Diminution of Value or Loss of Use?

While the terms of "diminution of value" and "loss of use" are often used together, they should not be used interchangeably.

Diminution of value refers to the loss of value to an automobile because it was involved in an accident. The Romco, Inc. v. Broussard, 528 So.2d 231 (La. 1988) court found that "where an award of cost of repair is the measure of damages in a case involving damages to an automobile, additional damages may be recovered for diminution of value by virtue of the vehicle having been involved in an accident, provided proof of such diminished value be made." The term "depreciation" can also be applied in such situations.

The Romco, Inc. court went on to say that "where the measure of damages is the cost of repairs, damages for depreciation are also recoverable where there is sufficient evidence presented as to the amount the vehicle decreased in value solely due to being involved in a collision."

Damages for loss of use are measured by the rental cost of a substitute vehicle. Alexander v. Qwik Change Car Center, Inc., 352 So.2d 188 (La. 1977). In Romco, Inc. the Louisiana Supreme Court held that the damages for loss of use are restricted to that period of time in which the owner becomes aware of the situation and could secure a replacement or have the vehicle repaired