Can I Keep My Total Loss Car?

Car that has been in an accident.
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You have recently been in a car accident. It was pretty scary, but fortunately, no one was injured. Your car, however, is a different story. It was looking pretty banged up when they towed it away, and you know that it is going to cost an arm and a leg in repairs. But thankfully, that’s not really your problem, is it? You have full collision coverage with zero deductible, and that means your insurance company is responsible for the cost of repairs. It’s just a matter of time until your baby is back with you, fully functioning, safe and sound, ready to hit the open road.

And then you get the call. It’s your car insurance agent and he has bad news. Your insurance provider has determined that your car is a “total loss” and is on its way to the junk heap. You’re devastated, and in the back of your mind, you just know that somehow, there must be a way to make sure your precious ride will be coming back to you.

Only wishful thinking, right? Not necessarily. There’s a very good chance that you may be able to stop the tow truck before it hits the salvage yard and bring your car home. So, if you are wondering if you can keep your total loss car, the answer is probably “yes”. The big question to ask yourself, however, is: Do I really want to?

What Does "Total Loss" Mean?

There’s a reason that your insurance agent assumed that you’d be okay with sending you wrecked car to the junkyard -- the reason that insurance providers label cars as a total loss is because it’s just not worth the money it would take to repair it.

Specific definitions can vary from state to state and from insurer to insurer, but generally, a vehicle is a “total loss” when the cost to repair it is greater than its cash value at the time of the accident. 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 should definitely 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 and, well, that’s pretty much it. 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. Then they will auction off the vehicle for its salvage value.

Reasons You May Want to Keep Your Total Loss

There are several reasons why you might want to keep possession of a vehicle after it has been labeled a total loss. Maybe you would like to salvage it yourself for the spare parts. Or create a piece of kinetic sculpture. The most likely reason, though, is that you believe it can be repaired and brought back to a safe-running condition. And you might be right. But there are several factors you should seriously consider when making your decision.

Check Repair Costs

You must carefully examine the vehicle to determine how much repairs will cost. If you are not an expert mechanic, be sure to get the opinion of one. A mistake in your repair estimate could be fatal -- financially, that is.

Will You be Able to Pass a DMV Inspection?

Consider the difficulty you may face in getting the DMV to approve the repairs and re-brand the title as a “rebuilt”. You will have to get your repaired vehicle inspected by them and if they don’t sign off, you will not be able to drive your car on publicly owned roads.

Salvage Title Insurance

You may have trouble finding a carrier willing to insure your repaired vehicle -- and you will definitely 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.

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 (some do), 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.

Do Not Forget Your Financing

Before you get too excited about bringing your baby back home, be sure that you actually own it. Remember, if the vehicle is financed or leased, it may not be yours to keep -- the one footing the bill (usually a financial institution) will have the final say.