New-for-Old Replacement Clause – Motor
The new-for-old replacement clause pays, in the event of total loss, destruction or theft of a new vehicle within a contractually defined period after first registration, the full new price instead of the lower replacement value.
- Clause type
- Extension
- Origin/Market
- DACH – statutory
- Favours
- Insured
- Negotiability
- Market standard
Standard wordings
- GDV AKB 2015 A.2.5.1 (New-for-Old Replacement)
Purpose
New vehicles lose value disproportionately immediately after first registration; the replacement value that motor own-damage cover ordinarily pays is often significantly below the original purchase price in the first few months. The new-for-old replacement clause closes this gap by paying, in the event of total loss, destruction or theft within an agreed period from first registration, the full new price, allowing the policyholder to acquire an equivalent new vehicle.
Effect and limits
The clause generally applies only to first owners and only within the contractually defined period, which depending on market and tariff ranges from six to twenty-four months, and in some cases up to sixty months; thereafter the ordinary replacement value applies again. Many wordings additionally require that the amount exceeding the replacement value is demonstrably used for repair or replacement purchase within a set period, to prevent windfall claims.
Negotiation and practice
Particular caution is needed for vehicles with a same-day first registration or a prior owner, since some tariffs then exclude or shorten the new-for-old benefit. For leased vehicles, the clause typically complements GAP cover: for as long as the new-for-old extension applies it usually covers the value gap more generously than the GAP clause, which only becomes economically relevant once it expires.