So what exactly is diminished value? Diminished value, also referred to as diminution of value, is the sudden loss of value your vehicle sustains after an accident. Why would a car lose value after an accident? Think about it this way. You have done your research and are in the market for a new car. You find two identical cars for sale in your hunt that are being offered for the same sales price. You run the vehicle history report on both cars only to find out that one of them has an accident in its history. Which would you purchase? Most buyers would purchase the one with a clean accident history, Why would someone risk the uncertainty of buying the car with a prior loss when they could pay the same price for one with a clean history. In order to entice buyers to buy the car with a prior loss, the seller must discount the vehicle to make it more attractive.