Can you keep a totaled car?

by Guest » Thu Sep 06, 2007 06:18 am

When your car is beyond repair because of an accident or costs more than the Actual Cash Value (ACV) of the car, it is considered totaled. When a car is totaled, only the salvage value of the metal is considered when determining the value of the car.

How is a car determined to be totaled?

Whether a car is totaled or not can be defined by keeping in mind these 2 different perspectives:
  1. The Individual's point of view: For an individual a car is totaled if the damage is beyond repair or if the owner cannot afford to get the car repaired. This usually occurs when the owner has only the minimum amount of insurance.
  2. Insurance point of view: A car is 'totaled' if the cost of repairing the car exceeds the cost of replacing it. Insurance companies consider only a percentage of the current worth of the car, and it is important that individuals are aware of the percentage their insurance companies will consider. Normally the percentage insurance companies deem the car totaled ranges from 51% to 80% of its current market value.

Settlement procedure for a totaled car

An insurance adjuster inspects and photographs the damaged vehicle to determine the degree of damage and the cost of repairs compared with the value of the car in its current state.

If the cost to repair the car exceeds the percentage fixed by the company, it will make a settlement rather than get it repaired. This settlement will take into consideration a few other factors like:
  • The make of the car.
  • The model.
  • The condition of the car and the mileage it has.
If the cost to repair the car exceeds a certain percentage fixed by the company, it will make a settlement rather than get it repaired. This settlement again will take into consideration few other factors like:
  • Make of the car
  • Model
  • Condition of the car and the mileage it offers
  • Comparison with other similar vehicles in the same area
Essentially, the insurer is looking at the Blue Book value of your car. The settlement may include sales tax, title, and registration fees of the car if your state law requires it to.

How to keep your totaled car

Even if your car has been deemed 'totaled' you might want to keep it. In this case you have to convince the insurance company to let you keep the car. However, you can try one or few of the following tips to be able to keep a totaled car:
  • Talk to your insurance claim adjuster and fight for your car. Remind the agent that you are the one paying the premium and that you have the right to change insurance companies.
  • Document all maintenance performed on your car. This will help you decide whether or not you should accept a particular settlement offer.
  • Insurance companies offer their own choice of repair shops. Use your own discretion. However, do your own research and also on the repair shop suggested by the insurance company.
  • If you wish to retain your totaled car, the adjuster will deduct the salvage value while determining the final settlement offer. You may try negotiating with your adjuster to settle for a lower salvage value of your car.
  • If you want to know the ACV of your car, don't depend on your insurance company. Get a second opinion, and do your own research online or at your local library.

Related readings

Hi all, I am in a trouble. I was in an accident some days back. Although, none was hurt but it has caused a great damage to my car. I had approached to my insurance company and filed a claim. Now my insurance company wants to ‘write off' the vehicle. My question to the community is- when is a car considered totalled ? What are my chances if I want to retain my vehicle? Will the insurer compensate me under such circumstances?


Total Comments: 152

Posted: Thu Sep 06, 2007 06:40 am Post Subject: totaled car buy back - when is a car considered totalled?

Hi carclaims, why you want to retain the damaged car? I know an emotional bonding is always attached to them but you also need to consider the cost associated with mending a damaged car. If the insurance company feels that it is damaged beyond repair then you also better take the amount they are offering and settle for a new car. There are lots of new models of cars available in the market :wink:

Posted: Thu Sep 06, 2007 07:44 am Post Subject: Thumb-rule of a totaled car

Well carclaim, it's quite natural for you to face the dilemma (here I will second what Carla had said about emotional attachments) but the Vehicle insurance company definitely has some logic behind declaring your car ‘totaled' (the insurance companies apply their own wits and theories about it). However, here is the ‘thumb rule'- the insurer may decide to ‘write off' your car if the cost of repairing exceeds the market value of the vehicle. In that case, they will only pay off the book_value of the car.

Now it may so happen that you feel that they are paying less than the value of your car. In such scenario, my dear friend, the ball will roll into your court. You are then required to prove that the car was worth more than the compensation amount at the time of the loss. And to prove it you may require to furnish evidences like- the car's mileage record, a declaration form the mechanic stating the car's value etc.

Hope this information will help you.


Posted: Thu Sep 06, 2007 09:11 am Post Subject: Reconsider your decision about keeping your car

If you want to retain your car, inform that immediately to your insurer. Because, the chances of getting the car back normally reduces once the car enters the salvage yard. When your car gets ‘totaled' the insurance company will issue you a check that will leave you more or less to the same financial condition before the accident occurred. Then they will send the car to the salvage yard and will get it auctioned for its parts.

Now coming to your question (I am assuming that you have reasoned yourself enough before deciding upon keeping your car), you can keep it if the insurer allows you to do that. However, even if they let you keep the car they are still obliged to pay you the compensation minus their earning from the auction.

But in such scenario, you have to bear the extra amount required for getting it repaired. And, that's not all' you are also required to satisfy the specifications forwarded by the state motor vehicles regulation authority before bringing the repaired car back on road.

Regards, Fatman

Posted: Thu Sep 06, 2007 04:36 pm Post Subject: totaled car buy back - when is a car considered totalled?

fatman is right. We had a car that my son totaled and I decided to "keep" the car-why, I don't know!

Well, the way they do it here is, they (the insurance co) has a yard they have it moved to until it is decided if it can be fixed, or totaled out. They decided my cars damage exceeded the book value of my car, and had it deemed totaled.

I asked if I could keep the car, and was told, they will pay me a check, but I couldn't keep the car too. They did auction it off.

After carefull consideration, and advice from my husband, the car sustained too much damage, was an older car, and I would be throwing good money after bad

Good Luck to you!..Karen

Posted: Fri Sep 07, 2007 02:06 am Post Subject: totaled car buy back - when is a car considered totalled?

OP, and insurance companies obligation is to pay for your loss. So technically, if you had a vehicle with $1 of damage, they could declare it a total loss and pay you it's value less your deductible. That won't ever happen as it would cost them much more money and it would really upset a lot of insureds. I'll explain one more problem with this but let me point something else out. Many states require an insurance company to obtain a salvage title on a vehicle if the carrier would be paying around 80% of it's value in repairs. If a salvage title is required, the insurance company will consider it a total loss. As this is a good number, most insurance companies will use this as the threshold even if the state does not require it (as with this much damage there is bound to be additional damages found which would make the repair cost more then it's value). This is "when" an insurance company can declare a vehicle a total loss. Now to back up a little... there is another problem with declaring a vehicle a total loss when it has minimal damage. The owner of a vehicle can _always_ retain it. Many adjusters will tell you that you cannot but you can. It's your property so no one can force you to give it up and the loss can be settled without the insurance company obtaining the vehicle. Now here is the important part... you almost never want to do this. I can't get into all the reason why but I'll mention a couple. As mentioned above, the insurance company will then pay you the total loss settlement but less the vehicles salvage value. In most cases this won't work in your favor. I'll give an example: you have a $1500 vehicle with $1000 in damage and a $500 deductible. So the amount payable on a total loss is $1000 (value less ded.). Also, the salvage is $300. So if you retain the vehicle your only going to be paid $700. This does not work if you would need to have more then $700 in repairs made just to be able to use the vehicle. You might as well go out and buy a better vehicle and pay a little out of your pocket for it. I know keeping the vehicle may still sound like a good idea but here is the 2nd kicker... many insurance companies will also report the vehicle being a total loss to the state where it is titled (they are probably required to do this but some adjusters don't as it just means more work). If the state gets a report of the vehicle being a total loss, the DMV won't allow you to obtain tags unless you jump through a million hoops and give them your 1st born child. Again, very rarely is it to your advantage to keep the vehicle.

There is one situation where I will say it might be better... if the vehicle was a POS (piece of sh*t) to start with a something like a dented fender caused it to be a total loss. In this case it's worth more to the owner as a driveable vehicle then it's actual value.

There are a few other situations that can happen (Contract for Repair, etc) but I won't get into those as this post would be even longer. :)

Posted: Fri Sep 07, 2007 05:20 am Post Subject: totaled car buy back - when is a car considered totalled?

Hi carclaims,

First off- TCope, that was a great response.

Carclaims- I agree with other posters that you must have your reason for wanting to keep the car. Whatever, it's your car. I also agree that if you want it back, you better get on it. Once the wrecking yard gets ahold of it or it's parted out, your options are pretty much gone (unless you go and buy the parted-out car back yourself).

So...most insurers allow insureds to buy totaled cars quite willingly. That lessens the process for them, they don't have to devote the man-hours associated with processing the salvage, etc. They will either:

Deduct the cost of the value of the salvage from the final settlement you're offered, or
Settle in full initially, and then sell you back the salvage as a separate transaction.

In either case, you're stuck with a salvaged title, can never get an original title again, and won't (most likely) ever be able to sell it. So, my theory is that you want the parts. That can often be worth more than the total value of the car, depending on the car.

Good luck.

InsTeacher 8)

Posted: Mon Sep 10, 2007 11:24 am Post Subject: RETAINING TOTALED VEHICLES


Every time I total a vehicle, one of the first things I tell an owner is you will have to make the decision if you want to retain the salvage or if you want us (insurance company) to obtain it. Many many times with older vehicles it is the smartest thing to do. For instance it is company policy with the company I work for if a vehicles acv is 2500.00 or less the salvage bid will be $150.00 period, no need to call for a bid from the auction. It happens many times that an older vehicle has reached the total loss thresold and is still driveable. In the state I am in there are three ways that will total a vehicle. OTL (obvious total loss), meaning there is too much structural damage to even consider repairing it safely, ie firewall smashed, total burn etc. or a vehicle with an acv of 2500 have more than 50% of outter sheetmetal needing replaced. An economical total, cost of repair equals or exceeds, acv minus salvage, my state also has a percentage, if repair cost equals or exceeds 75% of acv (less sales tax and airbags) vehicle totals, (they just changed this law last week, think it is 80% now on 6 year old and new vehicles, and hail no longer 'counts'). In many instances especially with older vehicles it is the smarter thing for the owner to retain. You will have a salvage title, but in most states you can repair and take repaired vehicle to the highway patrol (in my state), they will inspect it, if passes the title will change to 'prior salvage title' although frankly this really doesn't help much, it will still lower the acv should it total again. Back to the question, many times an older vehicle say 2000.00 is totaled but still drives (legally), you can have partial repairs done, and maybe still get several more good years out of your vehicle. I have also seen in half the instances where an owner retained salvage, that they immediately sold the salvage at a much greater profit. If Ins company said (as in my companies case) salvage is worth 150.00 owner retains and immediate there after sold salvage either in the newspaper, or on auction, to a local rebuilder themselves for 500.00 or better, so in that case retaining was also the better decision. One other thing, in all states when a vehicle is totaled the owner is given some type of sales tax relief, some states pay the actual sales tax amount to the owner others issue a sales tax affidavit or credit, if you retain salvage you do NOT get this.........hope this adds to the prior well written and helpful posts....Good luck !!!

Posted: Thu Sep 27, 2007 01:49 am Post Subject: hi!

carclaims the same thing happened to our van. its 10 yrs old but still in a very good condition (til the accident). now the shop we went to said it could just be declared total loss by insurance... though it wasnt a definite estimate submitted to the insurance company yet. our reason for wanting to keep the van is not sentimental nor emotional. its more practical. the van runs perfect and very safe. its just the side door and fender that were dented. plus the back tire rim was also dented which we had already fixed and paid for (another loss for us if insurance company declares it totaled). it's more of body work thats needed.

but as lori mentioned, for the insurance company, its an "economical total". it's like saying, our loss for the insurance company's gain. either we keep the van or give it up to the insurance company we are at the losing end. if we NOT KEEP the van, with the amount they pay us.. it wont be enough to get a decent replacement used car nor enough for downpayment for a brand new car so monthly payments are low (our van was perfectly ok and fully paid off). if we KEEP the van, with the amount they pay us.. its wont be enough to have the damages repaired so it will pass dmv inspection and have it registered. so either way... its our headache and financial burden.

my question to lori is... is there a way we settle the issue with the insurance company? like say, they wont declare the van as total loss but pay us only the amount for acv minus salvage. that way we can have partial repairs done over time and not have to deal with dmv process and fees. is that possible?

Posted: Thu Sep 27, 2007 11:01 am Post Subject:

Good morning muuyymmuuy !

my question to lori is... is there a way we settle the issue with the insurance company? like say, they wont declare the van as total loss but pay us only the amount for acv minus salvage. that way we can have partial repairs done over time and not have to deal with dmv process and fees. is that possible?

This question is 'if-y'. The only way you can accomplish, retaining your (really) totalled vehicle, without it being 'declared' a total is IF, and only IF your adjuster will agree to the pay you the/a 'repair amount' just under what would consitute a total.

For example, lets say the 'repair thresold' is $2000.00 meaning if the repair cost gets to 2k or above they have to total the vehicle. If the adjuster will write an estimate and pay you for $1999.00 in repair (and you go away). Then the vehicle will not be deemed at total loss. You however, now have the $1999.00 to do with whatever you want. Partial repairs, sell the van as salvage on your own etc. But can never ask for anymore money. This is a fine line, and not real sure ethically how I feel about this.

I have on an occasion done this. Two different ways, say a vehicle will total at (again) 2k, my sheet is $2100.00. The (repairing) shop will agree to a 'contract' repair of $1999.00 meaning they agree to repair that vehicle for this $1999.00 and NO MATTER WHAT COMES UP LATER (ie hidden damage) they will not request a supplement etc. they will have to 'eat' anything above that. But still must complete a quality repair and of course the owner gives permission. But in most cases this is a 'win/win' for both vehicle owner and shop and of course would've been suffiencent tear down to make sure we didn't miss anything.

I have (on very few occasions) done the same with an owner. But only when it is close. Such as the example above. I've never done that if the threshold is 2k, and repair estimate is 4k, that wouldn't be a good outcome for anyone. Do you understand? I know this gets complicated with all these numbers..... :?

plus the back tire rim was also dented which we had already fixed and paid for (another loss for us if insurance company declares it totaled).

What do you mean by this? Was this a prior loss, or you replaced the wheel due to this loss?

our loss for the insurance company's gain

I don't see the insurance companies gain, you'll have to elaborate on that, I'm not understanding your point there. :(

if we KEEP the van, with the amount they pay us.. its wont be enough to have the damages repaired so it will pass dmv inspection

This isn't necessarily so. When an insurance adjuster writes an estimate we have to write it a 'certain' way. Meaning it has to be written to a certain standard. (ie) might have to blend to an adjacent panel, but if you (or the shop) can find a used door same color as your van (not that hard to do especially on an older vehicle), and don't mind a slight variance in the color, you've saved a bundle on the repair see? What I'm saying is, if you retain the vehicle and the estimate of repair was 2k, ask the shop (before making your decision regarding if you are retaining or not) what they will charge you to repair the van so that it is safe to drive and will pass inspection. There are many things on EVERY estimate that can be trimmed, (ie factory stripes that cost 300 buck, don't replace them have shop for about 50 bucks remove the stripes from the rest of the vehicle). Talk to the shop manager or estimator about getting the estimate to 'bare bones' see where you are there in relation to the amount of money you will get if you retain the salvage, you might be surprised.

like say, they wont declare the van as total loss but pay us only the amount for acv minus salvage. that way we can have partial repairs done over time and not have to deal with dmv process and fees. is that possible?

If they pay you the acv less salvage, the vehicle will be totaled, only other options are what I have above, another thing though, if there is a licensing fee on a total, and of course sales tax this too will be paid to you in addition to your settlement (state dependent on the sales tax some pay it directly others in the form of a sales tax affidavit or credit).

Good luck, let us know if any more questions..........

Posted: Mon Oct 29, 2007 09:19 am Post Subject:

Hi bksushi, welcome to ampminsure. Your post has been shifted to the following URL. Pls click on it to find the post.


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