did your car crash? journal. Worse still is getting a call from your auto insurance company saying it’s a total loss and needs to go to the junkyard.
Your attachment to your vehicle may be sentimental. In some cases, your bond may be financial: You may not be able to replace the wrecked car with the money your insurance company is willing to pay. There are options: Learn more about what happens when your car is totaled and what to do if insurance wants to total your car but you want to keep it.
what does it mean when a car is wrecked?
Typically cars are totaled when damage exceeds 65% or 70% of the vehicle’s market value. Rick Ward, director of auto claims for MetLife Auto & Home, says the standard for deciding when a car is a total loss varies by company and may be set by state regulators. You can find out the threshold by contacting your insurance agent.
Car insurance companies find that many older cars are simply not worth repairing.
“We determine the value of your car through market research,” Ward explains. “There are three software providers that provide vehicle valuations, blue book averages, and what prices cars are selling for in your area through dealer networks.” but this software is not available to consumers.
If you can demonstrate good maintenance and mechanical upgrades, you may be able to win a reprieve for your wrecked car. its age and mileage will be key factors.
what happens when the insurance totals your car?
obviously not the best news, especially if you really like the vehicle. In general, this is the process of what happens when you total your car:
The insurer will calculate the actual cash value (ACV) of the car. ACV is how much your vehicle is worth after taking depreciation into account. On average, vehicles depreciate more than 20% in the first year and about 10% each additional year for the first five years, according to erie insurance reports using carfax data.
After that, the insurance company will calculate an estimate of the market value of the car, based on the make, model and year, mileage and condition, as well as the demand in your area for the type of vehicle you has.
Another factor used to estimate car value is the resale value of parts and metal.
if the cost of the repairs plus the scrap value equals or exceeds your car’s acv before the accident, then add it up.
what if the insurance wants to total my car but I want to keep it?
If you decide to accept the insurer’s decision to total your car but still want to keep it, your insurer will pay you the cash value of the vehicle, less any deductible due and the amount you could have sold your car for at a junkyard. . then it will be up to you to make arrangements to make the repairs.
“they’ll give you a check,” ward says, and then you’ll be on your own.
If my car is totaled, can I still drive it?
not immediately. In order to safely operate a totaled car, you will need to do major repairs. And remember, safety should be your number one concern when keeping a car totaled.
If the damage to the wrecked vehicle is primarily cosmetic, you may be able to repair it and drive it again for a small fee. however, if fixing the car means reaching into your pockets, you might as well let it go.
There’s a good reason auto insurance companies are cautious about fixing badly damaged cars, says Ward. “Cars are complicated. all damage is not visible. once you start dismantling, you often find additional damage.”
You think twice before repairing and driving a car that has suffered serious damage. If the professionals who work for your auto insurance company think the car can’t be repaired for a reasonable cost, it probably is. damage, such as cracks in frames or airbags, often can’t be seen just by looking at a vehicle.
what to do when your car is totaled and you still owe money
If your vehicle is totaled and you still owe money on the loan, the insurer will reimburse your lender for the value of the car, that is, the actual cash value of the car, and you will have to pay the remaining balance if the money paid by the insurance company is less than the loan amount.
If you have gap insurance, it will make up the difference between what the vehicle is worth and what’s left on your loan. Otherwise, you’ll have to keep making out-of-pocket payments until the loan amount due is zero.
find auto insurance for a totaled vehicle
ward says you may run into trouble when shopping for auto insurance on a car that has been totaled. Her ability to purchase collision and comprehensive coverage may be affected.
“That really depends on each individual company,” he says. Before you decide to fix your car, check to see if that’s a problem.” some insurers won’t accept a car with “a brand title,” she adds. “basically it puts a stamp on it that says it’s a salvaged vehicle.”
ward notes that the federal government has established a database called the National Motor Vehicle Title Information System to provide information to car buyers. “All total losses are recorded by insurance companies. what this does is provide consumers with a database to see if a car has been previously salvaged.” That means don’t count on being able to unload your vehicle on a buyer.
Is it worth repairing a wrecked car?
Only you can decide if your wrecked car is worth repairing. however, you should consider the cost of repairing a car and whether or not it is safe to drive.
in a nutshell
When a car is totaled, it means the damage to the vehicle is so severe that it would cost more than the car is worth to repair. This can be devastating to a car owner, especially if the vehicle is new or has sentimental value. however, he can still keep his totaled car if he is willing to work. Be sure to consider the cost of repairing your wrecked vehicle before you decide to keep it.