More than five million vehicles are totaled each year in the U.S., according to the National Automobile Dealers Association. A “totaled” car is sometimes called a total loss, because it means your car can’t be repaired or will cost more than it’s worth to do so. But just because your insurer says the car is totaled doesn’t mean you have to get rid of it altogether. When your insurance company declares your vehicle totaled, know what your options are:
Accept a Cash Offer
Typically, the insurer owes you the cash retail market value of the vehicle. You could accept a cash settlement based on this number. This is a simple and straightforward option, but just know that you give up your right to ask your insurance carrier for more money once you accept their offer. To get an idea of what you might get for your car, check out its Kelley Blue Book value.
Pay for the Repairs Yourself
If you’re handy in the garage or have a connection with a mechanic, you could do the repairs yourself. However, the insurance company may not want to insure your car after it’s been declared totaled. Find out their position and research other carriers who might offer insurance instead.
Also, contact your state DMV office and ask about about its regulations on salvaged vehicles. Some states require you to forfeit your current title in exchange for a salvaged title. You will typically need an application for title or registration, proof of ownership, verification of vehicle, brake and light-adjustment certificates, and then you’ll have to pay the appropriate fees. The vehicle may then be considered restored to operational condition.
Sell the Vehicle
You might feel the insurance company isn’t offering you enough money for your totaled car and want to sell it yourself. You can obtain a salvaged title or certificate from your DMV and take it to a dealership. Many will purchase junk cars to sell at auction, resell or fix it up and sell at a profit.
Selling to a private buyer is also an option, but you should know that salvaged titles increase others’ insurance costs, so it’s not always an easy sale to make. Plenty of scrap yards, junk yards and even some charities will also buy a totaled car, and they may even transport it at no cost.
Sell or Use the Vehicle for Parts
If you don’t want to do any of the above, you have one other option to consider: Use the vehicle for parts. Keep any parts you want and make a little cash selling those you don’t. Post a listing on Craigslist, explaining the situation and the parts you want to sell. Mechanics and DIY-ers are always looking for parts.