Depreciation

Definition

Depreciation relates to the wear and tear of vehicle parts based on the average life expectancy of that part as determined by the manufacturer. The difference between the cost of a replacement part and the remaining value in the damaged part is referred to as depreciation.

Exemptions

Depreciation does not apply to replacement parts that are

recycled
refurbished
exchanged, or
rebuilt.

Depreciation should not be applied to power train components

if the vehicle is still under factory warranty
with ICBC endorsement policies, including
- Limited Depreciation Endorsement (APV297A)
- Replacement Cost Endorsement, (APV286A), or
- New Vehicle Replacement Plus, or
where recycled parts are used.

Note: Factory warranty and endorsements policies must be validated by ICBC.

Threshold

The threshold for depreciation determines when depreciation applies or does not apply.

If the total depreciation dollar amount on a claim is ...	Then ...
less than $100, before taxes	depreciation does not apply.
more than $100, before taxes	the customer is responsible for the full amount.

The collision repair program participant must resubmit the revised estimate to ICBC for reassessment of the total depreciation, if additional parts are added during a supplement.

Note: The depreciation amount is calculated on the final estimate submitted for payment.

Depreciation on aftermarket or re-manufactured parts

When replacing an Original Equipment Manufacturer (OEM) part with an aftermarket or re-manufactured part, if a lower priced part of similar kind and quality is used, common sense and good judgement can apply to determining depreciation, matching the depreciated cost of the OEM part, if necessary. This includes vinyl and convertible tops.

If the identical make and model of electronic equipment is available, no depreciation is applied.

Items where depreciation is applicable

Depreciation on major mechanical components

is based on the condition of that component
applies
- only if there are obvious signs of wear or deterioration, and
- on parts, and
is applied to all replacement parts with a measured life expectancy.

Abusive wear or extraordinary care and maintenance must be considered, and betterment should be applied at the ICBC estimator's discretion. Depreciation is applied to the replacement cost of parts before taxes. Depreciation is not applied to labour.

Important: This does not apply to commercial vehicles.

Vehicle component	Betterment	Percentage of depreciation
Interior electrical components (excluding stereos)	No depreciation	N/A
Aftermarket sound and communication equipment	0-23 months	0%
	2-6 years	10% per year
	6+ years	80% maximum
Batteries	0-23 months	0%
	2-6 years	20% per year
	6+ years	90% maximum
Major mechanical components, including engine assemblies, both long and short blocks transmission assemblies differentials turbochargers superchargers, and related powertrain components	0-100,000 kms	N/A
	100,001-150,000 kms	10%
	150,001-200,000 kms	20%
	200,001-250,000 kms	30%
	250,001-300,000 kms	40%
	300,001 kms and over	10% for each additional 50,000 km to a maximum of 80%
Other mechanical components, including radiators condensers exhaust components alternators starters, and related components	0-100,000 kms	0%
	100,001-200,000 kms	5%
	200,001-300,000 kms	10%
	300,001-400,000 kms	15%
	400,001 kms and over	5% for each additional 100,000 kms up to a 50%
Suspension components, including struts shocks ball joints tie rod ends steering racks drag links strut bushings hub and bearing assemblies, and other depreciable items.	0-80,000 kms	N/A
	80,001-100,000 kms	10%
	100,001-125.000 kms	20%
	125,001-150,000 kms	30%
	150,001-175,000 kms	40%
	175,001-200,000 kms	50%
	200,001 kms and over	60%
Vinyl and convertible tops	0-4 years	0%
	5-8 years	25%
	8-12 years	50%
	12+ years	To a maximum of 80%
Complete repaints	Estimator discretion, based on condition. Note: Depreciation on complete paint jobs includes the cost of paint and labour operations, such as the remove and re-installation of parts required during the painting process.	Up to a maximum of 80%
Tires	Measured remaining tread on tire being replaced	Pro rate according to original tread depth