Is the Vehicle Purchase Tax Compensated for a Total Loss New Car?
3 Answers
It depends. According to relevant laws such as the "Tort Liability Law of the People's Republic of China," if a new car is involved in a traffic accident where the owner is not at fault, and the vehicle damage is extremely severe—with the loss amount approaching or even exceeding the insured value of the vehicle—the owner can actually apply for compensation for the vehicle purchase tax and additional vehicle accessories, as these constitute the owner's actual losses. Additional Information: The compensation amount from the insurance company generally does not exceed the insured value of the vehicle. However, legally, there is no such stipulation (this restriction only applies to the at-fault party's vehicle damage insurance). Therefore, if the loss is particularly significant, the not-at-fault owner can apply for an appraisal. If the appraised amount exceeds the sum of the insured amount and the vehicle purchase tax, the owner can file a lawsuit to claim all loss expenses, including the vehicle purchase tax and additional vehicle accessories.
Last month, my friend's brand-new car was involved in an accident and declared a total loss. He thought the insurance would cover all costs, including the vehicle purchase tax, but the insurance company only compensated for the car's depreciated value, excluding the tax portion entirely. He felt really frustrated because the purchase tax was a significant amount of money, and it felt like a total waste. Let me share with you why this happens. The purchase tax is paid in full to the government when buying the car and isn't considered part of the vehicle's intrinsic value. Insurance payouts are typically based on the car's current market value or the agreed contract value, so this tax is usually not included. If you encounter a similar issue, I recommend checking your insurance policy details immediately to see if there are any special clauses. Before buying a car, you might also opt for an additional coverage that includes tax compensation—though rare, it can save you some hassle. Dealing with the aftermath of a total loss also involves handling the scrapping procedures, which can be endless. It's always better to prevent such issues in advance.
In terms of insurance claims, in the case of a total loss of a new car, the purchase tax is generally not fully recoverable, as the insurance compensation calculation is based on the vehicle's residual value or the agreed amount at the time of insurance. The purchase tax is considered a separate expense of car purchase and not part of the vehicle's asset. From the numerous cases I've observed, most people find the tax portion deducted after receiving the compensation, unless the owner has purchased a specially customized insurance plan. It is recommended to discuss directly with the insurance advisor when purchasing insurance to clarify the compensation scope in the contract. Regular car maintenance can prevent accidents and save a lot of trouble. In case of an accident, it's best to coordinate with the insurance company and tax authorities as soon as possible.
