A vehicle starts losing value the moment it leaves the showroom. That loss is called depreciation and it runs continuously. There is also a second, sudden loss, one that happens in a single day, when the vehicle is damaged. Both affect how much your vehicle is worth, but they are calculated differently and are often confused.<\/p>\n
Depreciation is the gradual reduction in value due to ageing and use. It is not linear. The steepest fall is in the first few years, after which the curve flattens out. With older vehicles the difference between two consecutive model years is considerably smaller than with new ones.<\/p>\n
The speed of the fall is affected by the make and model, demand on the domestic market, the availability of parts and the cost of maintenance. That is why two vehicles of the same age and a similar initial price can be worth significantly different amounts after seven years.<\/p>\n
None of these factors can be seen from the catalogue, which we wrote about in the article on the catalogue value of a vehicle<\/a>.<\/p>\n This is a loss that occurs all at once. A vehicle that has suffered significant damage is worth less on the market even after a high quality repair<\/strong>. A buyer who learns that the vehicle took a serious impact asks for a lower price, regardless of how properly the repair was carried out.<\/p>\n That difference is a genuine financial loss and can be claimed as part of a compensation claim. It is not calculated on its own initiative. It is established separately, by comparing the value of the vehicle before the event with the value of the same vehicle after the repair.<\/p>\n There is also a third meaning of the term, encountered during claims handling. When a new part is fitted to an older vehicle, the calculation often provides for a deduction, on the reasoning that the owner receives something more valuable than what they had.<\/p>\n It becomes disputed when the deduction is applied to parts where it is not justified, or when the percentage is higher than usual for that vehicle. This is one of the most common places where a calculation can be contested, and there is more about it in the article on claiming damages from insurance<\/a>.<\/p>\n Online tools that offer an instant valuation work with a handful of inputs: make, model, year and mileage. That is enough for orientation, but not for an amount that somebody will accept in formal proceedings.<\/p>\n Such a tool cannot see the state of the bodywork, does not know whether the vehicle had earlier damage, does not recognise that expensive assemblies were replaced six months ago and does not distinguish a vehicle kept in a garage from one that worked as a taxi. All of these are differences measured in tens of percent.<\/p>\n With excavators, forklifts, combine harvesters, mobile cranes and similar assets, the year of manufacture is a weaker indicator than it is with passenger cars. What is decisive is the number of operating hours and the conditions in which the machine worked.<\/p>\n A machine with few operating hours but used in harsh conditions can be in worse condition than an older machine from a light duty regime. Passenger car catalogues do not cover this category, so the value is established purely by appraisal.<\/p>\n A valuation that can be defended contains more than a single figure at the end:<\/p>\n The date matters more than it seems. Value is established as at a precisely defined day, because the market changes, and in formal proceedings it is often the day of the loss event that is relevant, not the day of the inspection.<\/p>\n A valuation is needed when the amount enters proceedings in which somebody has to accept or contest it:<\/p>\n In all of those cases the valuation has to be reasoned, with a clear methodology, because only that kind of valuation can be defended.<\/p>\n For a vehicle valuation<\/a> or to establish the diminished market value after damage, get in touch with us<\/a>.<\/p>\n Because a new part is fitted in place of a worn one, so it is taken that the vehicle gains some value through the repair. What is disputed is the percentage, because it is often applied as a flat rate, regardless of the actual condition and the mileage covered.<\/p>\n It is the difference in price a vehicle suffers because it has been damaged, even after a professionally carried out repair. It is established by a separate calculation and claimed as a separate item, with a reasoned report showing how the amount was arrived at.<\/p>\n They give a rough orientation, but they do not take into account the actual condition of the vehicle, its equipment, service history, origin and the local market. For negotiations with an insurer, a bank or a court, a report with a reasoned methodology is needed.<\/p>\n","protected":false},"excerpt":{"rendered":" How a vehicle loses value over time, what diminished market value after damage is and when a formal valuation is needed.<\/p>\n","protected":false},"author":2,"featured_media":1307,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[61],"tags":[],"class_list":["post-1306","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-vehicle-valuation"],"_links":{"self":[{"href":"https:\/\/www.pro-expert.rs\/en\/wp-json\/wp\/v2\/posts\/1306","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pro-expert.rs\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pro-expert.rs\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pro-expert.rs\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pro-expert.rs\/en\/wp-json\/wp\/v2\/comments?post=1306"}],"version-history":[{"count":0,"href":"https:\/\/www.pro-expert.rs\/en\/wp-json\/wp\/v2\/posts\/1306\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pro-expert.rs\/en\/wp-json\/wp\/v2\/media\/1307"}],"wp:attachment":[{"href":"https:\/\/www.pro-expert.rs\/en\/wp-json\/wp\/v2\/media?parent=1306"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pro-expert.rs\/en\/wp-json\/wp\/v2\/categories?post=1306"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pro-expert.rs\/en\/wp-json\/wp\/v2\/tags?post=1306"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Diminished market value after damage<\/h2>\n
Depreciation of parts when a loss is calculated<\/h2>\n
Why online calculators often miss the mark<\/h2>\n
Working machines and plant equipment<\/h2>\n
What a reasoned valuation looks like<\/h2>\n
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When you need a formal valuation<\/h2>\n
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Frequently asked questions<\/h2>\n
Why is depreciation deducted from the amount of the loss?<\/h3>\n
What is diminished market value and can I claim it?<\/h3>\n
Are online calculators reliable?<\/h3>\n