When a vehicle is involved in an accident, even after repairs its resale value usually falls. This loss is called “vehicle depreciation”. Having accurate, up-to-date information is your best asset when claiming your rights. Even if the vehicle is well repaired after an accident, owners often struggle to sell it for its pre-accident value. Compensation for depreciation is therefore crucial to cover this financial loss.
Methods for calculating vehicle depreciation compensation in 2025 are frequently updated. Factors such as vehicle age, mileage and market value all affect the compensation amount. There are also important legal details to watch for during the claims process. This article explains in detail how vehicle depreciation compensation is calculated and what to consider.
What Is Vehicle Depreciation?
Vehicle depreciation is the financial loss that occurs when a car, after being repaired following an accident, commands a lower price on the second-hand market than before the accident. In other words, a car recorded as damaged in accident databases generally sells for less than an identical car with no accident history. The difference in value is called “vehicle depreciation.”
If a driver is not at fault, they can seek compensation for the drop in their vehicle’s value from the at-fault party’s motor liability insurer. This right is protected by law. Depreciation compensation aims to remedy the financial harm suffered by the innocent party.
Who Is Eligible for Depreciation Compensation?
Depreciation compensation applies to certain vehicles and owners who meet specific conditions. A claim is likely to succeed only if the following are met:
- The vehicle was damaged in a traffic accident.
- The claimant was not at fault (or was not fully at fault) in the accident.
- The vehicle was insured at the time of the accident (usually covered by compulsory motor insurance).
- Repairs for accident damage were invoiced and performed by authorized service centers where possible.
- The accident is documented with official reports.
In short: an insured vehicle involved in an accident, owned by a not-at-fault or partly-not-at-fault party, can seek depreciation compensation. Fully at-fault drivers are not eligible.
What Criteria Are Considered When Calculating Vehicle Depreciation?
Key factors considered when calculating vehicle depreciation compensation include:
- Vehicle age: Newer vehicles typically suffer higher depreciation. Claims for vehicles older than about 10 years are often rejected.
- Mileage: Vehicles with lower mileage usually show a higher depreciation amount. High-mileage cars have reduced depreciation.
- Vehicle type and brand: Luxury and expensive models may suffer greater depreciation than economical cars.
- Extent of damage: The number of parts replaced, severity of damage and repair methods (original vs aftermarket parts) affect the calculation.
- Current market value: Free market conditions and comparable sale prices directly influence the compensation.
- Accident history: If the vehicle already had previous accidents, the additional depreciation after a new incident may be lower.
Insurance companies and courts use these factors when determining depreciation amounts.
2025 Updated Vehicle Depreciation Calculation Method
As of 2025, depreciation compensation is calculated using a formula defined by the Insurance Information and Monitoring Center (SBM). The formula includes the following main elements:
Main Formula:
Depreciation Amount = Vehicle Market Value x Depreciation Rate x Repair Coefficient
The depreciation rate is determined by the vehicle’s age, mileage and the type of damage.
The repair coefficient varies according to the number of replaced or repainted parts.
Example Calculation:
- A 3-year-old car with 50,000 km has a market value of 600,000 TL.
- Two parts were replaced and one part was repainted after the accident.
- Assume a depreciation rate of 6% and a repair coefficient of 0.8.
- Calculation: 600,000 × 0.06 × 0.8 = 28,800 TL — this would be the payable depreciation compensation.
Depreciation Tables:
SBM and insurance companies publish tables covering various combinations of age, mileage and damage. These publicly available tables are used to estimate likely compensation figures.
Important Note: The formulas and tables are updated annually, and accurate input of the vehicle’s real market value and correct repair details is essential.
How to Apply for Depreciation Compensation (2025 Guide)
The process for claiming depreciation compensation follows clear steps:
Application Steps
1- Actions Immediately After the Accident:
- An official traffic accident report must be prepared.
- Photograph the damaged vehicle and keep all service entry and exit documents.
- Have the damaged vehicle repaired with proper invoices, preferably at an authorized service center.
2- Apply to the Insurer:
- Submit a claim to the compulsory motor insurance online or in writing.
- Required documents: accident report, repair invoice, vehicle registration, ID copy and photos.
3- SBM Depreciation Claim System:
- By 2025 many insurers accept online applications.
- You can track the process through SBM’s claim tracking systems where available.
4- Insurance Company Evaluation:
- The file is reviewed and an authorized expert determines the depreciation amount.
- You will receive a compensation offer based on that evaluation.
5- Notification and Payment:
- Approved compensation is typically paid within one to two weeks.
- If there is a dispute, you may apply to the Insurance Arbitration Commission.
Importance of the Expert Report and Damage Assessment
An expert report is prepared by an impartial specialist and details the extent of damage, repair methods and the likely depreciation amount. This report is crucial when asserting your rights because it often determines whether your claim is approved.
When preparing an expert report, attention is paid to:
- Vehicle age and mileage,
- Which parts were repaired or replaced,
- Quality of repairs (original parts vs aftermarket),
- Previous accidents and total-loss status.
If you find errors or incorrect analysis in the expert report, you may object and request a new inspection.
When Can Depreciation Compensation Be Denied?
Depreciation compensation is not guaranteed after every accident. Common exceptions include:
- If you were at fault for the accident,
- If the vehicle is older than 10 years,
- If the vehicle’s mileage exceeds roughly 165,000 km,
- If the damaged parts belong to the vehicle’s mechanical or electrical systems (for example, the engine block),
- If the vehicle is classified as a total loss,
- If depreciation was already compensated for previous accidents,
- If the vehicle is used commercially as a taxi or rental car, many insurers may restrict claims.
Claims submitted without regard to these conditions are frequently rejected.
Depreciation Compensation Process at Insurance Companies
Application and payment procedures are broadly similar across insurers. The increased use of digital systems in 2025 has accelerated many parts of the process.
The process typically follows these steps:
- Application is received.
- Documents are checked.
- An expert performs a damage assessment.
- A compensation offer is made.
- If accepted, payment is completed.
If a dispute arises, the file can be referred to the arbitration commission.
Legal Basis for Depreciation Compensation
Vehicle depreciation compensation is based on traffic and commercial law provisions. These laws recognize the right of the injured party to be compensated for financial losses. As of 2025, the formulas and limits applied to depreciation calculations are set by insurers together with SBM.
Relevant legal references commonly cited include:
- Relevant articles in the Highway Traffic Law,
- Relevant provisions of the Turkish Commercial Code,
- General insurance conditions.
Frequently Asked Questions (FAQ)
1. Is depreciation compensation paid for every accident?
It is paid only when the other party is at fault, subject to insurance limits and the conditions described above.
2. How long do I have to apply?
You should apply within two years of the traffic accident. If the statute of limitations has expired, you cannot claim compensation.
3. Can depreciation be claimed for a total-loss vehicle?
No—total-loss (severe damage) vehicles are not eligible for depreciation compensation.
4. How can I contest an expert report?
If you disagree with the expert’s findings, you can request a new expert appointment or apply to the Insurance Arbitration Commission.
5. Can depreciation be pursued through arbitration or court?
Yes. If the insurer rejects the claim, you can pursue arbitration or bring the matter before civil courts.