Detailed Answer
Short summary: If your vehicle lost market value after a collision and repair, you can obtain a diminished value quote (an appraisal or estimate of that loss) and present it to the at-fault insurer or your own insurer. The typical process in New Mexico is: gather evidence, choose a valuation method or appraiser, obtain a written diminished value report, and then submit a demand. If the insurer disputes the claim, you can negotiate, use appraisal/independent evaluation provisions, or pursue dispute resolution. This article explains each step and what you’ll need.
1. Confirm you may have a diminished value claim
Not every car that is repaired has recoverable diminished value. Diminished value usually applies when an insurer or at-fault party pays to repair your vehicle but the vehicle’s market value still falls because it now has an accident history. Typical indicators that you may have a claim:
- Your vehicle was repaired after a collision and the vehicle history (Carfax, AutoCheck) will show an accident.
- Your vehicle was not a total loss (if total loss, recovery typically follows a different process).
- Comparable sales show vehicles without accident history sell for more than yours after repairs.
2. Collect the documents you will need
Before seeking a quote, assemble documentation to support the diminished value claim:
- Photos of damage and completed repairs.
- Repair invoices and parts/labor details.
- Vehicle identification number (VIN) and mileage at time of accident and repair.
- Pre-accident evidence of value: purchase receipts, prior appraisals, trade-in offers, or comparable listings (same make/model/year/options/mileage).
- Vehicle history report (Carfax, AutoCheck) showing the accident entry.
- Any insurer communications or settlement offers.
3. Choose how to get the diminished value quote
There are three common routes. Pick the one that fits your budget and the dispute risk.
- Independent professional appraisal: Hire a licensed appraiser or auto valuation specialist who prepares a written diminished value report. Look for appraisers with automotive appraisal credentials (ASE certifications, MAI/automotive appraisal accreditation, or membership in appraisal organizations). Expect a formal report with methodology, comparable sales, and a dollar estimate.
- Consumer diminished value services / valuation companies: Several third-party services provide diminished value reports for set fees. Quality varies; choose one that provides a transparent methodology and sample report.
- Insurer’s appraisal or their offer: The at-fault insurer may offer an internal diminished value estimate. You can accept, negotiate, or obtain an independent appraisal to challenge it.
4. Common valuation methods explained
Appraisers may use different methods. Understand the basics so you can evaluate a quote:
- Market-comparison method: Compare sale prices of similar vehicles (make, model, year, mileage, options) with and without accident history. The difference in fair market value supports the diminished value amount.
- Cost-of-repair / diminished utility: Considers the visible and potential hidden defects after repair that reduce buyer utility, often used as a supplement rather than sole method.
- Formula-based approaches: Some companies use automated formulas (for example, percentage formulas that subtract a set percentage of pre-accident value based on damage severity). These are quick but less tailored to individual vehicle market conditions.
5. Inspection and report
An appraiser will typically inspect the vehicle in person (or, less ideally, via high-quality photos), review repair invoices, and research comparable sales. The appraiser then issues a written report explaining the method, comparables, and a clear dollar amount for diminished value. Expect the inspection and report to take anywhere from several days to a few weeks depending on the provider.
6. Present the quote and demand payment
Send a written demand to the at-fault insurer (or your own insurer, depending on whether you pursue a third-party or first-party claim). Include:
- The written appraisal/report.
- Repair invoices and photos.
- Vehicle history report and comparable sales evidence.
- A clear monetary demand and a deadline for response (commonly 14–30 days).
Keep copies of everything and send by a trackable method (email with read receipt plus certified mail if possible).
7. Negotiate, use appraisal clause, or escalate
The insurer may accept, reject, or make a counteroffer. Options if they deny or undervalue:
- Negotiate using additional comparables or a second appraisal.
- Use any appraisal or dispute-resolution clauses in the insurance policy (some policies contain appraisal/arbitration clauses for valuation disputes).
- File a complaint with the New Mexico Office of Superintendent of Insurance (consumer complaints can sometimes prompt a review of insurer handling).
- Pursue small claims court or civil litigation for larger claims — consult an attorney before filing suit.
Special notes about insurance and New Mexico
New Mexico does not have a widely used statute that specifically defines diminished value recovery in every scenario, so claims often rely on general insurance and tort principles and the evidence you present. For consumer help with insurance disputes, the New Mexico Office of Superintendent of Insurance provides guidance and a complaint process: https://www.osi.state.nm.us/.
Timing tip: Don’t accept a final settlement for property damage until you understand whether diminished value might apply. Many property damage settlements include language that releases further claims for the accident; accepting a repair-only payment without preserving your rights can foreclose diminished value recovery.
Disclaimer: This is general information, not legal advice. If you need legal advice about a specific diminished value claim in New Mexico, consult a licensed New Mexico attorney.
Helpful Hints
- Get an appraisal before signing a full-release settlement from the insurer.
- Choose an appraiser who documents market comparables and explains methodology in writing.
- Keep detailed repair invoices—insurers often scrutinize repair quality and parts used (OEM vs aftermarket).
- Collect vehicle history reports immediately after repair to document the recorded accident.
- Expect to pay a fee for a quality independent appraisal; compare providers and request sample reports.
- Send your diminished value demand in writing and keep all communications recorded.
- If the insurer delays or denies without a reasoned explanation, consider filing a complaint with the New Mexico Office of Superintendent of Insurance: https://www.osi.state.nm.us/consumers/file-a-complaint/.
- For large claims or complicated disputes, talk with a New Mexico attorney experienced in auto claims; many offer free consultations to evaluate claim viability.