FAQ: Diminished Value When You Do Not Own the Car (New Hampshire)

Short answer: In New Hampshire, diminished value (the loss in a vehicle’s market value after an accident) generally belongs to the legal owner of the vehicle — usually the person or company on the vehicle title. If you do not own the car (for example, it is financed, leased, or a rental), your rights to recover diminished value are limited. You may still be able to get your insurer to pay, ask the vehicle owner to pursue a claim, or pursue a third‑party claim if you have a contractual or out‑of‑pocket loss tied to the vehicle. This article explains how the process typically works and what steps to take.

Disclaimer

This is general information, not legal advice. I am not a lawyer. For advice about your specific situation, consult an attorney licensed in New Hampshire or contact the New Hampshire Insurance Department consumer resources.

How diminished value works in general

Diminished value is the difference between the market value of a vehicle immediately before an accident and its market value after repairs. There are three common categories:

• Immediate diminished value: The drop in resale value right after an accident, before repairs.
• Inherent diminished value: The loss in value that remains after a proper repair because buyers prefer cars without a damage history.
• Repair-related diminished value: Loss caused by poor repairs or non‑OEM parts.

Who has the right to claim diminished value in New Hampshire?

Ownership (title) matters. The person or entity listed on the vehicle’s title has the primary property interest and therefore the clearest right to claim diminished value from an at‑fault driver or that driver’s insurer. Typical ownership scenarios:

• Fully owned vehicle: The titleholder can pursue diminished value from the at‑fault party or that party’s insurer.
• Financed vehicle (lienholder): A bank or finance company holds a lien and the title typically lists that lienholder. The buyer still owns the vehicle, but the lender has a security interest. The owner (buyer) will usually be the one to claim diminished value, but the lender’s interest can complicate settlement and payoff handling.
• Leased vehicle: The leasing company (lessor) is the record owner. The lease agreement will state who is responsible for damage and diminished value claims. Often the lessor must be involved in any claim or settlement.
• Rental car: The rental company owns the vehicle and typically files any diminished value claims. Your liability depends on the rental contract and any coverage you purchased.

What happens when you do not own the car?

If you don’t own the car, your options depend on your relationship to the vehicle (driver, lessee, renter), the contracts in place, and who is at fault:

Driver of another person’s car (you are insured but not the titleholder)

• You should report the accident to your insurer and the vehicle owner’s insurer. The titleholder must be notified because they own the diminished value claim.
• Your insurer may handle repairs, medical bills, and loss of use on your behalf, but diminished value recovery typically goes to the titled owner.
• If your insurer pays the owner for repairs, it may have subrogation rights against the at‑fault driver’s insurer. Subrogation can include diminished value if the insurer pursued that recovery.

Financed vehicle

• The buyer (registered owner) usually can seek diminished value, but the lender’s lien must be considered when settling — payoff and title issues can affect who gets settlement funds.
• Before accepting any diminished value settlement, confirm whether the lender must be paid or must sign off. The lender may hold a security interest and require certain handling of proceeds.

Leased vehicle

• The leasing company often requires you to report damage and to obtain written authorization before repairs. The lessor is the legal owner and generally controls diminished-value claims.
• Lease contracts sometimes assign responsibility for diminished value to the lessee; read the agreement. If the lease requires you to cover diminished value, you may be responsible to the lessor if it does not recover from the at‑fault party.

Rental car

• The rental company is the titleholder and usually claims diminished value. How much you owe depends on the rental contract and any insurance you bought (collision damage waiver, credit card coverage, or your auto policy).

Steps to take if you do not own the car

1. Identify the legal owner: Check the registration and title. If a lienholder or lessor appears, note their contact information.
2. Notify all insurers: Tell your insurer and the vehicle owner’s insurer. Be honest and document communications.
3. Check contracts: Read lease, finance, and rental agreements for clauses about damage and diminished value responsibilities.
4. Document the vehicle’s condition: Collect pre‑accident photos, maintenance records, the Blue Book or market valuation, and repair estimates/invoices. These support a diminished value claim.
5. Get a professional diminished‑value appraisal: A qualified appraiser or evidence of comparable sales can quantify inherent diminished value for the titleholder’s claim.
6. Coordinate with the titleholder: If you are a driver or lessee, ask the owner to file the diminished value claim. If the owner refuses but your lease or contract obligates you, you may need legal advice.
7. Consider subrogation and your insurer’s role: If your insurer pays certain losses, it may pursue recovery from the at‑fault party, which could include diminished value claims on behalf of the owner.
8. Keep records: Save repair receipts, communications, appraisal reports, and insurance forms.

Practical hypotheticals

Hypothetical A — You leased the car and hit a pothole that causes frame damage. You report the loss to your lease company and their insurer. The lessor hires a repair shop and demands diminished value from the at‑fault driver’s insurer. Because the lessor owns the car, you will likely not be the one to recover diminished value, but the lease may require you to cover shortfalls.

Hypothetical B — You borrow a friend’s financed car and cause an accident. The friend is the titleholder and files a diminished value claim with the at‑fault driver’s insurer. If the friend does not pursue diminished value, but you paid for some repairs, you might be able to seek reimbursement from the at‑fault driver for your out‑of‑pocket losses — not the titleholder’s diminished value.

When to involve an attorney

• If the titled owner refuses to pursue a valid diminished value claim but a contract or your payments suggest you should be compensated.
• If an insurer denies a diminished value claim and you believe the denial is unreasonable. The New Hampshire Insurance Department can help with complaints: NH Insurance Department.
• If the leasing company asserts you owe diminished value under the lease and the amount is large or disputed.

Statutes and official resources (New Hampshire)

New Hampshire statutes and regulations that govern insurance, property, and consumer protections can be found at the state legislature’s RSA repository: https://www.gencourt.state.nh.us/rsa/html/. For consumer guidance on auto insurance, complaints, and insurer behavior, see the New Hampshire Insurance Department: https://www.nh.gov/insurance/.

Helpful hints — quick checklist

• Always verify the legal owner on the title before assuming you can claim diminished value.
• Notify both your insurer and the vehicle owner’s insurer immediately after an accident.
• Keep thorough documentation: photos, pre‑accident valuation, repair invoices, and appraisals.
• If the car is leased or financed, read the agreement for damage and diminished value obligations.
• If you paid for repairs out of pocket, save receipts — you may recover those even if you cannot recover diminished value.
• Contact the New Hampshire Insurance Department for help with insurer disputes: https://www.nh.gov/insurance/
• Consider consulting a New Hampshire attorney experienced in insurance or consumer law if the claim is large or complex.

If you want, tell me whether the vehicle is leased, financed, rented, or owned by someone else. With that detail I can walk through the most likely steps and draft sample language to request diminished value from an insurer or leaseholder.