Short answer

Diminished value is the loss in market value a vehicle suffers after an accident, even after it’s repaired. To prove diminished value in New Mexico you will generally need: (1) documentation that shows the car’s pre‑accident condition and value, (2) proof of the collision and repairs, (3) a professional diminished‑value appraisal or market comparables, and (4) your communications with the insurer. Assemble photos, repair invoices, vehicle history reports, valuation guide printouts, and a written appraisal report that explains the methodology and market evidence. If you cannot resolve the claim with the at‑fault insurer, you can escalate to the New Mexico Office of Superintendent of Insurance for help or pursue civil remedies.

What is diminished value?

Diminished value (sometimes called diminished market value) is the difference between what your vehicle was worth immediately before the accident and what it is worth afterward, assuming repairs were made. Buyers often pay less for a vehicle with an accident history. Insurance companies, buyers, and appraisers measure that loss in different ways, so objective documentation and a clear appraisal are critical.

Types of diminished value claims

• Inherent diminished value: The most common type — the market discount a repaired vehicle receives because it was in an accident.
• Repair‑related diminished value: Loss caused by substandard repairs, aftermarket parts, or incomplete fixes.
• Immediate diminished value vs. eventual resale loss: Some analyses estimate immediate post‑repair value; others estimate actual resale loss using comparable sales.

Documentation you should collect

Collect everything that shows the car’s condition, the accident, repairs, and market value before and after the crash. Keep originals and make copies.

Pre‑accident proof and value

• Pre‑accident photos showing exterior, interior, and odometer.
• Maintenance and service records that document good condition.
• Any prior appraisals or receipts that show prior market value or upgrades.
• Vehicle listings, KBB/NADA/Black Book printouts showing estimated pre‑accident value.

Accident and repair proof

• Police accident report or incident report.
• Repair estimates and detailed invoices (labor, parts, paint, replaced components).
• Photos of the damage before, during, and after repairs.
• Warranty or work order information about repairs and parts used.

Market and disclosure evidence

• Vehicle history report (Carfax, AutoCheck) showing the accident entry.
• Comparable vehicle listings (same make/model/year/mileage, with and without accident history).
• Dealer or private sale offers, trade‑in quotes before and after repairs (if available).

Insurance and communications

• All correspondence with the at‑fault party’s insurer and your own insurer (emails, letters, recorded phone notes).
• Claim numbers, adjuster names, and documented settlement offers.

Step‑by‑step appraisal process

Use an experienced diminished‑value appraiser (or an auto appraiser who performs diminished‑value reports). A credible appraisal follows a clear methodology and provides market evidence.

1. Select a qualified appraiser: Look for someone who provides written diminished‑value reports, carries insurance, and will testify if needed. Ask for sample reports.
2. Inspection: The appraiser inspects the vehicle in person (interior, exterior, frame, and undercarriage) and reviews repair invoices and photos.
3. Establish pre‑accident value: The appraiser uses valuation guides, comparable sales, and prior condition evidence to estimate what the car was worth right before the collision.
4. Calculate post‑repair value: Using market data and comparable vehicles with similar accident histories, the appraiser estimates the current market value after repairs.
5. Compute diminished value: The report shows the numerical difference and explains the methodology (comps, adjustments for mileage, options, location, market demand).
6. Deliver a written report: The report should include photos, a clear explanation of the data sources, calculations, and a final dollar figure. It should be formatted for presentation to an insurer, small claims court, or mediator.

Tip: Insurers often use their own formulas to value diminished claims. A detailed independent appraisal backed by market comparables is usually stronger than quoting a single online value.

How to present your diminished‑value claim to the insurer

1. Send a concise cover letter summarizing the claim: date of loss, claim number, brief facts, and the demand amount.
2. Attach the diminished‑value appraisal, repair invoices, photos, vehicle history report, and comparable listing examples.
3. Keep copies of delivery (email read receipts or certified mail receipts).
4. Be prepared to negotiate: insurers may respond with their own appraisal or a lower offer. Use your market comparables to support your number.
5. If the at‑fault insurer denies responsibility, remind them of their duty to investigate and consider escalating to the New Mexico Office of Superintendent of Insurance (OSI) if you have a dispute.

New Mexico consumers with claim problems can find consumer help from the New Mexico Office of Superintendent of Insurance: https://www.osi.state.nm.us/.

When to consider hiring an attorney in New Mexico

Consider legal help if:

• The at‑fault insurer refuses to negotiate or denies responsibility despite clear evidence.
• Your diminished value claim is substantial relative to the vehicle value.
• You need help preparing an appraisal or expert testimony for court.
• The case will likely go to litigation or you want to file suit in small claims or district court.

If you choose an attorney, look for someone familiar with auto diminished‑value claims and New Mexico insurance practice. Attorneys can help obtain an expert appraisal, prepare settlement demands, and represent you in court or mediation.

Timeline and typical costs

An independent diminished‑value appraisal usually takes a few days to a couple of weeks, depending on scheduling and market research. Appraisal fees vary by vehicle complexity and appraiser qualifications — expect a range from a few hundred dollars to more for specialty vehicles. Weigh the appraisal cost against the likely recovery; for smaller claims, negotiating with documentation and market listings may be reasonable before paying for a full appraisal.

Common disputes and how to solve them

• Insurer uses a low formula: Ask for their calculation and rebut it with market comparables and a detailed appraisal.
• No pre‑accident proof: Use vehicle history, prior sale listings, and valuation guides; state clearly the assumptions your appraiser used.
• Disagreement about repairs: Provide photos, repair shop warranty info, and, if necessary, a secondary inspection by an independent shop.

Helpful Hints

• Document everything immediately: photos, receipts, and notes are strongest when taken right after the accident and repairs.
• Get a vehicle history report early; once the accident posts, it may be difficult to show pre‑accident condition later.
• Use multiple sources for pre‑accident value (KBB, NADA, local comps). A single online printout is rarely enough.
• Ask the appraiser to explain their methodology in plain language and include comparable sales with links or listings.
• Keep a detailed file of all communications with insurers, including dates, names, and the substance of phone calls.
• Before paying for a full appraisal, ask the appraiser if a preliminary opinion (with estimated cost) is available to evaluate whether a full report is worth it.
• If negotiations fail, contact the New Mexico Office of Superintendent of Insurance for guidance or to file a complaint: https://www.osi.state.nm.us/.