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The value of a classic car
In the past, a whole range of expressions that attempted to designate the value of a classic car did the rounds. The different interpretations led time and again to uncertainties, confusion, and disputes. This situation motivated a forum of experts from the insurance sector and Classic Data to seek a uniform and clear definition in the summer of 1992.
Market value
The market value indicates the current value of the vehicle on the market, i.e.
at the current point in time the amount estimated as the market value would be paid for this vehicle on purchase or sale. As a rule, this is the average price on the private market and is thus neutral with regard to sales tax and is to be viewed as the final price.
In the case of car models that are traded more rarely and vehicles that are mainly sold commercially, retail (as net amount), the results of international auctions (without sales tax) as well as the international market situation are included in the market value. The market value is the basis of the insurance classification (full insurance cover) with special classic car rates. It is regarded as a charge (fixed price) as defined [German] insurance legislation. The market value is neutral as regards sales tax.
Replacement value
The replacement value is a variable from the laws governing liability (German Civil Code).
It is based on the sum the claimant has to pay in the event of an accident to procure a similar replacement vehicle of the same value.
Here, the replacement value is to be measured at the moment of an accident on the basis of the free market.
Here, any restoration costs or expenses that might have been incurred are not the decisive factor, rather only the amount that must be paid for the vehicle - also taking account of reputable commercial retailers (incl. sales tax). The specified replacement value (from a liability perspective) takes account of a short-term replacement procurement. In particular, the replacement value is the basis for handling a third-party liability claim.
Restoration value
The restoration value indicates the price paid the vehicle to get the vehicle to its current condition (restoration costs), plus the base vehicle price (acquisition value). The visible or provable investments in restoration result in the difference in relation to the normal market value.
The restoration value is important if a complex and laborious restoration has to be proven. However, the price does not reflect the market situation, conditional on the fact that experience has shown that the expenses involved can only be recovered in rare cases. It is only in the case of a renewed acquisition of absolutely identical value in identical condition (i.e. without interim use) that the specified restoration value would apply.
Source: Classic Data
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