Traffic accidents not only cause physical damage to vehicles but also result in economic losses for vehicle owners and other involved parties. One such loss is vehicle depreciation. Vehicle depreciation refers to the reduction in the market value of a vehicle after it has been damaged in a traffic accident, even after it has been repaired. This type of depreciation represents a financial loss for the vehicle owner and can be compensated through legal processes. Understanding how vehicle depreciation is evaluated from a legal perspective, how it is calculated, how compensation claims are made, and the relevant legislation is crucial for vehicle owners and lawyers to effectively defend their rights.

1. What is Vehicle Depreciation?

Vehicle depreciation, in simple terms, is the reduction in the resale value of a vehicle after it has been involved in a traffic accident, even after it has been repaired. In other words, a vehicle that had a specific value before the accident will have a lower market value after the accident, even if it is physically repaired. This issue becomes particularly important when selling vehicles with an accident history, as potential buyers tend to view these vehicles as having diminished value.

Accident history records affect the resale value of a vehicle. A vehicle that has been involved in an accident is generally labeled as "damaged," thus lowering its value in the second-hand market. This loss represents the financial damage suffered by the vehicle owner and is legally compensable.

In various rulings by the Court of Cassation (Yargıtay), vehicle depreciation is defined as the drop in the vehicle's value after the accident, even after repairs. In its 2016/5175 ruling, the Court of Cassation emphasized that the depreciation should be calculated based on the nature of the accident, the vehicle’s model, and other factors. Such compensations are an essential legal mechanism to cover the material losses suffered by the vehicle owner.

2. How is Vehicle Depreciation Calculated?

Vehicle depreciation is generally calculated by expert assessors. Since each vehicle and accident situation is different, the method of calculation varies accordingly. However, the following factors are typically considered in calculating depreciation:

• Make and Model of the Vehicle: The brand, model, and production year of the vehicle play an important role in depreciation calculation. For example, luxury cars or high-performance vehicles typically experience more depreciation than other vehicles. This is because these vehicles have higher market values, and even after repairs, they cannot return to their original value.
• Age and Mileage of the Vehicle: Newer and lower-mileage vehicles typically experience less depreciation. This is because newer vehicles usually experience less value loss after an accident, whereas older and higher-mileage vehicles may suffer greater depreciation. The older the vehicle, the more apparent the depreciation becomes.
• Type and Severity of Damage: The severity of the damage directly impacts the vehicle's depreciation. If critical components such as the engine, chassis, or transmission are damaged, the vehicle may not return to its original value after repairs. Additionally, both internal and external damages may be calculated separately. For example, internal damage, although not visible, can still reduce the vehicle's value.
• Repairability and Quality of Repair: The professional quality of the repairs also affects depreciation. A well-repaired vehicle may recover some of its market value, while poor repairs can further increase depreciation. Moreover, certain vehicles, even after repair, may experience depreciation due to the loss of original parts in certain areas.
• Market Conditions and Demand: Another factor affecting depreciation is the second-hand market. For example, if there is high demand for a particular vehicle model, the depreciation may be less even if it has been involved in an accident. However, if demand for that model is low, the accident history may significantly decrease the vehicle's market value.

These factors are considered together to determine the depreciation amount, often through an expert's report. The expert evaluates the vehicle's current condition and market conditions to calculate the difference between the vehicle's market value before and after the accident.

3. How to File a Vehicle Depreciation Claim?

To claim vehicle depreciation, specific legal procedures must be followed. The application process may vary depending on the nature of the accident and the damages. Below are the general steps to be followed for a depreciation claim:

• Report the Accident: When a traffic accident occurs, the first step is to report it to the traffic insurance company. It is important to officially record the accident with an accident report. During the application to the insurance company, details about the vehicle’s repair duration and the extent of the damage must be provided.
• Request an Expert Report: To determine depreciation, an expert report must be requested by the vehicle owner or the insurance company. The expert examines the vehicle and calculates the depreciation amount. This expert report is the key document used in court or in discussions with the insurance company.
• Apply to the Insurance Company: A written application must be submitted to the insurance company to claim vehicle depreciation. After reviewing the application, the insurance company may either approve the claim or deny payment. If the insurance company rejects the depreciation claim, the vehicle owner can apply for mediation.
• Mediation and Arbitration Panel: If there is a dispute with the insurance company, a mediation application can be made. Mediation is a process aimed at resolving the conflict between the parties. If mediation fails, an application can be made to the Insurance Arbitration Commission.
• Filing a Lawsuit: In case of a dispute with the insurance company or other parties, legal proceedings are initiated. The vehicle owner can file a lawsuit in the Civil Court of First Instance, where the court will consider expert reports and make a decision.

4. Statute of Limitations for Vehicle Depreciation Claims

According to the Turkish Code of Obligations, there is a time limitation for making depreciation claims. Claims must be filed within 2 years from the date the loss is discovered. However, claims can be made up to 10 years from the date the accident occurred. After these periods, the compensation claim becomes time-barred, and the claim may be rejected.

5. Traffic Insurance Application and Legal Process

With the amendment made to the Road Traffic Law on April 14, 2016, it became mandatory for the injured party in a traffic accident to apply to the insurance company. This application is the first step before making a compensation claim. The insurance company is obligated to provide a written response within 15 days from the date of the application.

6. Insurance Company Application Process

After a traffic accident, the vehicle owners or victims must first apply to the insurance company for compensation. The written application to the insurance company officially initiates the process. When applying, all relevant documents (accident report, damages, repair documents, expert report, etc.) must be submitted to the insurance company. Upon receiving the application, the insurance company is required to provide a written response within 15 business days.

If the insurance company responds late or the response does not meet the victim's expectations, the injured party can exercise their legal rights. At this point, the victim may file a lawsuit or apply to the Insurance Arbitration Commission. If the insurance company makes a payment that is lower than the actual depreciation amount claimed by the vehicle owner, the payment can be rejected, and the Arbitration Commission can be involved.

7. Application to the Insurance Arbitration Commission

The Insurance Arbitration Commission is a platform established to resolve disputes between insurance companies and policyholders. To apply to the Commission, an application must first be made to the insurance company. If the insurance company does not respond to the application within 15 days or refuses to make a payment, the injured party can apply to the Insurance Arbitration Commission.

If the insurance company makes a payment but the amount is less than the actual depreciation, the claimant may reject the payment. If the payment is rejected, the claimant can apply to the Insurance Arbitration Commission for the arbitration panel to reassess the compensation amount.

If the insurance company does not make any payment or refuses to make additional payments after the application, the claimant must apply to the Insurance Arbitration Commission.

8. Insurance Arbitration Commission Decisions and Objection Process

The decisions made by the Insurance Arbitration Commission vary depending on the dispute amount. These decisions have legal consequences depending on the limits:

• Disputes Up to 5,000 TL: Decisions made by the Insurance Arbitration Commission for disputes up to 5,000 TL are final. These decisions cannot be appealed, and they are applied directly.
• Disputes Between 5,000 TL and 40,000 TL: Decisions for such disputes can be temporarily suspended. The parties can file an objection within 10 days, and the objection is resolved within 2 months, resulting in a final decision.
• Disputes Above 40,000 TL: Decisions made by the Insurance Arbitration Commission for such disputes are subject to appeal. The parties may appeal the decision to the Court of Cassation, and the decision cannot be applied until it is finalized.

9. Enforcement of Insurance Arbitration Commission Decisions

The decisions made by the Insurance Arbitration Commission cannot be enforced until they are finalized, depending on the dispute amount and conditions. However, decisions for disputes below certain amounts can be enforced once they are final. If there is an objection process, the enforcement of the decision is temporarily halted until the process is complete.

To enforce the decision, a court order is necessary. If one of the parties does not comply with the decision, enforcement proceedings can be initiated under the Enforcement and Bankruptcy Law.

10. Conclusion

Vehicle owners must follow a specific series of legal processes to claim vehicle depreciation compensation arising from traffic accidents. Properly following the insurance application process, obtaining expert reports, applying to the Insurance Arbitration Commission, and managing court processes are essential. Ensuring that these processes are followed correctly helps safeguard the victim’s rights.

Insurance companies are obligated to provide fair compensation, and claimants must follow the correct legal procedures to defend their rights. Traffic accident damages can be compensated through a correct legal process, and victimization can be alleviated.