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QuestionInsurance Question  I run a car shredder and was just wondering what do they do with totaled out cars?

AnswerAuto Insurance Answer

When a car is determined to be a total loss and a settlement has been made with the owner the insurance companies generally will take possession of the car and sell the car for salvage value.

It will depend upon state laws if this means a mechanic can buy the car and rebuild it and then resell it to be driven on the road again or if the car must be sold to a junk yard or scrap yard so that the car is kept off the roadway since it is unsafe to drive. So the insurance provider may sell it for parts, sell it to a junkyard for scrap or if it can be repaired sell it at an auction as a salvage vehicle.

If the car is allowed to be resold and rebuilt then it may even be sold at an auction or offered back to the owner for the salvage value.

If it is sold at an auction it will have a salvage title and in some states once the car has been repaired it will then get a rebuilt title to show that it is road worthy. If the car is sold to a junk yard it may be parted out or it may be crushed. It will depend upon the extent of the damages.

State laws and insurance company guidelines will dictate what an insurance provider would do with a totaled car. You can contact your state's insurance regulatory body for information on what your state laws require insurance companies to do in your state with salvaged vehicles and if your services could be used.

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