What Should I Do With My Totaled Car?

what-should-I-do-with-my-totaled-car

Across the United States every year, nearly 6 million car accidents happen that are reported. An estimated 10 million more collisions happen that go unclaimed through authorities and insurance agencies. Of those estimated 16 million vehicle accidents every year, there’s an increasing number of totaled cars, but what happens to them? And if your car is totaled, what should you do with it?

What's My Car’s Value

What is a Totaled Car?

If you get in an accident or your vehicle is otherwise damaged extensively, beyond the ability or reasonable cost to repair it, it’s branded as a total loss car by your insurance agency — that is, if the damage is reported.

When a car is labeled as a total loss, it means it’s no longer roadworthy. It can’t be insured or registered for use on the road. In most cases, your car will end up in a scrapyard and disassembled. The parts that can be reused are then sold by the scrapyard. In a select few instances, a totalled car is bought to use for educational purposes or by someone who intends to rebuild the car.

If a vehicle is purchased by someone who wants to put it back into use, the totaled car will need to go through strenuous repairs and inspections. The time and money necessary to repair a totaled car can outweigh its value, which is why it was declared a total loss in the first place.

When is a Car Totaled?

totaled car

Insurance companies have the formula to determine when totaling a car. It varies from insurer to insurer, as well as from vehicle to vehicle. If you don’t know the formula your insurance company uses, there’s no cause for concern; that information it’s usually kept secret.

For most insurance companies, a total loss car has damage that equals approximately 70 to 75 percent of its resale value. A vehicle worth around $10,000 is typically a total loss when the cost of repairs is $7,000 to $7,500. It doesn’t have to be just physical damage either – the cost of a rental car and other factors come into play as well.

What is My Totaled Car Worth?

That means your totalled car is worth about 25 to 30 percent of its undamaged resale value, right? Well, not always. A totaled car value can be much lower if the damage is extensive or it can be much higher… to the right person.

The actual value of your totaled car may be hard to determine. Newer vehicles can command a higher value because they are sought after. And, if time and rental costs are not factored into the equation, a total loss car could be worth more than you’d expect.

I Still Owe Money on My Car – What Happens Now?

Totaled_Car_Value_4Especially when you drive a newer model, there’s a good chance you’re still making car payments. Don’t worry, it’s a situation many people encounter after an accident. Here’s what you do:

  • While your insurance claim is in process, it’s important to continue making your payments on time.
  • When your car has been deemed a total loss, you’ll come to terms with your insurance provider on its value.
  • Your insurance company will pay out any lienholders first, then you receive the balance of the payout.
  • If your car loan exceeds the payout, you’ll need to continue making the payments until your car loan is complete.

If you find yourself in a situation where you still owe money after your insurance claim is paid out, it’s called negative equity. You have options to deal with this: you can get a personal loan to pay it off, or, in some cases, you can roll your negative equity into your next car loan. If that’s the case for you, be sure to buy GAP insurance!

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Totaling a Car – What Should I Do With It?

If your car is totaled, you have a few options you can pursue.

First, you can settle on a price with your insurance company, receive a payout, and buy a different vehicle. Your hands are washed of your total loss car.

Or, if you want to keep your car – maybe it’s a sentimental reason or you can’t afford the penalties on your insurance premiums – you can forego the insurance claim altogether. You can pay for the repairs out of pocket, and keep your car. The downside is that you likely don’t have the cash on hand to pay for the repairs, especially because you’re likely still making car payments at the same time!

Can I Get Money from Insurance AND Keep My Totaled Car?

Totaled_Car_Value_9YES, that’s the best way to go about it. You may not know it yet, but you can ‘buy back’ your totalled car, then sell it to us instead. Here’s how it works:

  • Settle on a price with your insurance company for your total loss.
  • Determine the value of your total loss with your insurance company.
  • Receive the value of your car minus the total loss value.
  • You get your vehicle back plus cash.
  • Sell your total loss to us!

At DamagedCars, we want your total loss car! We’ll help you get the most value for your vehicle even if it can’t be repaired. Request a guaranteed quote from us. We’ll pick up your damaged car free of charge and put money in your pocket on the spot. It’s quick and easy. We’re your best solution to get the most from your totalled car.

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