What is the Salvage Value of Your Car and How to Calculate It

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Edgar Moulton.

22.09.2021

Edgar Moulton. Car Expert

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Repairing an old clunker or the most recent fender bender can be a constant drain on the old piggy bank. Maybe the insurance company wants to write it off, but how do you know if their offer is reasonable? If you’re tired of the extra bills or are wondering, “what is the salvage value of my car?” We can help. In this article, we discuss how to calculate the salvage value of a car so that you can get the best value out of it.

What's the Salvage Value of Your Car?

The salvage value of cars isn’t just the amount of money a salvage yard is willing to pay for the metal and salvageable parts on a vehicle. The salvage company looks at the year, make, and model of a car, and also the condition. It then punches that number into a calculator and uses a similar process to what an insurance adjuster would use. A vehicle that is in working condition will often fetch more than a totaled automobile of comparable vintage.

The car salvage value is commonly determined using the average of the retail and wholesale values to calculate the current market value of the car. Many insurance companies are willing to pay accidents or act of nature repairs up to 25% of the market value. If repairs cost more than that, they usually write the auto off. The salvage value is approximately 25% of the market value of the car.

The car salvage value may be paid to you directly if you’re handling the sale, or to an insurance company selling or auctioning off a totaled vehicle. The salvage value is normally lower than the actual cash value (ACV), and never anywhere near the replacement cash value (RCV). When calculating the market value, the options, add-ons, and any extra equipment are all important as they help increase the actual cash value.

What's The Car Value of A Totaled Car?

The value of a totaled car depends on the year, make, model, and condition. An insurance company appraiser determines if a vehicle is totaled, aka a write-off. They ballpark the cost to repair against the percentage of the market value the company is obligated to repair in their policy agreement. Should the repair costs exceed that value, or if the frame is bent and can’t be repaired for safe use, the car is deemed to be totaled.

The type of damage and the vehicle’s vintage also affect the value. A car worth $50,000 may be deemed totaled and even look like it is, while one worth $1000 may only have a dent and still work. An expensive car with a bent frame that looks like an hourglass may also have less value than one that has a damaged quarter panel due to the condition of salvageable parts. The appraiser must take everything into account when setting a value. The cost to repair, and if it can be repaired to operate safely, are the main factors in determining if the automobile is a total loss.

Some car dealers may offer between $250 and $500 for a totaled vehicle in trade when purchasing a replacement car if you bring it in. Typical junkyards may match that amount, but some will charge you that amount to haul your damaged chariot away. Some salvage companies pick vehicles to fill inventory requests from body shops or internet sales and may pay a bit more. Being able to determine the approximate salvage value of a totaled car is a good way to determine how good an offer is.

How to Find The Salvage Value of A Totaled Car

Salvage companies are different from junkyards. They aren’t just interested in the car’s scrap metal value, which is about $71 a ton; they’re interested in selling off vehicle components for reuse and profit.

The salvage value of a car can be determined by finding what percentage of the market value your insurance company is willing to repair and multiplying it by the market value of the auto. Alternatively, you can contact us to find the value of a totaled car. 

What's The Value of A Car Totaled in an Accident?

There are several ways to find the salvage value of a totaled car. Your insurance company may tell you. Alternatively, you may be able to get a ballpark by adding all the deductibles together with the amount they are offering as a settlement and subtracting that value from the market value of your car.

To get an idea of the market worth of your wreck, use the Kelley Blue Book to determine the retail value, and the NADA (National Automobile Dealers Association) Used Car Guide to identify its wholesale worth. The average of the two values is the market value. Since many insurance companies will only make repairs up to 25% of the vehicle’s market value before declaring it a write-off, the worth of the totaled auto is the amount they’ll repair.

Calculating Your Salvage Value and ACV

Figuring out the actual cash value (ACV) is part of how to determine the salvage value of a car. When a vehicle is written off, the insurance company pays out the ACV, minus any deductions, and any 3rd party liens. The ACV is based on the automobile’s particulars at the time it was written off. Once you sign the ownership over to the insurer, they then dispose of it through auctions or sales.

Calculating the ACV

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Use the purchase specification sheet if you have it from the time of purchase, or from the ownership papers to list all the extras on your car. You’ll need the year, make, model, mileage, and trim package, plus any extra equipment and add-ons. The more you can identify, the greater the return.

Access Kelley Blue Book to get the retail value of your ride, and NADA’s Used Car Guide for the dealer trade-in rate. Add the two numbers and divide by 2 for the average of the two, which is the estimated ACV or market value of your auto. Use other sites to get comparable values and recalculate for the best average cash value.

Determining the Salvage Value

Ask your insurance provider what percentage they use for their automobile salvage value calculation. It commonly is 75% of the ACV or market value, but the formula used by different companies may vary slightly.

The Insurer may compare your vehicle against salvage auctions of similar totaled vehicles, and include other transportation and disposal costs. The easiest way is to multiply the ACV by 0.25 or 25% to determine the salvage value.

How to Sell A Salvage Car for Cash?

The insurer usually pays out the ACV minus any deductibles when a vehicle is written off. It then disposes of the wreck and uses that to offset your claim payout. If you aren’t ready to part with your old car or feel you can get more money disposing of your damaged auto, you can choose to keep the wreck and take a lower payout.

The Insurance Company will use their salvage car value calculator and deduct what they believe they can get for the wreck at auction, plus the regular deductions, and cut you a check. You can do some negotiating here since you are saving them the leg work involved in disposing of the totaled vehicle. Plus, they’re getting the price they expect. An auction may be weeks or months away, so they don’t have to pay for storage either. Additionally, the auction brings them a higher amount, but it’s just as likely to be lower.

The Department of Motor Vehicles (DMV) for your area will issue you a salvage title, and you can then do as you wish with the car. You may choose to fix it up and have the title change from salvage. If you have a similar vintage car, you could use it for parts. If you’re mechanically inclined and conversant in internet sales, you could make money selling parts to other car enthusiasts. Alternatively, you may choose to sell it for salvage and hope to do better than the insurer.

If you choose to sell the car for the vehicle salvage value, contact us at junkcarsus.com. We offer top dollar, free pick up, and we handle the paperwork too!

Edgar Moulton.

22.09.2021

Edgar Moulton. Car Expert

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