New car damaged in an accident: will the insurer pay for a more expensive replacement?

Before ordering: assess vehicle value and interim transport separately

Our practical recommendation: before committing to a replacement purchase, establish which vehicle is economically equivalent and how you will remain mobile until delivery. Comparing total costs can support negotiations with the insurer. It does not replace an agreement to cover a higher purchase price. Keep written records of offers, delivery dates and the insurer’s response.

Why the buyer could not recover EUR 8,650

A few days before the accident in September 2022, the claimant had bought a Tesla Model Y Long Range for EUR 58,920. After it suffered substantial damage, he bought a Model Y Performance two days later for EUR 67,570. The insurer settled on the basis of the damaged vehicle’s price. The claimant sought the additional EUR 8,650 (BGH, paragraphs 1 to 3 and 5).

According to the claimant, only the more expensive model was immediately available. The corresponding Long Range would not have been deliverable until December 2022 or January 2023. That account of delivery times could be assumed true without establishing the claim. Following the two lower courts, the BGH also dismissed his appeal. No additional payment was awarded (operative part; paragraphs 3, 4, 8 and 11).

Compensation on a new-car basis has specific requirements

Section 249(2), sentence 1 of the German Civil Code limits monetary compensation to the amount required to remedy the damage. For the special calculation on a new-car basis, the BGH identifies a factory-new vehicle with no more than 1,000 kilometres on the clock, substantial damage and the actual purchase of an equivalent replacement vehicle. Low mileage alone is insufficient. Nor does the decision permit payment of a new-car price without the corresponding replacement purchase (paragraphs 12, 14 and 24).

Buying a higher-value new car does not automatically rule out every possibility of compensation on a new-car basis. It does not, however, establish a right to reimbursement of the full higher purchase price. The dispute concerned German damages law and the claim against the other side in the accident. A new-car replacement clause in the owner’s own comprehensive insurance was not at issue (paragraphs 1 to 6 and 11).

Personal preferences do not make the more expensive car equivalent

The claimant cared particularly about range. In his view, the Performance model was worse because it had more power but less range. The BGH instead applied an objective economic assessment. The market price reflects the vehicle’s characteristics as a whole. A buyer’s lack of interest in additional power does not eliminate an existing increase in value (paragraphs 16 to 20).

In this case, the appeal court was entitled to treat the approximately 15 per cent higher price as reflecting the higher value. That is not a general percentage threshold. The particular vehicles and their objective values remain decisive. Judicial estimation of damages is governed by section 287 of the German Code of Civil Procedure (paragraphs 13 and 19).

Long delivery times: interim transport, not a freely disposable purchase budget

The BGH held that an equivalent replacement need not always be available immediately. Hire-car costs, costs of an interim vehicle or compensation for loss of use may in principle cover the intervening period. This does not mean automatic reimbursement for every day of a wait lasting months. The duty to mitigate loss under section 254(2) of the German Civil Code may specifically require an interim vehicle; the requirements and duration need separate assessment (paragraphs 22 and 26).

A calculation based on actual expenditure depends on the measures actually taken. Hypothetical costs that another solution might have caused cannot simply be added to the purchase budget. The BGH acknowledged that buying the more expensive car immediately might have made economic sense overall. But the other side must agree to such a different settlement (paragraphs 24 to 27).

Documents to gather before buying a replacement

Our own simplified example: an equivalent model costs EUR 40,000 but has a delivery delay, while a higher-value model available immediately costs EUR 44,000. Expected interim transport costs of EUR 5,000 do not create an automatic right to the extra price. The calculation may support a proposed settlement. Whether the other side agrees and which costs are recoverable under the solution actually used still need to be established. These amounts are not court-set rates.

• Keep the purchase contract, registration details, mileage and damage assessment for the accident vehicle.
• Set out a clear comparison of both vehicles’ equipment and market values.
• Retain specific offers and dated written delivery information.
• Document your transport needs and suitable interim arrangements, including their costs.
• Obtain explicit agreement before purchase if you want the cost of a higher-value model covered.