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What does the 130 percent rule mean for car repairs after an accident?

In short

What does the 130 percent rule mean for car repairs after an accident in Germany? If someone else caused it, you may have your car repaired even if that costs up to 30 percent more than a comparable used car. Conditions: a complete, professional repair as the expert report says, and usually six months of further use. Above that limit, the other side pays only replacement value minus salvage value.

What does the 130 percent rule mean for car repairs after an accident?

What it costs

Figures calculated according to case law for a car with a replacement value of EUR 10,000 and a salvage value of EUR 3,000.

ExampleTypical range
Maximum repair cost including loss in valueEUR 13,000
Repair for EUR 12,000, professional, car kept for six monthsEUR 12,000 from the other side
Repair calculated at EUR 12,000, but not or only partly repairedEUR 7,000 from the other side
Repair for EUR 14,000, so above 130 percentEUR 7,000 from the other side, the rest yourself

The amounts are worked examples, a guide value from our quoting practice,

calculated according to the judgments listed.

In each case the expert report sets the actual values.

Worked example

Estate car, eight years old, rear-ended through no fault of the owner

The assessor calculates the repair just above the replacement value. The owner wants to keep the car.

Replacement valueEUR 8,000
Salvage valueEUR 2,500
Repair costs as per reportEUR 9,800, so 122.5 percent
130 percent limitEUR 10,400
Settlement without repairEUR 5,500

If she has it repaired fully as per the report and keeps driving it for at least six months, the other driver's liability insurer pays the EUR 9,800. If she sells it unrepaired instead, she receives EUR 5,500.

What is different if you come from abroad

If you are used to an insurer declaring your car a write-off and simply sending a cheque, Germany works differently when you are not at fault. The claim is against the other driver's liability insurer, and German courts give you, the injured party, a real choice: take the money or keep your own car and have it repaired, within limits.

The rule is not written in a statute. It comes from decisions of the Federal Court of Justice (Bundesgerichtshof, BGH). Insurers know these decisions well, so it helps to know the conditions before you decide.

How the limit is calculated

An independent assessor (Gutachter) sets three values: the repair costs, the replacement value, meaning the price of a comparable used car, and the salvage value of the damaged car. If the repair costs more than the replacement value, this is called an economic total loss (wirtschaftlicher Totalschaden).

The 130 percent rule is an exception. According to the BGH, you may keep and repair your familiar car as long as the repair costs at most 30 percent more than the replacement value. Case law also counts the reduction in market value (merkantile Wertminderung), the discount an accident car suffers when sold, into the comparison.

Repair costs compared with replacement valueWhat the other side pays
up to 100 percentrepair costs as per report or invoice
over 100 to 130 percent, repaired professionally and keptthe actual repair costs
over 100 to 130 percent, not or only partly repairedreplacement value minus salvage value
over 130 percentreplacement value minus salvage value

What the Federal Court of Justice requires

In its judgment of 15.02.2005 (VI ZR 70/04), the BGH decided that the extra of up to 30 percent is only available if the car is repaired professionally and to the extent the assessor based the calculation on. A partial repair that only makes the car roadworthy again is not enough.

Repairing it yourself is not ruled out, but the work must be professional and complete. If you leave damage to the frame that only a specialist garage can fix, you lose the extra. Then you only receive replacement value minus salvage value.

Six months of further use

The extra protects your interest in keeping this particular car. The BGH therefore requires that you usually keep using it for at least six months after the accident (judgment of 13.11.2007, VI ZR 89/07). This also applies if you claim with an invoice (judgment of 22.04.2008, VI ZR 237/07).

You do not have to wait for the money, though. According to the decision of 18.11.2008 (VI ZB 22/08), the claim is not only due after six months; the period only matters as evidence. If you sell the car earlier, you usually lack proof that you wanted to keep it, and then you are normally only owed replacement value minus salvage value. This matters if you plan to move back home soon.

What happens above 130 percent

If the repair costs exceed the limit, the BGH considers repair economically unreasonable in principle. The other side then pays only replacement value minus salvage value. You may still repair the car, but you pay the rest yourself.

A difficult case is when the report is above 130 percent but a garage can repair professionally below the limit, for example with used parts. The BGH did not settle this question conclusively in its judgment of 14.12.2010 (VI ZR 231/09). Get written confirmation from the insurer before the repair.

The rule does not apply to your own comprehensive cover

The 130 percent rule comes from the law on damages and only applies against the person who caused the accident. If you caused it yourself, your comprehensive cover (Vollkasko) pays according to its own terms.

Under the model terms, comprehensive cover pays at most the replacement value for a complete and professional repair with an invoice. Without that proof it pays at most replacement value minus salvage value, in both cases minus your deductible.

When the repair is not worth it

Honestly: for a car you wanted to sell soon anyway, the rule brings little. You commit to six months, and a repaired accident car sells for less.

It makes sense if you know your car well, it is in good condition and you want to drive it for years. Then you get your own car back instead of searching for someone else's used car with the payout.

Step by step

  1. Instruct an independent assessor if someone else is at fault.
  2. Look at repair costs, loss in value, replacement value and salvage value in the report.
  3. Check whether repair and loss in value together stay below 130 percent.
  4. Have the car repaired fully as per the report at a specialist garage and keep the invoice.
  5. Keep and use the car for at least six months.

Checklist

  • Expert report with all four values
  • Repair including loss in value at most 130 percent
  • Garage repairs fully to the extent of the report
  • Invoice and photos of the repair kept
  • No sale planned in the first six months, also not for a move abroad

Common mistakes

  • Doing only a makeshift repair and still claiming the extra
  • Selling the car shortly after the repair
  • Expecting the rule to apply under your own comprehensive cover
  • Repairing without the insurer's consent when the report is above 130 percent

Questions and answers

Frequently asked

Does the 130 percent rule apply if I caused the accident?

No.

It only applies against the other driver's liability insurer.

Your own comprehensive cover pays according to its terms,

under the model terms at most the replacement value.

Do I have to use a garage?

Not necessarily, but the repair must be complete and professional as described in the report.

An invoice from a specialist garage is the easiest proof.

Do I have to wait six months for the money?

No.

According to the BGH, the claim is not only due after six months.

The period only shows that you really wanted to keep the car.

What if I sell the car after three months, for example because I move abroad?

Then you usually lack proof that you wanted to keep the car,

and you are normally only owed replacement value minus salvage value.

An extra amount already paid can be reclaimed.

Does the loss in value count towards the limit?

Yes.

Case law compares repair costs plus reduced market value with the replacement value.

Can I get below the limit with used parts?

If the report is already above 130 percent, this is not conclusively settled.

Get written confirmation from the other side's insurer before the repair.

Sources

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