It's hard to say goodbye to someone you love -- even if it's a
car. Seeing your totaled car go to the scrap heap after a crash can
be difficult, especially if you've put money into it, customized
it, named it or washed it every weekend.
Letting your auto insurer take the totaled car can be even more
difficult if it's an older car that's still drivable. (See "
How the recession totaled your car
There are options, though they're not as easy as getting a check
from your insurer and walking away. Here are five things to do with
a totaled car, starting with what most people do:
1. Take the money.
After an accident, your insurer or the at-fault driver's insurer
will tell you the vehicle's
actual cash value
, then make its decision to total the car based in part on how much
repairs will cost. Simply put, it writes a check when the car is
not worth fixing.
Insurance companies have their own formulas and states have
their own thresholds for declaring a car totaled -- from damage
that reaches 51 percent of a car's value to totaling at the
A totaled car doesn't have to look like a burned-out shell that
has been smashed flat. What looks like minor damage to an older car
can be an expensive repair that's worth more than the value of the
car. The same damage on a newer Mercedes might also be an expensive
repair, but the car is still worth a lot more money than the repair
Once value is determined, insurers will pay you that amount,
minus the deductible if the claim was made against your own policy.
The insurer just bought your car from you, and it gets the car's
title. If you still have a car loan, you're responsible for paying
it off with that money. (And if you come up short of what's owed, a
gap insurance policy
comes in handy.)
2. Keep it and fix it.
If the car can still be safely driven, or at least towed to a
repair shop, you might want to keep it.
You can simply not file a claim at all, choosing instead to live
with some cosmetic damage and make small safety repairs on your own
dime. Especially for older cars, a claim may not get you enough
money to buy something that's more reliable than the dented but
safe ride you now have.
If you do file a claim, your insurance company makes a lot of the
decisions from that point.
You might be able to keep the car, but the insurance company
would deduct the car's salvage value -- usually a few hundred
dollars at minimum -- plus any deductible if the accident was your
fault. You would get a check for the remainder and a
You can't always buy the car back, though.
"If you're getting paid by the insurer, you can't keep your
wheels," at least in Illinois, says Lynette Simmons Hoag, a Chicago
Assuming you do buy the car back, you'll have to get a rebuilt
title and prove the car roadworthy. If you have a friend who is a
mechanic, or can do the work yourself, fixing a totaled car may be
Laws vary by state on rebuilt titles. Illinois, for example,
doesn't allow them, Simmons Hoag says. But Illinois drivers get
around the law by having them rebuilt in neighboring Indiana.
It may be hard to get insurance on a rebuilt car. Some carriers
won't insure them at all and others offering only liability
coverage, excluding collision and comprehensive.
While it may make more financial sense to rebuild a new,
expensive car that has been totaled, an old car may be worth it if
you can do it cheaply enough, says Thomas Simeone, a Washington,
D.C.-based personal injury attorney. "With a lot of older cars,
even though it's 'totaled,' you can still fix it," Simeone
3. Keep it and don't fix it.
Something as simple as a long, nearly invisible scratch can cost
only $600 to repair but require a $5,000 paint job to look right,
which is what Dane Dingerson once found with a totaled car.
Dingerson, a Kansas City resident who buys totaled exotic cars with
salvage titles and restores them, says he rubbed out the scratch
and ignored the small part that was still visible, and didn't have
Hail can damage a car so much that it's totaled, but still able
to drive with a dented roof and hood, says Bob Keith, senior
director of education and training at Carstar, a body shop network
based in Overland Park, Kansas.
"You've got a car that runs OK and you don't care if it looks
like a golf ball, and you're just going to drive it to work," Keith
4. Keep and sell for salvage.
While it's unlikely that you'll get more money than your insurer
would by selling the car for scrap or parts, you can buy the car
from the insurer and take a crack at it yourself. You may need the
parts for another car you have. Or it's a hobby. Keith, the body
shop expert, says he's seen few people do this. "The majority of
folks just write it off and let the insurance company take care of
it," he says.
5. Donate it.
Donation services will tow the car for free and sell it for parts,
and you'll get a tax deduction for the depreciated value, says Ari
Teman, founder of an international conference on nonprofit