Diminished value of a vehicle refers to the concept of the decrease in its value on the second-hand market as a result of damage incurred due to a traffic accident and the subsequent repairs, maintenance, renovations, etc. Regardless of how well repaired a vehicle is after an accident, there is a decrease in its economic value.
In our legal system, there is no clear definition of the concept of diminished value. However, under the Compulsory Financial Liability Insurance for Motor Vehicles, the insurer shares the responsibilities of the vehicle owner at fault in the accident in a joint and several manner.
According to Article 1409 of the Turkish Commercial Code, in cases where diminished value occurs during a traffic accident, the party at fault is obliged to compensate for both the damage and loss caused by the accident, as well as the diminished value considered as direct damage. Additionally, according to Article 85 of the Road Traffic Law, if a motor vehicle causes someone's death, injury, or damage to property, the operator of the motor vehicle and the owner of the enterprise to which the vehicle belongs are jointly and severally liable for the resulting damage.
How is Diminished Value of a Vehicle Calculated?
The diminished value of a vehicle is determined by expert appraisers during judicial processes. There are many factors that influence the calculation of diminished value. These factors include:
Production year
Damage history and nature
Mileage
Brand and model information
Date of registration
Market value
According to Article 72 of the Code of Obligations, the period for compensating for the diminished value of a vehicle, or in other words, the statute of limitations for filing a lawsuit, is legally limited to two years. In addition, if the legal conditions are met, there is a maximum statute of limitations period of 10 years from the date of the accident. Therefore, if the parties do not file a lawsuit within 10 years of the accident, they lose all their rights regarding the matter. Another method of seeking compensation for diminished value is to apply to the Insurance Arbitration Commission.
To apply to the Insurance Arbitration Commission, there are certain application requirements and procedures. Firstly, the application to the relevant insurance company for the diminished value of the vehicle must not have been resolved or must have been inadequately resolved within 15 days. To make the application, the complainant must not have previously applied to the Consumer Problems Arbitration Board and must have declared their complaint to the insurance company in writing. If the application to the Insurance Arbitration Commission is successful, the mentioned insurance company is obliged to pay the damages. The most significant advantage of disputes being examined and evaluated by the Insurance Arbitration Commission is that the resolution is reached within a maximum of 4 months.
How Long Does it Take to Receive Compensation for Diminished Value of a Vehicle?
As mentioned, it is necessary to apply to the Insurance Arbitration Commission to collect compensation for diminished value. In such a case, applications are typically resolved within an average of 3-4 months.
Will Claiming Diminished Value of a Vehicle Have a Negative Impact on My Vehicle's Records?
Claiming diminished value of your vehicle resulting from a material damage traffic accident is not a cost covered by your own insurance. Therefore, claiming diminished value will not create a negative impact on the records of the person making the claim and their vehicle.
