Accident report: residual value of a car

• Residual value definition: The residual value is the value of a car after a total loss. It shows how much the damaged vehicle is still worth on the market. The residual value comes into play when the vehicle repair is higher than the replacement value.
• Compensation: Compensation in the event of a total loss consists of the difference between the replacement value and the residual value. This amount is covered by the insurance company.
• Determination of residual value: The residual value is determined by an expert. The damage is taken into account and comparative values from platforms such as a residual value exchange are used.
• Residual value offer: If the insurance company offers a higher residual value offer, you should check this first before you accept it. In such a case, you can include comparable cases from a residual stock exchange, car dealers or the weak list in the report to strengthen your position.

What is the residual value of a car?

The residual value is an important factor in settling claims following an accident. As soon as the repair of the vehicle is higher than the replacement value, the residual value comes into play.

Definition of residual value

The residual value of a car is, as the name suggests, the remaining value of a car after an accident. It's more about the value after damage has been inflicted. The residual value of the car is determined as part of an expert opinion and plays a major role in settling claims.

The residual value can vary significantly. It depends on various factors, which are explained in the course of the blog. For example, despite extensive damage, a car may still have a high residual value if it is a popular model or individual spare parts are in good condition.

What role does the residual value play?

In claims settlement, the residual value helps to determine what is being done. If the repair costs of the vehicle are higher than the replacement value, i.e. usually in the event of a total economic loss, then the residual value comes into play.

The replacement value and residual value are offset against each other to determine the amount of compensation, which is reimbursed by the insurance company.

Difference: replacement value and residual value

So that there is no confusion of terms, here is a brief explanation.

What is the replacement value?

The replacement value is the amount that would be necessary to replace the accident vehicle (in the state before the accident) with an equivalent model. The damage caused to the vehicle in a traffic accident is therefore irrelevant here.

It is only a question of the value before the accident. Here, among other things, the model, age or mileage are used to make an assessment.

What is the residual value of a car?

The residual value, on the other hand, reflects the current value of the accident vehicle. The amount of damage is included here. The residual value in the report is calculated by a motor vehicle appraiser.

Determining the residual value

Now the question is, how are the replacement value and residual value determined? There are automotive experts for this who provide a detailed Create a car report.

Analyzing the residual value of a car is not only about technical data but also about the latest economic data. In the event of a total loss, the expert must establish a connection between the technical damage and the current market situation.

Since the insurance company uses the amount to calculate how much money the injured party receives, it is important that the current data is reflected here.

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Residual value in the report

The residual value is determined as part of a motor vehicle report. The report is an important part of claims settlement and is therefore of great importance for insurance companies. They make sure that the residual value is not too low, as this would mean that they would have to pay out higher compensation.

The injured party should therefore be well informed and, in case of doubt, have a counter-report drawn up. If the counter-opinion is independent, there is a fair residual value assessment and you can use this report to enforce your claims in court or insurance.

It is therefore important not to rely on the opposing insurance company's expert, but to hire your own expert.

Assessment by automotive experts

A motor vehicle appraiser specializes in determining the residual value of an accident vehicle. First, the expert prepares a detailed analysis of the damage event. This includes the amount of damage, which is related to the type of damage and complexity, the repair costs, and also the course of the accident. The latter is not relevant for determining the residual value.

The automotive expert is now drawing on examples from residual value exchanges, car dealers or buyers to provide a comparable assessment of the residual value. The Schwacke List also serves as a reference for a fair comparison of the residual value of the motor vehicle.

Influencing factors

The most important factors influencing residual value offerings are as follows:

Market value of the vehicle: The residual value is often lower when the car is older. This characteristic of the accident vehicle must be taken into account.

Amount of damage: The higher the damage, the less remains of the car, which is why the residual value is lower, i.e. in the event of a total loss, the residual value of the car is the lowest.

Residual stock exchanges: The current offers of comparable cars significantly influence the residual value.

Who pays the compensation?

The compensation is calculated from the residual value, but who pays the compensation?

Difference: liability insurance vs comprehensive insurance

One liability insurance When the subject of the debt issue has been resolved, assumes the difference between replacement value and residual value. The injured party therefore has no costs, as the opposing insurance company, i.e. that of the person responsible for the accident, reimburses the value.

As always, it is important to submit all relevant documents to the opposing insurance company as quickly as possible. This is because if the report is submitted late and the required documents may not be complete, there may be delays.

In the event that you yourself are to blame for the traffic accident, the jump Comprehensive insurance one. The owner of the car is compensated by the insurer after a thorough residual value assessment.

There are various models of comprehensive insurance, which cover different amounts. Each contract is individual, so in the event of a total loss, it is necessary to check what exactly is covered in the injured party's insurance.

Total loss basis

In the event of a total economic loss, the settlement is based on a total loss. This term means what has already been mentioned, namely that the difference between replacement value and residual value is reimbursed instead of payment of repair costs. This is because the repair costs would be higher than the replacement value (minus the residual value).

This type of billing is particularly relevant for older vehicles. With a car that is either old or has a high mileage, the replacement value is often low. Lower than most car drivers expect it to be.

This may result in surprises when the amount of compensation is calculated. This is because the compensation is only the replacement value minus the residual value.

Doubts about the amount of the residual value

When calculating the residual value, there is no single correct solution, which is why there are also disputes when calculating the residual value from time to time.

Dispute with insurance companies

It often happens that an insurance company is not satisfied with the residual value offer. As a result, the insurance company may suggest a higher residual value offer. Since the amount of the residual value is deducted from the replacement value, it is in the interest of the insurance company that the residual value is as high as possible. A higher residual value offer means that less compensation has to be provided by the insurance company.

In such a case, you should not be unsettled and not immediately accept the insurance offer. If this happens, it is advisable to hire a lawyer to be able to make a better judgment and to make sure that your own interests are represented. It makes sense to contact a specialist lawyer who is particularly familiar with car insurance. It can also be helpful to have an independent report prepared.

What you should not forget as an injured person is that you have the opportunity to go to court. This can be particularly useful for large and complex cases. Insurance companies sometimes try to calculate the residual value higher than it actually is by making complicated invoices.

To understand this, you should carefully review every offer you receive from the insurance company.

The role of residual stock exchanges

These platforms are used to realistically determine the residual value. Should the insurance company insist on a higher residual value offer, the residual value offers from such a platform can be included in the report. This confirms the fixed residual value, as it is based on the value on the current market.

It is important to compare the accident vehicle with a comparable vehicle on the platform. This is the only way to calculate the residual value in a meaningful way.

Residual stock exchanges are not only good for determining the price of the damaged car, but also for selling the car. After all, a stock exchange is a marketplace. Each platform is different, but some of them offer sales process support, which eases the tense and stressful situation following a total loss and makes it less stressful,

How do you behave in such a situation?

As the injured party, you should not accept the very first offer, but find out more. The weak list, for example, usually helps the injured party to find the amount of equivalent offers on the market.

Seeking help from a specialist lawyer is also helpful, as he knows how to check the residual value.

Even in such a situation, it often helps to talk to acquaintances who have already been injured in order to get tips and a second opinion.

The role of accident reports in claims settlement

An independent appraiser prepares a vehicle's report. Why is this report so important?

The accident report as a basis

The accident report forms the basis for the entire claim settlement process. In the event of a total loss, it is therefore imperative to have an expert report drawn up by a motor vehicle expert.

In addition to the residual value, it also contains detailed calculations of the replacement value and repair costs. These costs are essential, because without them, the insurance company will not pay the costs that the injured party will incur. Need clarification if you have any further questions

Necessary information

The following points should definitely be included in their report to make sure they get your money.

Description of damage: A detailed list of the damage to the car

repair costs: An appraiser's assessment of how much it costs to repair the vehicle

Residual value: Determining the residual value of the car after a traffic accident

Replacement value: Determining the value of the vehicle before the accident

Tips for determining residual values

To ensure that the residual value of your car is correctly determined and the valuation is as fair as possible, there are a few things to pay attention to.

The insurance company then pays the desired difference between residual value and replacement value.

What should you pay attention to?

Independence of the reviewer: In order to avoid conflicts of interest, the commissioned motor vehicle expert should be independent so that he can give a neutral assessment of the vehicle

Residual value supply from several sides: Obtaining residual value offers from various sources, such as a residual value exchange, car dealers or the Schwacke List, helps to determine the value

Legal Support: In case of doubt, it is recommended to seek help from a lawyer, as he knows the legal situation and will help you determine the correct residual value of your vehicle if you are not satisfied with the offer

Avoid typical mistakes

Precipitated sale of the vehicle: The time after an accident can be stressful, which is why you want to get it over with as soon as possible. However, you should take time to carefully review the offers and seek legal support if you have any questions.

Inaccurate documentation: So that there are no disputes with the insurance company later on, it is important that everything is really recorded by an expert. Every detail, no matter how small, must be documented so that no doubts can arise.

Bad communication: Communication with liability insurance or comprehensive insurance is of paramount importance. Every interaction should be recorded in writing.