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by
Robert Hollenshead
May 23 2011 10:42AM
Diminished Value is the amount a vehicle’s resale value decreases when it is involved in any material change from its original factory condition. When a vehicle has had any paint work it categorically has a diminutive amount related to the severity and quality of repair. This can only be realized when a vehicle is appraised in the process of being traded or re-sold. When the buyer has the skill set that allows him to identify the severity of the incident that triggered the repair and the quality of repair, the Actual Cash Value can be determined. It can only be validated when a willing buyer offers a price a to transact on and the owner accepts.
To determine diminished value the amount of paint work must be determined. The industry standard in a paint-meter. Elcometer is the most used and recognized as the top of the market. A car with more than one panel painted is without exception subject to diminished value. Replaced body panels anywhere on a car has a drastic effect on the value. In most cases a car with more than two painted panels is excluded from Manufacturer Certified Warranty Programs. This has a drastic effect on the re-salability in the wholesale market and therefore the value of the car. Additionally, although frequently unjustifiably, a hit on a Vehicle History Report has a drastic effect on value in the wholesale market, even if it was not involved in an accident. Irrational and absurd but painfully true.
This is diminished value.
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