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The assessment of the reduced market value
in the light of recent case law


Dipl.-Ing. Klaus Kukuk, Overath.

1.1 Disappointment when it "cracks
The motor vehicle has always been not only a means of transport but rather an expression of technical fascination for the motorist, but, at least since the oil crisis in 1973, also a necessary evil in times of individual mobility and the additional threat of climate catastrophe.
Today, the automotive industry is in a position to produce vehicles that have reached standards of durability and quality that pave the way for a possible rethinking of society in the direction of sustainability and resource conservation. While the standard vehicles of the 60s and 70s of the last century were more a reflection of the throwaway society in terms of quality, the demand on a car has changed completely and is now more comparable to a demand for quality and durability that used to only belong to owners of luxury class vehicles such as those manufactured by O.W. Bentley, Rolls Royce and Aston Martin.
But, along with the fascination, comes an unequal disappointment when it "crashes".
It is necessary to consider this reduction in the market value associated with the traffic accident damage.

1.2 Case Law on Impairment
In its decision of 30.05.1961 VersR 61 1043,58,453 (1 on the diminished market value, the Federal Court of Justice (BGH) in 1961, abandoning the case law up to that time, declared that the diminished market value of a motor vehicle (motor vehicle) resulting from a traffic accident must be reimbursed in the form of a monetary amount, irrespective of whether the vehicle is sold or not.

In the judgement of 3 October 1962 Z 35,396,399 (2), the Federal Supreme Court did not object to the attribution of a reduced market value to a vehicle with a mileage of over 100,000 km. In a later decision of 18.09.1979 VersR 1980 46,47 (3), the Federal Supreme Court considered that a mileage of 100,000 km could generally be used as an upper limit for the compensation of a reduced market value for passenger cars.

The early decisions of the Federal Court of Justice in the 1960s and 1970s, which ensured that a reduction in value was generally awarded up to 100,000 km until after the turn of the millennium, are no longer up-to-date.

The Regional Court of Oldenburg has already recognised on 11.10.1989 file number 4 S 920/89 (4,
that: "even in the case of vehicles more than 5 years old and with a mileage of more than 100,000 km, a reduction in value must be reimbursed"... There is no denying that the further development of modern production technology in recent years has led to the production of vehicles whose service life is by no means exhausted within a period of 5 years and whose mileage often exceeds 100,000 km.
200 000 km reached."
Compare Landgericht Scherden 01.06.1990 Aktenzeichen 6 S 243 89 (5 :" The Ruhkopf-Sahm calculation method is only to be used for the determination of a reduction in value if there is a lack of concrete findings by an expert consulted".

The Federal Court of Justice then recognised on 23.11.2004 in its judgement no.: VI ZR 357/03 (6: "This significance can change over time with technical development and the increasing longevity of vehicles (e.g.: as a result of longer durability of engines, fully galvanised bodies etc.). A corresponding change on the used car market is reflected in particular in the valuation of used vehicles by appraisal organisations such as Schwacke and DAT, which now go back up to 12 years in their quotations and expressly point out that all market quotations refer to accident-free vehicles."

1.3 Longevity
In recent years, the development of modern production technology has resulted in vehicles with a very long life expectancy and mileages of more than
200 000 km are produced, even mileages of 500 000 km are no longer the absolute exception.

In the 1960s, for example, the manufacturer's instructions for the Mercedes Benz 200 required the engine oil to be changed every 2,500 km. Today, oil change intervals of 10 times the mileage are the rule.

Fully galvanised bodies and manufacturing processes with low tolerances and a high degree of purity catapult the average life expectancy of vehicles far beyond the 10-year mark.

Almost all manufacturers have extended their guarantees to three/five years and/or 100,000 km. Rust-through guarantees of up to 12 years are now the norm.
In the goodwill departments, applications are processed up to 300,000 km in the passenger car sector (truck sector up to 1,000,000 km!).
The limit to which, according to today's standards, a reduction of the vehicle's value is usually dictated by the market is rather fluid. It is directly related to the value of the vehicle itself and ends with vehicles that have such a low commercial value that a measurable reduction in value no longer occurs after the accident damage has been repaired, and begins in the area where the damage due to accident damage exceeds the de minimis limit.

According to the established case law, the mercantile diminution in value is a reduction in the market value that remains despite the complete and proper repair of a motor vehicle that has been substantially damaged in an accident, solely because a large proportion of prospective buyers are reluctant to purchase accident-damaged vehicles, mainly because of the suspicion of hidden damage, which influences the price. This difference in value constitutes direct material damage.

In addition, it must be taken into account that an accident destroys the unique selling point of the integrity of a vehicle.

1.4 Mass procedure- Impairment calculation
The determination of the reduced market value after an accident in the case of proper and professional repair is a mass procedure and therefore relies on typification and simplification.

1.5 Factors for impairment calculation

The decisive factors for the assessment of the reduced value are still the extent of the damage and the value of the damaged vehicle as already explained in the essay by assessor Rolf Ruhkopf and engineer Karl Heinz Sahm "über die Bemessung des merkantilen Minderwertes". 01.07.1962 VersR 62/593 (7. The repair costs provide information about the extent of the damage and are directly related to the reduced market value. The second essential factor is the value of the vehicle. The condition of the vehicle, first-hand sale, initial paintwork, warranty, make and mileage before the accident also play a dominant role.
1.5.1 The value of the vehicle
For the additional consideration of the vehicles beyond a mileage of 100,000 km and an age of 5 years, it is important on the one hand to assess the extent to which the commercial value of the vehicle behaves over the time axis, taking into account the degree of use. If a vehicle reaches such a low trade value that a measurable reduction in value no longer occurs after the accident damage has been repaired, such a vehicle falls off the grid. Often the trade value of a new vehicle falls in a parabolic fashion along the time axis. After reaching its low point, however, the trade value of some vehicles rises again along the time axis.
These are subsequently collector vehicles/youngtimers the future classic cars and should not be disregarded in the consideration.

If a 1911 chain-driven Double Phaeton Mercedes is in completely original condition and possibly still in the manufacturer's first paintwork and the manufacturer no longer has any documentation about the vehicle, then this vehicle is very valuable as a contemporary witness. The vehicle can be used to check whether comparable vehicles were restored correctly or according to contemporary methods.
It is understandable that such a vehicle can quickly reach many times the value of a comparable vehicle that is not in original condition but has possibly already been restored several times.

The value of a car usually decreases in the initial phase.

It experiences a trough in value. The value then tends to rise again if the condition remains good.

Value parabola:


1.5.2 Repair costs / extent of damage
As soon as the accident repair comes close to a total restoration and all factors of the unique selling proposition have been irretrievably destroyed by the accident, the greatest mercantile/technical reduction in value has occurred.

The following is an attempt to approach the calculation from the point of view of the technical expert. The competent civil judge will know how to assess the reduction in value in the overall context of the damaged vehicle in relation to the market, taking into account the partial or complete loss of the unique selling proposition:

Klaus Kukuk

Annex Dekra report (1 BGH of 30.05.1961 VI ZR 139/60 VersR 61 1043,58,453,707,708
(2 BGH of 03.10.1961 Z 35,396,399
(3 BGH of 18.09.1979 VersR 1980 46,47
(4 Oldenburg Regional Court of 11.10.1989 4 S 920/89
(5 LG Scheiden of 01.06.1990 6S 243 89
(6 BGH of 23.11.2004 Vi ZR 357/03
(7 Essay Ruhkopf- Sahm of 01.07.1962 VersR 62/593


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