It’s common knowledge that cars depreciate in value over time, and if you buy a brand new vehicle, the simple act of driving it away from the dealership decreases its resale value. What you may not know is that in the event your vehicle is involved in an accident, the resale value of your car is permanently decreased, even if you make all the repairs to restore it.

Basically, when an accident occurs, your car suffers what’s called Diminished Value. Diminished value is that portion of a damaged vehicle’s pre-Loss Value that has not been restored through the repair process. For the sake of courts and insurance companies, diminished value comes in three varieties:

1. Immediate diminished value: This is the difference in value of your car as it was before the damage happened and immediately after, before any repair work has been done. When you have to go to court to seek reimbursement, this is the number typically used.
2. Inherent diminished value: This is the difference in value before and after an accident, assuming that the best possible repair work has been done to the damage of your vehicle. This is the most widely used number when you’re talking trade-in value. It’s “inherent” because even if your car’s been fully restored, it has a significant damage history now.
3. Repair related diminished value: This is often tacked on to the inherent diminished value when the repair work was less than optimal. It could be minor cosmetic damage or major structural problems that were not or could not be fixed.

Even if there’s no remaining visible signs of damage to your vehicle, dealerships will know about it, and thanks to services like Carfax, most private buyers know how to look up a vehicle history, too. If you filed an insurance claim for the repairs, it will show up on your car report, and you are pretty much guaranteed that dealers will lower the amount they offer you as a result. If your vehicle sustains damage in an accident, it may be possible to receive compensation for the diminished value of your vehicle. An experienced attorney can help determine the amount of your losses and help you recover them.