Can I Keep a Car Deemed a Total Loss?

Car that has been in an accident.
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If you recently have been in a car accident and your insurance provider has determined that your vehicle is a “total loss,” you still may be able to bring your car home before it hits the salvage yard. The big question to ask yourself, however, is if you really want to keep it.

Insurance providers label cars as total losses if the cost of repairs is more than the value of the vehicle at the time of the accident. Specific definitions can vary from state to state and from insurer to insurer. Additionally, if your insurer decides that the damage to your car is so substantial that it cannot be repaired safely, it will be deemed a total loss, cost considerations aside. If that is the case, you definitely should cut your losses and gratefully cash the check your insurance company sends you.

In most jurisdictions, once your insurer decides to write off your vehicle as a total loss, its title is branded as a salvage. Your carrier will determine the actual cash value of your car, taking into account its make and model, mileage, condition, and options, and cut you a check. The insurer then will auction off the vehicle for its salvage value.

Keeping Your Totaled Vehicle

The two main reasons to keep a totaled vehicle are to salvage it yourself for the spare parts or because you believe it can be repaired and brought back to a safe driving condition. You might be right, but consider these factors before making your decision.

  • Repair costs: This is the big one. If the insurance company doesn't think repairs are worth it, you have to be sure that you can get actual value out of the vehicle. If you are not an expert mechanic, be sure to get the opinion of one. However, one of the few ways such a vehicle can be worth keeping is if you are a mechanic and can do the repairs yourself for significantly less than it would cost to pay another mechanic.
  • Passing inspection: You may face difficulty getting your state's department of motor vehicles to approve the repairs and re-brand the title as a “rebuilt." You will have to get your repaired vehicle inspected, and if they don’t sign off, you will not be able to drive your car on publicly owned roads.
  • Insurance: You may have trouble finding a carrier willing to insure your repaired vehicle—and you definitely will find it impossible to locate an insurer willing to insure your vehicle before repairs have been made. Insurance companies are reluctant to write a policy on a car once it has been branded a salvage vehicle.
  • Financing: Don't get too excited about bringing your baby back home if you don't actually own it. Remember, if the vehicle is financed and you haven't paid it off, it may not be yours to keep. The financial institution that holds the loan will have the final say.

    If You Still Want to Keep Your Car

    If you still can’t bear to part with it, and your state doesn’t prevent it, you should be able to come to an arrangement with your insurer to keep your beautiful wreck. Your carrier will determine payment on your accident claim the same way it would if you were not keeping your car, except that the settlement amount will be decreased by the vehicle’s salvage price.