Is There a Depreciation Fee for Rear-End Collisions?
3 Answers
After your car is rear-ended and the other party is fully at fault, there is no legal provision for depreciation fees, but you can negotiate with the other party regarding the depreciation fee. Here is relevant information about vehicle depreciation fees: 1. Definition of Vehicle Depreciation Fee: Vehicle depreciation fee is the financial representation of vehicle investment recovery. It involves setting aside a certain amount of funds each year to update vehicles and maintain transportation reproduction. Vehicle depreciation fees do not reflect the national economy's investment in transportation vehicles; what effectively reflects the economic price of vehicle depreciation is the vehicle's capital recovery cost. 2. Regulations on Depreciation Period: According to tax laws, passenger cars have a depreciation period of 5 years with a residual value rate of 5%. Even for used cars, the depreciation period is calculated as 5 years from the date of purchase. Tax laws stipulate the following minimum depreciation periods for fixed assets: 20 years for houses and buildings; 10 years for trains, ships, machinery, and other production equipment; and 5 years for electronic equipment, transportation tools other than trains and ships, and tools, furniture, etc., related to production and operation, with a unified residual value ratio of 5% of the original price. The higher the depreciation rate, the worse the vehicle's condition and the lower its residual value.
From my personal experience with driving, you can claim depreciation costs after your car is rear-ended, but it requires legal action. For example, last year my car was rear-ended on the highway. The repairs cost 30,000 RMB, but when I tried to sell it afterward, the price was 50,000 RMB lower than before the accident. This loss is the depreciation cost. In China, courts sometimes support compensation for this, but you need to provide a professional assessment proving the vehicle's value has decreased. I recommend getting a vehicle depreciation assessment report after an accident, stamped by a certified institution, and then using this evidence to sue the other driver's insurance. Typically, insurance only covers repair costs, not depreciation, so pursuing additional compensation requires going through the legal process. The whole procedure might take several months, but it's worth it, especially for newer, high-value cars. Don’t rush—keep all receipts and photos safe.
I deal with traffic accidents frequently, to put it bluntly, depreciation costs are basically not included in insurance claims. In standard auto insurance, the compensation scope covers repair costs plus miscellaneous expenses like towing fees. However, the depreciation of your vehicle after an accident is your personal loss. To recover it, you'll need to negotiate with the at-fault party or take legal action. I know of a case where the owner, after being rear-ended, kept detailed repair records and hired an appraisal company to prove the car's market value dropped from 150,000 to 100,000. The court eventually ruled that the other party compensate for the difference. A word of advice: don't rush to sign a settlement agreement after an accident—seek professional opinions first.
