A car is “totaled” after any damage, such as that caused by a wreck, if the insurance company that covers it decides that its repair would not be financially feasible. To put it simply, if the total cost of repairs is higher than 50% of the price that the vehicle can fetch after repairs, it is totaled. The insurance company decides about this based on the car’s value, number of miles on it, and the actual repair costs.
Since the recession of 2008, the number of totaled cars has increased despite a progressively lesser number of fatal accidents in the same period. Recession has affected the value of cars and if you are confused about what to do if your car is totaled after a wreck, here are some ideas you can consider:
Take the check if you can afford another car
Insurance companies in different states have varying formulae and cost thresholds to determine whether a car is totaled or not. While some states leave it to the insurer’s discretion, others specify 51% of a car’s value as the threshold for the totaling of damaged cars. Remember, a totaled car may not actually look like a wreck but its damage can still be worth more than 50% of the car’s market value. Under these circumstances, it might be a good idea to take what your insurance company is willing to offer for it. Now, you can buy a new car, or even a salvaged one in good running condition.
Consider totaled cars at a damaged cars online auction
Many people buy wrecked cars that were totaled by insurance companies. You will be surprised to find that some totaled cars may not look great but are in good drivable condition. Look for these at an online damaged cars auction. Consider this: fixing a long scratch on a car can cost $5000 to make it look as good as before, but it may only cost $600 for repairs to make it usable.
On a reputable online auction for totaled cars, check out the damage type section of available cars. Look for cars that are in drivable condition with only superficial damage, or minor engine damage that can be repaired by your trusty mechanic friend at a lesser price.
Insurance Auto Auction 