Replacement Value (Wiederbeschaffungswert)

The replacement value (Wiederbeschaffungswert) is the amount an injured party would have to spend to buy a vehicle from a reputable used-car dealer that is comparable to the damaged vehicle in age, mileage, equipment and condition. The decisive figure is generally the dealer's selling price on the regional market – including the dealer's margin and, where applicable, VAT.

The replacement value must not be confused with the new-vehicle price, the current value in the insurance-contract sense, or the sale proceeds the injured party could obtain personally. It answers the question: What does it cost to procure an equivalent replacement vehicle?

Under German damages law, the injured party must be placed in the position they would be in had the damaging event not occurred. According to established case law, the replacement value forms the upper limit of what restoring the vehicle may reasonably cost from an economic point of view.

• If the repair costs exceed the replacement value minus the residual value (Restwert), this is referred to as an economic total loss (wirtschaftlicher Totalschaden).
• Under the so-called 130-percent rule (130-Prozent-Regel), a repair may still be recoverable under certain conditions even if the costs exceed the replacement value by up to 30%.
• In a total-loss settlement, the injured party generally receives the replacement value minus the residual value.

The replacement value therefore largely determines whether the vehicle is repaired or the claim is settled on a total-loss basis.

The value is determined by a qualified motor vehicle expert on the basis of a market analysis. Typical steps include:

• Vehicle identification: recording the manufacturer, model, first registration, mileage, engine and optional equipment.
• Condition assessment: taking into account previous damage, state of care, number of previous owners and maintenance history.
• Market research: analysing comparable offers on the regional used-car market as well as recognised valuation systems.
• Tax classification: stating whether the value is subject to standard VAT (Regelbesteuerung), margin-scheme VAT (Differenzbesteuerung) or is tax-neutral – this is relevant for settlement with the insurer.

The result is documented in the assessment report and substantiated in a comprehensible way.

A mid-range vehicle with average mileage is severely damaged in an accident that was not the owner's fault. Based on comparable dealer offers in the region, the expert determines the replacement value and compares it with the calculated repair costs. If the repair costs are clearly lower, the vehicle is usually repaired. If they noticeably exceed the replacement value, the expert examines settlement on a total-loss basis – in which case the replacement value and the residual value become the decisive basis of calculation.

For injured parties, a carefully determined replacement value protects against being disadvantaged in the claims settlement. If the value is set too low, the compensation may be too small – especially in a total-loss case.

For experts, the replacement value is one of the most sensitive items in the assessment report. It must reflect the market, relate to the region and be derived in a methodically sound way, as insurers regularly scrutinise this value. Transparent documentation of the comparable offers considerably increases the reliability of the report.