How is Vehicle Depreciation Calculated?
When calculating vehicle depreciation, we encounter a twofold distinction. The date of October 4, 2021, is significant because, on this date, the procedures and principles for calculating vehicle depreciation compensation were established in the Official Gazette. Therefore, the calculation will be done in two different ways, depending on whether the accident occurred before or after October 4, 2021.
1. Calculating Depreciation Compensation for Vehicles Involved in Accidents Before October 4, 2021:
Before October 4, 2021, the depreciation compensation for vehicles involved in accidents was calculated based on expert reports prepared as a result of market research. This system can be briefly described as follows: what was the market value of the vehicle one day before the accident, and what was its value one day after the accident? The difference between these two values was calculated as the actual loss of the person.
Although experts made efforts to reach a conclusion based on previous practices and the procedures and principles outlined in Supreme Court decisions, these reports could still contain significant errors in achieving absolute accuracy because they were the product of subjective reviews and observations. To address such issues in practice, a new calculation system was introduced on October 4, 2021. In this new system, every aspect of vehicle depreciation was detailed, and a mathematical formula was established by assigning separate multiplier values to each factor. We will discuss the details of this new system under a separate heading below.
In accidents before October 4, 2021, when calculating the depreciation compensation for damaged vehicles, experts would consider factors such as vehicle mileage, parts replaced, and previous damage records based on court rulings. The 17th Civil Chamber of the Supreme Court clarified the issue in its decision with case number 2015/18959 and decision number 2016/5661, dated May 9, 2016, by stating: "When determining the depreciation of the vehicle, the brand, age, model, and the parts damaged in the accident are taken into account, and the difference between the second-hand sales value of the vehicle before the accident and the second-hand sales value after the vehicle has been repaired is considered." However, it is worth noting that this practice completely changed after October 4, 2021. Nonetheless, the old system will continue to be applied when determining the depreciation of a vehicle involved in an accident before October 4, 2021. Now, let's move on to the changes made on October 4, 2021.
2. Calculating Depreciation Compensation for Vehicles Involved in Accidents After October 4, 2021:
As mentioned above, on October 4, 2021, the amendments to the General Conditions of Compulsory Motor Vehicle Liability Insurance were published in the Official Gazette. In the supplementary section of the Official Gazette, a new system for calculating depreciation compensation was announced. This new system is entirely based on mathematical data. We will proceed step by step according to the structure of the regulations made here.
Step 1: Each vehicle has been assigned a code according to its type. For example, cars and taxis are classified as Group A, minibuses and buses as Group B, and trucks and vans as Group C. Therefore, the first step is to determine the vehicle code of the vehicle involved in the accident.
Step 2: The market value of the vehicle will then be determined. This value is calculated by taking the average of the values specified in the Vehicle Value List of the Turkish Insurance, Reinsurance, and Pension Companies Association and the Market Value List of the Insurance Experts Executive Committee of the Union of Chambers and Commodity Exchanges of Turkey as of the date of the accident. If the vehicle value is listed in only one of these lists, that value is used directly. If the vehicle is not listed in either of these lists, the market value is determined by a value assessment conducted by an insurance expert.
Step 3: Next, the Actual Value Coefficient of the vehicle with a determined market value will be identified. This coefficient is determined according to the tables published in the supplementary section of the Official Gazette, based on the vehicle code.
Step 4: In the fourth step, the Usage Level Coefficient of the vehicle for which depreciation will be calculated will be determined. This coefficient is determined according to the vehicle code and the vehicle's mileage/operating hours as of the date of the accident, based on the tables in the chart.
Step 5: In the fifth step, the Damage Coefficient of the vehicle is determined according to the formula specified in the chart, using the corresponding Part Replacement Coefficient or Repair Coefficient along with the Paint Coefficient for the vehicle code. Following this, the Damage Amount Coefficient is calculated using the formula in the chart, based on the total damage amount, including VAT, of the damaged part as of the date of the accident. Lastly, the Damaged Parts Coefficient is determined by dividing the sum of the damage coefficient and the damage amount coefficient by 100.
Step 6: Taking into account the vehicle code and the usage level coefficient, the General Assessment Coefficient or coefficients in the corresponding table are calculated using the formula in the chart.
Step 7: In the final step, after all the calculations made so far, the Vehicle Depreciation is determined using the following formula:
Depreciation = Market Value x Actual Value Coefficient x Usage Level Coefficient x Damaged Parts Coefficient x General Assessment Coefficient
How to Use the Vehicle Depreciation Calculator
After providing this information, we will briefly explain how to fill out the above-mentioned calculator to complete our article. First, select according to your vehicle's class. Then enter the market value of your vehicle and its mileage. In the "Damage Amount" section of the calculator, you should enter the amount of damage (in TL) caused to your vehicle due to the accident. If your vehicle is for commercial or rental use, check the corresponding box. However, if your vehicle is not for commercial or rental use, leave this section blank without marking anything. If your vehicle has a previous damage history other than the current accident, enter the number of damage records. If there is no previous damage history, you can leave this section blank or write "0". Finally, mark the repairs performed on your vehicle due to the current accident. These markings are extremely important because each of the operations listed in the relevant section has a separate multiplier value. Therefore, any incorrect or incomplete data entered will affect the result. After filling out the entire form, when you press the calculate button, you will see how much the depreciation caused by your current accident is.
