If you’ve been in a car accident and your vehicle was damaged, there’s a chance that your insurance company will declare it a total loss. Usually, you’ll receive a payout based on the car’s estimated value, which the insurer determines. However, if you’re uninsured or want to buy back the vehicle to potentially resell it, you might want to determine the value of your totaled car yourself. If so, here’s what you need to know.
When Is a Car Totaled?
When an auto insurance company declares a vehicle totaled – or a total loss – that doesn’t mean it doesn’t have any value. Instead, a car is totaled when the cost to repair the existing damage exceeds how much the vehicle was worth in the current market in its pre-accident state. When that occurs, it costs the insurer less money to simply compensate you based on the car’s pre-accident value than to repair the damage.
As a result, a totaled car isn’t necessarily damaged to the point of being unrestorable. Many totaled cars could be fixed and returned to the road. It just doesn’t make financial sense to the insurer to go that route.
Determining the Value of Your Totaled Car
Use a Totaled Car Value Calculator
Usually, the easiest way to estimate the value of a totaled vehicle is to use a totaled car value calculator. You might find calculators explicitly designed for totaled vehicles online, or you can use traditional car value calculators to get a general idea.
The information you need to provide to the calculator is typically straightforward. You’ll need to input the make, model, and model year of the car, as well as its current mileage. Details about its features and equipment are often necessary, as well as the location of the vehicle (or the zip code associated with where you’d potentially sell it) and it’s color.
With the totaled car value calculators, be wary of those offered by companies that buy cars in any condition. The price you’re presented with is usually based on what that business is willing to pay for your vehicle. Since their goal is usually to resell the car – either in whole or by parting it out – to make a profit, the value they assign may be lower than fair market.
With traditional car value estimators, you’ll need a calculator that lets you set the vehicle’s condition as fair or poor. Which of those options is best for your situation depends on the extent of the damage. If you’re not sure where to begin, the Kelley Blue Book What’s My Car Worth tool is a solid place to start, as it will guide you through selecting the right condition.
Check Out Your Local Vehicle Market
While it may seem like the simplest way to gauge the value of your totaled car is to attempt to sell it, that isn’t an option immediately. Totaled vehicles typically need a salvage certificate issued by the Department of Motor Vehicles before they’re eligible for resale. As a result, you can’t merely see what potential buyers are willing to pay, as most won’t offer anything without the salvage certificate.
If you work with your insurer and choose to keep your car, the insurance company may handle the reporting of a totaled vehicle for you. If you’re not working with an insurer, then you typically need to tackle those steps yourself.
However, you can get insights into the value of your totaled car by looking at prices for vehicles like yours in similar condition – including being classified as a salvage vehicle – in your area. Typically, this process works best if you’re in or near a larger city, as there may be more cars available for a comparison.
You can also contact local dealerships that purchase salvage vehicles. While dealerships typically pay less than private parties, the selling process is often simpler. As a result, putting out some feelers if you’re willing to go through the steps required for a salvage certificate is worth considering if you’re trying to determine the car’s value in its current state.
Explore Your Local Parts Market
When it comes to the vehicle market, the sum of the whole is potentially worth less than the value of its parts. Essentially, depending on your make, model, year, and other details about the car, you might earn more by selling it for parts.
Usually, you’ll want to connect with local salvage yards to find out the value of your vehicle for this purpose. If specific parts are in-demand, they may offer more for your car than you’d get by selling the vehicle to a private party or dealer.
The sale process is also reasonably simple if you go this route, suggesting you have a salvage certificate. Plus, if there are local laws in your area about selling unsafe vehicles, even if you have a salvage certificate, this option allows you to avoid violating the rules or any form of liability.
Have you ever had to figure out the value of a totaled car? If so, do you have any other tips that can help someone calculate the value of their totaled car? Share your thoughts in the comments below.
- How To Recover Finances After Getting into a Motor Vehicle Accident
- How to Get a Vehicle Loan: Tips for the Credit-Challenged Car Buyer
- Can You Turn a Profit by Flipping a Salvage Nissan 350Z Bought at an Online Auction?
Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.