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Q

How is salvage value determined on a car that has been determined "totaled" by the insurance company? This is a 2005 Dodge Stratus SXT.


A

Salvage value is what your wrecked, unrepaired car is worth. Actual cash value is what an undamaged car identical to your own is worth on the open market.

Under the terms of your collision or comprehensive car insurance policy, your insurer typically will pay you the actual cash value or fair market value of the car. After the insurer pays you for your car, the wrecked vehicle goes to an auction or a salvage yard, where it is either sold to the highest bidder or used for parts. The insurance company keeps the proceeds of that sale.

If you want to keep your totaled-out car, some insurers will turn over the vehicle to you and deduct the amount the wreck would have brought at auction from its settlement. Be aware that any vehicle declared a total loss thereafter carries what's known as a "branded" title to warn future buyers that it was wrecked. Even if you can rebuild the car to like-new condition, its title will carry a salvage notation, and the car itself will be worth only a fraction -- perhaps half -- of what an clean-title car would bring. (See "5 reasons to avoid salvage-title cars.")

Any settlement offer is a negotiation. The car's fair market value depends on many things, and you can bolster your own case for its worth with local classified ads, photos of its condition, and receipts for equipment and maintenance.

The same thing applies to the wreck itself, though it's much more difficult for a car owner to gauge what a car's parts will fetch.

Should you buy your car back, check with your insurance agent about coverage. Many companies won't insure a salvage-title vehicle at all, and others only for liability, because the car's true value is difficult to determine. Progressive is one company we work with that will insure a rebuilt vehicle.

Enter your ZIP code here and get a quote. At the end of your quote, select Progressive and we will ask all the necessary questions to determine eligibility and get you a policy for your vehicle that has a rebuilt "branded" title.


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1 Responses to "How is salvage value determined on a car that has been determined "totaled" by the insurance company? This is a 2005 Dodge Stratus SXT."
  1. Anonymous

    Very helpful..

      Reply»