and working to make sure you are properly compensated for your loss
Company Info

Diminished Value Method, LLC
P.O. BOX 1931
Pearl River, LA 70452

Phone: (844) DIMVALU
OR (888) 996-1970
Fax: (888) 460-0439

Phone Number


Diminished Value from the Dealerships Point of View

Often times when speaking with a client, they tell us that a specific dealership will not provide them with diminished value figures. We’ve been doing diminished value appraisals for over six years and have developed a large database of used car managers that will work with us. We’ve met with every used car manager in the area and our techniques often manage to get dealers that wouldn’t normally cooperate to do so. The reason is that sales managers know that we get assessments from multiple dealerships and average the amounts. Since we do it this way, there is less liability for an individual dealership and they transfer the risk to the appraisal company. Used car managers want to focus their time on selling as many vehicles as possible and not spending time in court testifying.

If our appraisal is based on assessments from 3 to 5 dealerships, then the insurance defense attorney will subpoena us as opposed to the multiple used car managers that we acquired our data from. Additionally, since our appraisals focus on inherent diminished value which is how much the vehicle is perceived to decrease in value based on the vehicle history, it wastes less of the used car manager’s time going through a detailed appraisal of a vehicle that the customer has no intention of actually trading in.

Insurance adjusters often try to argue that dealers jack the depreciation assessment up higher than they would actually charge in the real world; however it is not in the dealers best interest to provide a higher than actual amount for diminished value because most know that the client may ask who will provide them the highest trade-in value for the vehicle.  Consequently, many dealers may actually state an amount that is slightly lower than they would charge in the actual market in hopes of getting the trade-in.

Some adjusters balk at the high amount of diminished value that results from severely damaged vehicles and try to argue that a dealer would not actually depreciate a trade-in as much as they state, but they have to understand that a dealer is in business to make a profit.  Any reputable dealership is not going to want to try to sell a vehicle with a severe damage history on their lot.  One reason is liability concerns.  The other is that the consumer they attempt to sell the vehicle to will want such a large discount that the dealer can’t make a profit, so most dealerships have to sell a vehicle with a very poor vehicle history to an auctioneer.  If they give the person trading the vehicle in too much on the trade, then they may experience a loss when they sell the vehicle to the auctioneer. This is why used car managers depreciate a vehicle with a severe damage history so much.

We’ve gained a lot of experience meeting with and learning from used car managers. Although a few are just too busy or uninterested in getting involved, most are very nice people and enjoy discussing the details of their activities. The vast majority are very happy to meet and speak with a diminished value appraiser because we assume a burden that they would prefer not to deal with.

Why Formulas Are a Poor Representation of Diminished Value

As a diminished value appraiser, I’ve worked for individuals, plaintiff attorneys and even some insurance companies. I was actually surprised that insurance companies would hire me because their objective is to pay as little as possible; however I am an independent impartial licensed insurance adjuster and have to be objective and unbiased.


I cannot influence numbers in the client’s favor. My methods are the most accurate at determining the amount your vehicle will diminish in value, but please don’t ask me to try to skew the numbers in your favor because I won’t do it. If that’s what you want, then you should hire someone else. Formulas don’t work because supply and demand determines diminished value in any local market. Various vehicle models are more desirable and have a higher demand which actually can make the diminished value for that vehicle less because dealers may want it more.


Within a particular vehicle model, subtle differences can affect the demand for that vehicle so the bottom line is that a formula such as the 17C formula used by many insurance companies is totally inaccurate because it cannot account for what’s going on in the local market. The only accurate way to determine diminished value is to gather information from local sales managers that are responsible for buying and selling that particular vehicle in the local market. Anyone who tells you otherwise is either uninformed or lying to you.

Accuracy Unfortunately Takes Time

Since our company’s inception we’ve been researching diminished value evaluation techniques and trying to improve on our methods. We regret that after six years of research we still have not managed to come up with a way to do appraisals quickly. Our research indicates that the most accurate way to determine diminished value in the local market is to average the assessments of local used car sales managers for the particular make of vehicle.


We’ve evaluated every possible alternative. We’ve studied various formulas and although some local sales managers use similar formulas, every dealership has a different way of determining diminished value. We purchased highly recommended software that was supposed to provide accurate numbers, but we found serious errors in the software upon thorough testing.


The majority of individuals that go to sell their vehicle do so with dealerships and the only way to know what is happening in the market is to meet with sales managers as they are the individuals actually purchasing and selling vehicles.


We’ve established a rapport with all local sales managers for each make of vehicle and created an extensive database of which dealers will cooperate and who will not.  If you were to try to get several used car manager’s assessments of diminished value then you will find that many refuse to cooperate out of fear of litigation. We have managed to minimize this concern by explaining that we take assessments from multiple dealerships and average the results.  We also do not provide the specific name of the individual in our reports, only if subpoenaed.


We had hoped that we could speed up the process by utilizing email; however this has been unsuccessful as many dealers are just too busy to read the messages while some are apprehensive that email records provide easily discoverable evidence.


We will continue attempts to speed up the appraisal process, however at this time it appears that accuracy takes time. Sales managers can be very busy people that are difficult to meet with. By bringing them doughnuts and learning how to work with their schedules we’ve become pretty good at keeping them happy and getting the necessary results. Regrettably, our process takes patience.  We cannot provide a report overnight and depending on the circumstances; it can sometimes take up to two weeks for us to get all of the data necessary to provide a report.

Why Attorneys Are Reluctant To Pursue Diminished Value

We’ve been doing research into why so few attorneys pursue diminished value. The largest response we get is that they just don’t see much money in it. We completely understand this, but unfortunately it plays into the stereotype that attorneys are only interested in the money, and not what’s best for their client. The interesting thing about diminished value is that it puts a substantial amount of money into the hands of the client in the early stage of a claim. Most attorneys are interested in the significant return on bodily injury claims, yet their client has to treat for several months before a return can be realized. By recovering money for the decrease in value a vehicle sustains in the beginning of a claim, they can put significant funds in their client’s pocket early on. One to a few thousand may not seem like much to an attorney, but it’s a lot to their client.  The bottom line is that for an individual who has a vehicle less than five years old with moderate or more damage, they are losing out by not pursuing a claim. When they attempt to trade in their vehicle they are going to find that it’s worth much less, so it’s best to recover the money now.  Our appraisal reports provide the  proof necessary to successfully pursue a diminished value claim.  Feel free to contact us for a copy of a sample report so you can see the quality of our appraisals.

How Do You File A Diminished Value Claim?

It’s best as early as possible in the claim to discuss the issue with your adjuster to get an idea of their attitude on the matter. Let them know at the onset that you intend to pursue a diminished value claim. If their attitude is fine and they ask you to present evidence of your claim then you might not have too much trouble from them. If they make an offer early on, then you might want to consider investigating an accurate amount for your vehicle’s diminished value because insurance adjusters are skilled at paying as little as possible. If their attitude is negative from the onset and they say something like you have to sell your car to experience diminished value, then you know you’re going to have problems from them.

After you have an amount for your diminished value, the first step in pursuing a claim is to make a formal demand by presenting your information to the insurance company and informing them that you anticipate their paying your damages. You’ll need to send something in writing to the adjuster specifically addressing how much your diminished value is, and demanding payment. One of the best ways to do this is via email because there is a specific time and date stamp associated with electronic communication. The next best way is to send a fax and make sure you keep the confirmation page. The third method is to send a letter via mail. If you must mail the letter, it’s best to track its delivery certified with return receipt requested to make sure they received it. If you like to be meticulous, you can use all three methods, just be sure that the documentation doesn’t deviate from one method to the next.
If you utilize a diminished value appraiser then they should be able to provide you with a sample demand letter. If you don’t have a professional working with you, then you can find sample demand letters online. It’s important to include all information the company will require and be certain that your demand is clear and concise. It’s also good to include a deadline date in all of your demands. This helps to prevent the adjuster from dragging things on. Also, If you have to incur additional expenses and your cost goes up, for instance you have to litigate the matter, then you don’t want the adjuster going back to the amount in your outdated demand letter. A week from the date received is a good customary deadline because adjusters can be very busy people and might not have a chance to respond earlier than that.
After the demand you may need to follow up for a response. It’s best at this point to limit your communication to requesting a written response to your demand. You want to avoid getting into a discussion about diminished value as the adjuster may be better equipped or downright belligerent. If you can communicate by email then by all means do so because everything is time and date stamped. Otherwise, wait a couple days after the deadline and make a follow up call. Try your best to speak with the adjuster in person, but if you absolutely have to leave a message then consider periodic follow-up calls. Remember to limit your verbal communication on the matter unless you consider yourself to be a skilled negotiator. Try to be courteous and it’s important that you avoid an attitude with the adjuster. This almost always results in an adversarial situation where the adjuster will be difficult to deal with.
If you receive a written response, then it should either be a settlement offer, a denial, or a request for additional information. If there are no issues regarding disputed liability, then adjusters are supposed to respond in good faith within 30 days. If they don’t do so you may wish to contact their supervisor or notify the Department of Insurance.
If they make an offer, then you must decide if you will take it or not. If you don’t like the offer, you need to evaluate what you are willing to accept and try to negotiate a settlement by making written counter offers until you come to an amicable resolution.
If they request additional information then try to provide the information they requested or you may need the assistance of a professional. Many adjusters will require an unbiased third-party report.
If they deny your request then you may have to utilize a professional to assist you. Feel free to give us a call and we’d be happy to discuss your situation. Sometimes you’ll have to convince the adjuster. We’ll be happy to go over your claim and may be able to provide suggestions. Ultimately depending on the circumstances you may need to seek legal remedy.
Many times a diminished value claim will be lower than the small claims court threshold of $5,000. In that case you can file with a local justice of the peace. The insurance company has a duty to prevent judgments against their insured so this may prompt the insurance company to increase their offer. This can be risky though because insurance companies have significant legal resources and you may find yourself up against an attorney. Often times insurance companies see the economic reality that it costs more to pay an attorney to defend a diminished value case than it does to settle, but the insurance company could have in-house attorneys they pay a set salary to.

History of Diminished Value Law in Louisiana

It  has  been  recognized  in  Louisiana  for  more  than  sixty  years  that  an  injured  party  is  entitled  to  diminished value.  See Day v. Roberts, La.App., 55 So.2d 316 (2d Cir. 1951) “It was recognized in Dupuy v. Graeme Spring & Brake Service, Inc., 19 So.2d 657, Appeal from First City Court of New Orleans; W. Alexander Bahns, Judge. Suit by Aaron B. Dupuy against the Graeme Spring Brake Service, Inc., for damages to .. at page 659: “We realize that an automobile which is damaged in a fire or in an accident may sustain a depreciation in value in addition to specific physical  damage  and  that even  though  all  physical  damage  may  be  repaired,  there  may  still  remain  a depreciated value merely because the car has been in a fire or in an accident, and we have said, as have other courts, that the depreciation represents an item of damage or loss for which suit may be brought.


Most recently in 2010 specific legislation was developed to directly address the issue.  The 2010 LA Revised Statute §9:2800.17 directly addresses liability for the diminution in the value of a damaged vehicle and provides that:
Whenever a motor vehicle is damaged through the negligence of a third-party without being destroyed, and if the owner can prove by a preponderance of the evidence that, if the vehicle were repaired to its preloss condition, its fair market value would be less than its value before it was damaged, the owner of the damaged vehicle shall be entitled to recover as additional damages an amount equal to the diminution in the value of the vehicle.  Notwithstanding, the total damages recovered by the owner shall not exceed the fair market value of the vehicle prior to when it was damaged, and the amount paid for the diminution of value shall be considered in determining whether a vehicle is a total loss pursuant to R.S. 32:702.


Not long ago, in 2004 the Louisiana Court of Appeals clearly stated in Defraites v State Farm, “Louisiana law provides that diminution in value of a vehicle involved in an accident is an element of recoverable damages. In a case involving damages to an automobile, where the measure of damages is the cost of repair, additional damages for depreciation may be recovered for the diminution of value due to the vehicle’s involvement in an accident.  Davies  v.  Automotive  Cas.,  Ins.,  26,112  (La.App.  2  Cir.  127/94),  647  So.2d  419.  The  jurisprudence awarding damages  for  depreciation  involves  facts  wherein  a  repaired  vehicle  decreases  in  value,  despite  a quality repair job, solely due to the fact that the vehicle was involved in a collision.


For additional historical cases on the issue, in Hamilton v. Dalrymple, La.App., 135 So.2d 536, (1961) “Depreciation is a proper item of damage as evidenced by  decisions  of  this  court  in  Day  v.  Roberts,  La.App.,  55  So.2d  316  (2d  Cir.  1951),  Green  v.  Heard  Motor Company, Inc. et al., La.App., 63 So.2d 178 (2d Cir. 1953) and Baker et ux, v. Shreveport Railways Company, Inc., La.App., 68 So.2d 228 (2d Cir. 1953).” See also Baillio v. Western Casualty Surety Company, La.App., 189 So.2d 605, and the cases therein cited. Blevins v. Drake-Lindsay Co., Inc., La.App., 144 So. 257.
In  Kinchen  v.  Hansbrough,  231  So.2d  700  (Ct  Appl  of  LA,  1st  Cir.  1970)  (Reh’g  Den.)  the  Court  stated, “Considering plaintiff’s claim for depreciation in the value of his vehicle, our own jurisprudence is well settled that in a proper case depreciation is a recoverable item. See, for example, Foil v. Burge, La.App., 196 So.2d 567, and cases cited therein.


Louisiana’s appellate courts have established that a party may recover additional damages from a tortfeasor for the diminished value to an automobile only if “proof of such diminished value is made.” Please feel free to review the following links to view cases which address this issue:

  • Defraites v. State Farm Mutual Auto. Ins. Co., 864 So.2d 254 (La. App. 2004)
  • Orillac v. Solomon, 765 So.2d 1185 (La. 2000)
  • Smith v. Midland Risk Insurance Company, 699 So.2d 1192 (La.App.2d Cir.9/24/97)
  • Davies v. Automotive Casualty Ins., 647 So.2d 419 (La.App.2d Cir.12/7/94)
  • Giles Lafayette, Inc. v. State Farm Automobile Insurance Company,467 So.2d 1309 (La.App. 3rd Cir. 1985), writ denied, 472 So.2d 911 (La.1985)
  • Gary v. Allstate Insurance Company,250 So.2d 168 (La.App. 1st Cir.1971)

We hope you found this article to be informative.  Although we have researched various laws and decisions on the matter, we are not legal experts.  The case law content in this article should not be construed as the provision of legal advice.  This information should not be used as a substitute for obtaining advice from an attorney authorized or licensed to practice in Louisiana.