Replacement Value of Construction Machinery

Replacement Value – Definition

The replacement value of a construction machine refers to the costs incurred to acquire a machine of equal quality on an assessment date. It is important not to confuse replacement value with market value (occasionally also referred to as current value) of a machine. The market value of the machine is determined by considering factors such as the age of the machine, maintenance condition, duration of use, and current market demand: Market value is therefore the price you would receive when selling the machine on the assessment date – whereas replacement value is the amount you would need to pay to acquire an equivalent machine on the assessment date. The difference between selling price and purchase price is therefore also the difference between market value and replacement value.

Calculation of the Replacement Value of Construction Machinery

In the Construction Equipment List (BGL) 2020, you will find the average new values of the most common machine manufacturers. These are averages of list prices including so-called acquisition costs (freight, packaging, customs), but excluding sales tax or VAT. Such an average new value refers to a fully equipped and operational device without fuel and without spare parts.

The average new values in the BGL 2020 are based on the 2020 price basis. However, the acquisition costs of machines change over time. You must take this into account when calculating the average new value for replacement in a given year X. In addition to the average new value from the BGL 2020, you will need the producer price index "Machines for the construction industry" from the German Federal Statistical Office (Statistisches Bundesamt) for year X (the producer price index is published by the German Federal Statistical Office under subject series 17, series 2; online at: https://www.destatis.de/DE/Service/Bibliothek/_publikationen-fachserienliste-17.html). For example:

Average new value for replacement in 2021 = average new value from BGL 2020 multiplied by the producer price index for construction machinery in 2021. The result is then divided by 100.

It is important to select the producer price index that is based on the 2020 price basis (just like the BGL 2020) (for the year 2020, this producer price index must have the value 100). If the producer price index does not have the value 100 for the year 2020, a corresponding conversion table must be used.

If the market value (for the difference, see above in this article) is to be calculated instead of the replacement value, factors such as the age of the machine, maintenance condition, duration of use, and current market demand also play a role in addition to the replacement value.

Renting Construction Machinery from klarx – How Am I Insured?

If no liability limitation is agreed, the renter is liable for any damage to the rental equipment (regardless of whether caused by the renter or by third parties) and for loss or theft during the rental period. In this case, the renter is obligated to insure the equipment for the duration of the rental period against all types of damage, insofar as insurable, in favor of the lessor and to submit the insurance company's confirmation of coverage to the lessor before the start of the rental.

When you rent machinery from klarx, you will receive a liability limitation from us without exception that insures you against damage to the rental equipment. In the event that you already have one yourself, we ask you to provide proof.

Further information can be found in our Terms and Conditions.