Wonder No More: Here's How Much Your Totaled Car Is Worth

Wonder No More: Here's How Much Your Totaled Car Is Worth

Whether on a weekend getaway or a quick grocery run, no one likes to get in a car accident. Not only must you work out the details with the police and your insurance company, but several other snags can happen, too. Perhaps the other driver refuses to admit fault, in which case you also have to endure the process of legal proceedings. And that can take time.

Even worse, what if your insurer decides your car is totaled? There's both emotional and financial toll involved, as it could be your dream car you saved up for, or – dream car or not – perhaps you simply loved the vehicle. Then there's the hassle of securing something new to get back out on the road, which can take several days, weeks, or more.

How much will insurance pay for your totaled car? Read on and discover some tips and tricks that can help you with the process.

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What is a totaled car?

Insurance companies consider vehicles to be totaled when they're severely damaged and meet specific criteria, primarily based on the cost of the necessary repairs and their actual worth at the time of the accident. Though regulations vary from state to state, a few generally accepted reasons insurance companies deem vehicles totaled exist.

If your vehicle is involved in an accident, your insurance company will send an adjuster to inspect the car and assess its damage to determine whether or not it's totaled. 

Insurance companies consider vehicles that suffer damage beyond repair to be totaled. Reasons for this can include frame damage or a combination of broken mechanical parts. 

Your insurance company will also decide your vehicle to be totaled even if it's repairable, but the cost exceeds a set percentage of their value, usually 51-80 percent. Different insurance companies use different practices. However, some states have regulations for this ratio, such as Alabama, whose rate is 75 percent.

How much is a totaled car worth?

When your insurance company decides your vehicle is totaled, they'll make an appraisal of its value before the accident. During this step, damage incurred from the collision isn't part of the equation. 

Your insurance company then brings in a third-party adjuster to make another appraisal for an additional perspective on the car's value. 

What both appraisers are seeking to pinpoint is the car's actual cash value or ACV. Actual cash value refers to what the car would have sold for just before the collision. 

Your insurance company will consider both adjusters' reports and use factors like vehicle condition, mileage, options, and the value of similar vehicles in any given local market. 

After the adjusters appraise your car and the insurance company takes those factors into account, there are a few things to remember.

First, you'll owe your deductible before any payment is issued. So you'll want to take a look at that amount before expecting a certain amount of money.

However, there are circumstances where you won't receive money for a totaled vehicle. 

If you owe money on an auto loan, your insurance company will pay that off first. If anything is remaining, you'll receive the balance. 

If you're leasing your car, a similar policy applies. 

Keeping in close contact with your insurance company and adjuster can help the process move smoothly and keep you informed. 
Before you get behind the wheel of your next vehicle, you'll probably want to sell your used one. But taking photos, posting an ad, and talking to prospective buyers can be a hassle. Let Shift handle the details when you sell your used car. Just visit Shift's easy-to-use website, provide your license plate number, and you'll get a quote in two minutes. Whether you're selling an electric SUV or pickup truck, Shift is the way to go.

How much will insurance pay for my totaled car?

The purpose of auto insurance is to protect you in the event of an accident. Expenses from auto collisions can amount to thousands of dollars, and insurance helps you in the event of unforeseen costs.

But if your insurance policy does not include specific add-ons, you may not be fully protected if your car is totaled.

Guaranteed Auto Protection, or GAP insurance, is critical if you have loan obligations exceeding your car's value. GAP covers your remaining payments, saving you financial strain in the process. 

Another helpful add-on to your insurance plan is Guaranteed Replacement Coverage. Policies that include this feature allow you to replace your totaled car with a new one, taking the worry out of getting back on the road. 

If you've barely driven a new car – say, a vehicle that's three months old or less – it's common for insurance companies to buy you a new one of equal value, regardless of your policy. 

But if neither of these options appeals to you, you'll still receive your totaled vehicle's Actual Cash Value minus your deductible.

There's much more to selling a used car than just accepting payment and handing over the keys. Wouldn't it be easier to let someone else handle the process? If you live in one of Shift's many service areas, a concierge will drive to your door and perform an inspection. If everything checks out, they'll complete the sale on the spot. 

And spending hours of your precious time washing and waxing your used vehicle is another hassle when it's time to sell. But when you sell to Shift, a little dirt doesn't affect the offer you receive. Shift beats offers made by dealerships with prices driven by powerful machine learning algorithms and tons of data.

With your used vehicle sold, you're free to find a reliable used car on Shift's easy-to-use website.

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Where does a totaled car end up?

There are two possible destinations for a totaled car. 

Usually, insurance companies auction off a totaled car to a salvage yard. The insurance company will keep this money to offset their costs. 

If you'd like to keep your vehicle and make repairs, your insurance company will first take bids from salvage yards to establish its fair market value. Your insurance company subtracts this salvage value from the payout you'll eventually receive.

After being counted as a total loss, your vehicle will have a salvage title.

Salvage titled cars can't be registered or driven. Repairing a vehicle to roadworthy condition means it's eligible for license plates so that it is legally drivable once again. A repaired vehicle will also need to pass a state inspection.

Salvage title regulations vary depending on the state, so communicating with your insurance provider before keeping your totaled car is a good idea. 

Though getting in an accident and having your car totaled by an insurance company isn't fun, it makes the process easier considering the available options and working through them. The good news is you'll probably get something in return for your totaled vehicle, giving you something to put towards the next car of your choice.

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Author
Shift Editorial Team