Can I claim diminished value if I don’t own the car in Illinois?

Quick answer: Yes — but who can make the claim and how it is handled depends on who holds title or a lien (the legal owner or lender), the insurance relationships, and any lease or loan contract terms. If you don’t own the vehicle (for example you are a lessee, a borrower with a lienholder, or you were driving someone else’s car), the owner or the insurer with a subrogation interest is usually the party that must press a diminished value claim. You can still help and in many cases get compensated indirectly, but you generally cannot force a claim in your own name unless the titled owner assigns you that right.

What “diminished value” means (short)

Diminished value is the difference between a vehicle’s market value immediately before a crash and its market value after repairs. Even when repairs are done correctly, many buyers pay less for a vehicle that has an accident history. Diminished value is a type of property damage.

Common situations when you do not own the car

• Leased vehicle (title held by leasing company).
• Financed vehicle (title shows lender/lienholder).
• Borrowed vehicle owned by a friend or family member.
• Company car or fleet vehicle (title held by employer).

How the diminished value process usually works in Illinois when you are not the titleholder

1) Identify the legal owner and insurer relationships

Who controls the diminished value claim depends on legal ownership and insurance payments:

• If the title holder (owner) has collision or property insurance and the insurer paid for repairs or a loss, that insurer may have subrogation rights to pursue the at-fault party for repair costs and diminished value.
• If the at-fault driver is insured by a third-party carrier, the vehicle owner (not the driver who borrowed it) is normally the party with the direct claim against that carrier for property damage, including diminished value.
• If you are the lessee, the leasing company (title holder) often has the direct property interest. The lessee may be required by the lease to report damage and may be responsible for diminished value at lease turn-in, but the lessor typically would be the proper claimant against the at-fault party or insurer unless the lessor assigns the claim to you.

2) Practical steps to protect and press a diminished value claim

1. Get the owner involved immediately. The titled owner (or their insurer) must make the claim or assign their rights to you in writing to let you pursue it.
2. Document pre‑accident condition: photos, maintenance records, listings of similar vehicles for sale, and any recent appraisals or values.
3. Obtain a professional diminished value appraisal (market-based; “inherent diminished value”) or at minimum a written market analysis—this supports your demand amount.
4. Keep repair estimates, final bills, and a vehicle history report (Carfax/AutoCheck) showing the accident entry.
5. Notify the at-fault driver’s insurer (or the owner’s own insurer if you have first-party coverage issues) and present your demand documentation. If you are not the owner you will need written authorization from the owner or the owner’s insurer to negotiate or accept payment on their behalf.
6. If the owner’s insurer already paid to repair, check whether they reserved subrogation rights. If you paid for repairs yourself, the owner (or you if assigned) can demand reimbursement and diminished value from the at-fault insurer.

3) Lease and finance complications

Leases and loan contracts may contain specific language that affects diminished value claims:

• Lease agreements often require the lessee to return the car in good condition and may make you responsible for diminished value at lease-end. However, the leasing company (lessor) holds title and must be the one to recover diminished value from the at-fault party unless the lessor assigns that right to you.
• If there is a lienholder (bank, finance company) on the title, settlement checks sometimes list both the owner and lienholder as payees. The lienholder’s interest must be satisfied before net funds go to the owner.
• Before accepting a cash settlement or repair-only remedy, check whether the lease or lender will allow you to keep the vehicle without covering the diminished value liability; you might still owe the lessor money at lease turn-in.

4) If the vehicle is totaled

When a vehicle is declared a total loss, the insurer typically pays actual cash value (ACV) less salvage. Diminished value in the usual sense becomes less relevant because the post-accident market value is represented by the ACV settlement. Still, if the insurer paid ACV to the owner and the ACV did not reflect lost value from a prior repairable accident, the owner could argue the value was understated. Any dispute over ACV is a negotiation between the owner and insurer (or the at-fault insurer if it’s third-party coverage).

Who can sign releases and accept settlements?

Only the titled owner (or someone the owner authorizes in writing) can sign a settlement releasing the vehicle’s property claims. If an insurer paid for repairs and the insured assigned its rights to the insurer, the insurer may have authority to settle. Always make sure releases identify all parties with an interest (owner, lienholder, insurer who has paid).

Practical example (hypothetical)

Hypothetical: You lease a 2020 sedan. Another driver hits your leased car while you drive it. The other driver’s insurer pays to repair the vehicle, but the leasing company still holds title. The leasing company could pursue diminished value from the at-fault insurer, but many lessors prefer to have repairs completed and will not actively pursue diminished value themselves. You should:

1. Notify your lessor of the accident and your insurer.
2. Document pre‑ and post‑accident condition.
3. Ask the lessor whether it will pursue diminished value or assign the claim to you in writing.
4. If assigned, obtain a diminished value appraisal and present a demand to the at-fault insurer. If not assigned, understand you may still be charged lease-end fees for diminished value that the lessor seeks to recover.

How payment typically flows

• If the at-fault insurer accepts a diminished value claim, it will issue payment to the claimant named in the claim (owner or owner’s insurer). If a lienholder exists, the lienholder may also be a payee.
• If you obtain a settlement assignment from the owner, the owner can instruct how funds are distributed (for example, to reimburse your out‑of‑pocket repair costs or to cover lease deficiencies).

When you might want an attorney or legal help

• The owner or insurer refuses to pursue diminished value and you face lease-end damage charges.
• The at-fault insurer refuses to pay a reasonable diminished value amount despite strong evidence.
• Multiple parties (owner, lienholder, insurer) dispute who is entitled to settlement funds.
• Large diminished value claim or totaled vehicle with complex ACV dispute.

Helpful hints — what to do right now

• Stop: Don’t sign anything that releases the owner’s property claim without checking with the owner and confirming lienholder interests.
• Document: Take many photos of the vehicle inside and out, immediately after the crash and after repairs. Save receipts, repair estimates, and rental car invoices.
• Get an appraisal: Hire a reputable diminished value appraiser who uses market comparables and a written report rather than relying only on formula calculators.
• Talk to the owner: Ask the titled owner to make the claim or assign the claim in writing. If the owner’s insurer paid, ask whether the insurer will pursue subrogation for diminished value.
• Check contracts: Read your lease or loan documents to see how damage and diminished value are handled. Look for clauses about repairs, notification, and end‑of‑lease charges.
• Negotiate carefully: If the at-fault insurer offers a quick low cash payment, consult the owner and consider whether that resolves all potential lease or lien obligations.

Where to find more Illinois-specific resources

For state law and statutes, start at the Illinois General Assembly site (https://www.ilga.gov) and search the Illinois Vehicle Code and the Illinois Insurance Code for provisions about property damage, titles, and insurance conduct. If you need help interpreting a contract or pursuing a claim, consider contacting a licensed Illinois attorney who handles auto insurance and property damage claims.

Disclaimer: This article explains general principles about diminished value claims in Illinois. It is educational and not legal advice. It does not create an attorney-client relationship. For advice tailored to your situation, consult a licensed Illinois attorney.