My car was rear-ended and the other driver's insurance company paid for repairs of $10,500. The body shop did a good job, but I've only had my car for 10 months. I am trying to decide if I should keep this car or trade it in for a new one. I just am not sure which is best.

If you decide to sell your car, prepare yourself for the discovery that the vehicle might not be worth as much as it was before the accident.

Even if the repairs were top-notch, a late-model car that sustains substantial damage suffers some loss in market value, known as diminished value or diminution in value.

There are three possible reasons to explain why a car experiences diminished value after a wreck.

1. Some say that cars that have been involved in accidents are inherently less valuable, even if they were expertly repaired.
2. Another school of thought says diminished value occurs when the insurance company pays for inferior aftermarket parts or refuses to pay for specific repairs recommended by a body shop.
3. Poor-quality repairs, such as poor welding or refinishing, can also lead to diminished value.

When filing a claim with your own insurance company, you have little recourse to collect diminished value from the insurer in most states. Policy language that exempts diminution in value for first-party property damage claims has been approved by insurance regulators for use in 45 states, Washington D.C. and Puerto Rico. The endorsement has not been approved in Georgia, Hawaii, Kansas, Maryland or North Carolina. Residents in those states should talk to their insurance companies or check with their state department of insurance to learn about the rules in such cases.

In cases where another driver's car insurance company pays the tab, you might have a better shot at getting reimbursed for diminished value, but this will vary by company.

[Let Insure.com help you find affordable car insurance now.]

For more, see diminished value car insurance claims get the wrecking ball.