A car with a salvage title or rebuilt title can be worth thousands of dollars less than a comparable car with a clean title.
Kelley Blue Book (KBB) notes that a salvaged, reconstructed or otherwise clouded title permanently negatively affects a vehicle’s value. Their industry rule of thumb is to deduct 20% to 40% of the Blue Book value. However, you’ll need to have a salvage title vehicle privately appraised on a case-by-case basis to determine its market value.
- An automobile with a rebuilt or salvage title may be worth hundreds or thousands of dollars less than a comparable model with a clear title.
- A salvaged, rebuilt, or otherwise clouded title has a long-term detrimental impact on a vehicle’s value, according to Kelley Blue Book (KBB).
- A preliminary estimate of the value of a salvage vehicle can be obtained by searching up the model’s value (with a clean title) in an automotive reference book like KBB, and then deducting 40% of the value.
What is the salvage value of a vehicle?
The salvage value of a vehicle represents how much the totaled car is worth.
In general, salvage vehicles are worth between 20% and 40% less than their Kelley Blue Book value. However, each vehicle is different. With that, it’s a good idea to get a salvaged vehicle appraised privately to determine its value accurately.
Salvage value formula
You cannot find a salvage car’s value in Kelley Blue Book or with a standardized car salvage value calculator. So, if you want to calculate the salvage value of a car, start by determining how much the car would be worth with a clean title. Then, deduct 20% to 40% of the amount, which will give you an estimate of the vehicle’s salvage value.
For example, let’s say the vehicle is worth $10,000 with a clean title. When you deduct between 20% to 40% of that amount, the vehicle’s estimated value ranges from $6,000 to $8,000.
How to determine the salvage value of a car
One way to determine the value of a salvage vehicle is to get a rough idea by looking up the worth of the model vehicle (with a clean title) in an automobile guide, like the KBB, and take 40% of the value.
You may even want to take off 50% of the value since if an insurance company totals it out, it is not uncommon that they will only pay out 50% of what the vehicle would be worth with a clean title (not salvaged).
Another way to determine the value of a salvaged vehicle is to ask a local dealership what the car would be worth with a clean title. If you have a car with a salvage title, you could take it to the dealership for them to appraise its value for you.
If an insurance company determines that your vehicle is a total loss and you want to repurchase the car for its salvage value, the amount you owe the insurance company (or have taken out of the settlement amount) is determined by them.
There is no universal list for the salvage value of a particular car. It depends upon the vehicle, its damages and how much it is worth in its current state after it’s determined a total loss.
The salvage value is the amount of money the insurer would recoup when selling the vehicle through a licensed salvage vendor. So, instead of selling it to a salvage vendor, they allow you to repurchase your car, get the needed repairs and drive it again.
The salvage value in a buyback situation is the car’s worth in the condition it is in with the damages it sustained in the accident. If you wish to buy back a car from an insurance company that deemed your vehicle a total loss, you should discuss the value of the car and the cost of buying it back.
Check around with local salvage yards to ensure the salvage value the insurance company quoted you is correct for your vehicle.
Learn more in detail about how to determine the actual cash value of your car
Is it worth repairing a salvage car?
Whether your vehicle is significantly damaged or you are considering buying a salvage vehicle, it’s helpful to run the numbers. In some cases, it can be worth it to repair a salvage vehicle.
“Repairing a salvage vehicle can be worth it if the cost of repairs is significantly lower than the vehicle’s post-repair market value,” says John Crist, founder of Prestizia Insurance.
“For instance, if you get a reliable mechanic who can ensure the car is safe and fully functional, and the total investment (purchase price + repair costs) is less than buying a similar used vehicle with a clean title, it might be a good deal. However, be cautious and have a detailed inspection done to assess hidden damages. Also, consider future insurance premiums and potential resale challenges down the line,” he says.
How does the age of a vehicle affect its salvage value?
When it comes to vehicles, salvaged or not, an older vehicle is worth less than a newer vehicle. In terms of salvage value, an older vehicle may take more of a hit than a newer vehicle.
If you have an older vehicle with a salvage title, you can expect the vehicle’s value to be between 20% to 40% less than a similar vehicle with a clean title.
What are the risks of buying a salvage title car?
If you want to buy a salvage title vehicle, there are some risks, including the following:
- No guarantee of the damage. When purchasing a salvage title, it can be difficult to judge the extent of the damage from the exterior. If you purchase the vehicle, there is no warranty to fall back on. With that, it’s critical to get the car inspected before moving forward.
- Financing can be difficult. Many lenders won’t finance a salvage vehicle. If you need a loan to cover the purchase, this can make finalizing the deal impossible.
- Lower resale value. If you want to sell the vehicle later, it’ll have a low resale value. After all, the salvage car value is relatively low.
- Repairs might be needed. A salvage title vehicle might be more prone to repairs.
- Insurance costs. Some insurance companies are less willing to cover a salvage title car’s value. The risk could push your insurance costs higher.
While there are risks to buying a salvage title vehicle, there are also some benefits. For example, the vehicle might be relatively inexpensive to purchase. If you can get the car checked out by a reliable mechanic to confirm it is safe to drive, then a salvage title vehicle could be the right purchase.
Can I negotiate the salvage value with my insurance company?
If your vehicle is totaled, the insurance company will assess its salvage value.
Since there isn’t a standardized method of determining how much a salvage car is worth, you can negotiate the salvage value of your vehicle. But if you think the insurance company’s offer is too low, you’ll need to provide evidence as to why the vehicle is worth more than what the insurance company is offering.
For example, you might get estimates from local salvage yards to confirm the vehicle is worth more than the insurer’s estimate.
While you might be able to get your insurer to increase the salvage value of your car, it likely won’t be enough to cover a new vehicle purchase. Depending on your state laws, you might be able to buy back the damaged car from the insurance company. But be prepared to cover the cost of repairs.
Learn more about what are the values of vehicles with rebuilt title s vs. clean titles.
Final thoughts
The salvage value of a car is less than a vehicle with a clean title. However, determining the exact value of a salvage vehicle often requires some legwork.
If you want a firm estimate of a salvaged vehicle’s title, consider getting a private appraisal. But if you are comfortable with a looser estimate, then subtract 20% to 40% from the value of a clean-titled vehicle of the same model.
Sources
- Kelley Blue Book. “How to beat car depreciation.” Accessed June 2024.
- Kelley Blue Book “Values.” Accessed June 2024.
Get advice from an experienced insurance professional. Our experts will help you navigate your insurance questions with clarity and confidence.
Browse all FAQs