LegalUnderstand Your Options for a Totaled Car

Understand Your Options for a Totaled Car


Nobody wants to get into a car accident. But with 1.4 billion cars on the road and large truck crashes every year, you may not know what can happen to you. According to the annual traffic crash data by National Highway Traffic Safety Administration, fatal crashes have increased by 6.8% in 2022. So, it’s possible someday you or someone you know will face a motor vehicle accident. If the car is totaled in the accident, here’s what you need to understand.

What is a Totaled Car?

A totaled car is a car that costs more to repair than its actual cash value. 

When you get into a car accident, the insurance company generally pays for the repair cost. Based on your state and whether you or the other driver was at fault in the crash, your damage cost will be paid by your insurance company or another driver. Once you file a claim, the company will send a claim adjuster to inspect the matter. He/she will evaluate how much the company has to pay for the damage.

If the person declares the car is totaled or at a total loss, it’ll be taken by the insurance company and sold for scraps. A totaled car is not worth repairing or restoring meaning the repair cost is higher than its actual value. For example, if your car costs $12,000 and the repair cost is $13,000 or more, the insurer will consider the car totaled.

What Are Your Options If the Car is Totaled?

If the car is totaled, here’re the options for you:

Option 1. File an insurance claim and let them pay

Your first and foremost option to deal with a totaled car after an accident is to let the insurance company pay for the damage. Depending on your insurance policy and state law, they may either replace the wrecked car with a similar one or pay you the amount equal to the car’s actual cash value (ACV).

If you accept the cash payment but still owe money as a car loan, insurance companies often make the full payment to both you and the lender. Once your loan is paid off, you can keep the remaining amount. But if the insurance company’s offered money is less than what you owe, you’ll need to pay the balance.

Option 2. Sell the car to a junkyard or online

Many junkyards purchase totaled cars for scraped parts. If the insurance company is not paying you enough, you can sell your damaged car in a nearby junk or scrap yard for cash. You will need the original car title, registration, and driver’s license. If you accept their offer, they will pay you and tow the car.

If you’re not satisfied with their offered price, sell the totaled car online. You may wonder who will buy a totaled car. But there’re people that buy total loss vehicles to sell the scrap metals and other parts for money. Whether it’s a small car, truck or SUV, you’ve to submit the damage details, a couple of photos of the car in its current condition, and online services will give you a quote within 90 seconds. Upon accepting it, they’ll arrange the towing and you’ll receive your money instantly.

Option 3. Keep the car

You can keep the totaled car for driving further. This can be understandable if you don’t have comprehensive or collision coverage to pay to repair the car. 

However, driving a totaled vehicle is not safe. Before taking it out on the road, it’s advisable to have a professional inspect it. You can go to an expert mechanic to repair the car and restore it to its pre-accident condition. Otherwise, such cars may lead you to more financial losses.

Option 4. Use the car’s spare parts

The next option is to keep the car and use it for spare parts. This option can be useful if you have a similar car or another model that has the same parts. Even if not, you can sell the parts that are still working fine. In this way, you can make some money and get rid of the damaged car.

Option 5. Donate the car to a charity

Donating your wrecked vehicle to a charity or non-profit organization is a good option. You can find many organizations online that accept totaled cars. You can also claim the tax credit in such cases. Furthermore, even if the car is not driveable, the organization can sell spare parts or scrap metals for cash.

Option 6. Get a new car

It is unsafe to drive a totaled car or to keep it. This will be nothing but a more financial loss. So, once you know how much the insurance company will pay, you can opt for buying a new car. In many states like California, insurers pay the sales tax on the new car as a final settlement. If that’s what you want, remember to request reimbursement within thirty days of buying a new car.

Option 7. Trade it in

If you want to get a new car, the car dealer may offer you to use a totaled car as a trade-in. Many dealerships accept trade-ins with a salvage car. Just make sure to consult with a professional to confirm if the dealer is offering you a sufficient amount or not.

Here’re the options you have when your car gets totaled in an accident. Whether you’re dealing with an insurance company or online dealer to get rid of the car, make sure to compare the price with others. There’re many online services that are ready to offer you a fair amount. If the insurance policy doesn’t pay you enough, sell the car online to get cash.

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