When it comes to cars, quite often there can be confusion about what the difference is between diminution and depreciation.
Depreciation is a term most of us are familiar with. However, we can sometimes think that Diminution means the same thing.
Diminution VS Depreciation
Depreciation is the natural loss in value that something has over time. In the instance of a motor vehicle, factors that can influence the level of depreciation is sustains could be how well the car has been looked after, general wear and tear, the mileage and the service history. All of these factors can negatively impact the value of a vehicle.
Diminution occurs on a motor vehicle when it has been involved in a car accident and it has sustained some damage. Even if the vehicle has been repaired to a good standard, the value of the car will have dropped because of the repair history it now has.
The way to think about this is to consider what you would do if you had been to look at two potential vehicles that you wished to buy. Imagine if both vehicles were identical, the same make, model and mileage.
You learned that one of those vehicles had been involved in a previous car accident. Which vehicle would you buy? Of course, you would purchase the car without the repair history.
This means that the vehicle with the repair history is less desirable and will have lost value because of the market prejudice it will suffer.
Vehicle Diminution is that specific loss in vehicle value. It will require a specialist engineer to assess the value of that loss in order that a claim can be made against the insurers of the responsible driver.
Further reading
Vehicle Diminution – Oakwood Solicitors
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Rob Crompton joined Oakwood Solicitors in July 2007 as a Road Traffic Accident Paralegal Fee Earner. Rob has progressed through the organisation and holds the current position of Head of Personal Inj…
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