If your vehicle was damaged in an accident in the state of North Carolina and underwent repairs, its resale value is likely to be less than what it was before the crash. This loss in market value is known as diminished value, and it is recoverable in North Carolina through a diminished value claim filed with the at-fault party’s insurance company. If the other driver was uninsured, you can also file a diminished value claim with your own insurance company. 

In addition to the title disclosure, North Carolina has a damage disclosure law that specifically pertains to cars that are less than five years old. Dealers and private party sellers of vehicles that are less than five years old are required by law to disclose any damage that’s over 25% of fair market value to the buyer IN WRITING. There’s no sweeping the accident under the rug, you’re required by law to tell potential buyers about it. 

For example, if your car has a market value of $20,000, it only needs to suffer $5,000 of damage to be subject to the disclosure law. Disclosing your vehicle’s damage history will have a negative impact on its value since most buyers would choose a vehicle without an accident history over one that does. The accident history will scare off many potential buyers and those who do remain interested will demand a steep discount to assume the risk of purchasing a previously damaged vehicle. 

This loss of value due to the accident history is known as diminished value.