss worse. A car that looks and drives like it did before is easier to sell.
Our I-CAR certified technicians follow OEM repair procedures, and we use computerized paint matching so repaired panels blend with the rest of the car. Parts choice matters too. Our post on OEM vs. aftermarket parts explains the differences.
Our paint and workmanship are backed by a limited lifetime written warranty. If the damage is severe, our post on how to tell if your car is a total loss may also help.
FAQ
Do I have to sell my car to claim diminished value in Arizona?
No. The Arizona Court of Appeals has said the loss can be proved without a sale, for example with an expert appraisal.
Can I claim diminished value if the accident was my fault?
Generally not. Claims under your own collision coverage are usually limited to the cost of repair, but check your policy.
Can I choose where my car gets repaired?
Yes. In Arizona, you can choose your own body shop, even when insurance is paying.
Who can I ask about my specific situation?
This post is general information, not legal advice. An attorney can advise you on your claim. For questions about how an insurer is handling it, contact the Arizona Department of Insurance and Financial Institutions.
Get a repair that holds its value
A careful repair is the first step toward protecting your car's value. We are a family-owned shop in Tempe since 1975, now in our fourth generation, serving Tempe, Mesa, Chandler, Gilbert, Scottsdale, and the East Valley. We work with all major insurers and can set up a rental through our partners.
Harvil Auto Body
2338 E Broadway Rd
Tempe, AZ 85282
(480) 966-7180
Monday through Thursday, 7:30 AM to 5:30 PM. Closed Friday through Sunday.
Walk-ins are welcome, or contact us to request a virtual estimate online.