‘Diminishing’ returns

How is diminution in value because a car has been accident repaired affect the future value of a car? And what happens if it is claimed for on insurance?

Asked on 6 February 2010 by D.M., via e-mail

Answered by Honest John
Three scenarios, all where for example, 'market value' of the pre-damaged car is £4,000 and the insurer can get £1,000 for it from a salvage company. (A) The repairs would cost £3,250. So the car gets written off and sold for salvage. (B) The repairs would cost £2,500. So the car gets repaired by the insurer's bodyshop. (C) The repairs would cost £2,500 But the owner successfully claims 'diminution of value' of £1,000. So the car gets written off and sold for salvage.
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