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BGH rules on estimated loss of value following traffic accident

Someone who is not at fault in a traffic accident may not only claim repair costs but also compensation for the loss of value of their car. The Federal Court of Justice (BGH) has now issued a guideline on the amount.

In a dispute over damages following a car accident, the BGH has established rules.
In a dispute over damages following a car accident, the BGH has established rules.

- BGH rules on estimated loss of value following traffic accident

In a dispute over damages following a traffic accident, the Federal Court of Justice (BGH) has published a decision on the assessment of the so-called mercantile depreciation. This refers to the loss of value of a vehicle that remains after an accident, despite proper repair and restoration. Even after repairs, the car remains an accident vehicle, which usually reduces its resale value.

The Senate in Karlsruhe has now ruled that the basis for estimating this mercantile depreciation is a hypothetical sale of the vehicle. Net selling prices, not gross, should be used for this. If the depreciation was estimated from the gross price, an amount equivalent to the value-added tax share must be deducted.

In the specific case, a lessee demanded compensation from the liability insurer of the other party involved in the accident after an accident. A expert appointed by the woman determined a mercantile depreciation of 5,000 euros. However, the liability insurer only paid her around 4,200 euros, arguing that an amount equivalent to the value-added tax share had to be deducted. Initially, the woman was successful with her lawsuit for the remaining approximately 800 euros.

However, the arguments of the lower courts did not withstand a review by the highest German civil court. "Unlike the appellate court, a amount corresponding to the value-added tax share must be deducted from the mercantile depreciation if it was estimated from the gross selling price," the BGH ruled. It is now important to determine whether the depreciation in this case was estimated from the net or gross selling price. Since no findings have been made on this in the proceedings so far, the case is being sent back to the Regional Court of Coburg.

The decision made by the Federal Court of Justice (BGH) overestimates the importance of the Senate's ruling in determining the basis for estimating mercantile depreciation, as the Commission, responsible for interpreting and applying European Union law, has not issued any statements regarding this matter. The Commission's stance on this issue could significantly impact how German courts assess mercantile depreciation in future cases.

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