Insurance Wants to Total My Car but I Want to Keep It. Can I?
Last Updated on August 14, 2020
If your vehicle is totaled in an accident, you might feel as though it does not warrant the “totaled” label. Even if you feel the vehicle is rightfully described as totaled, you still might desire to keep it. Perhaps you feel as though you can salvage the vehicle or its parts. Maybe you are sentimental about your ride. Let’s take a look at whether it is possible to keep a totaled vehicle.
Why a Total Loss Might be Declared
Auto insurance providers categorize vehicles as total losses if the money required for the necessary repairs is greater than the vehicle’s value at the time of the collision. However, the exact definition of a total loss ultimately hinges on the insurance provider as well as the state. If the insurance provider determines damage to the vehicle is significant to the point that it cannot be repaired in a safe manner, it will be considered a total loss.
Driving a Vehicle Declared a Total Loss
If your vehicle is declared a total loss, you cannot drive it right away. The vehicle must be properly repaired in order for you to be able to take it back on the road. This means the vehicle will have to be towed to an auto body shop and repaired to the point that it passes state inspection for use on the roads. Once the auto insurance provider determines the vehicle is a total loss, you will be provided with a cash offer settlement. This figure is the actual cash value (ACV) of the vehicle with the salvage value tacked on. If you take this offer, you are essentially agreeing to sell the vehicle to the insurance company. The insurer salvages the vehicle for parts at their current value.
Keeping the Vehicle After it has Been Totaled
There is also the option of keeping or “buying” the vehicle after it has been declared a total loss. If you keep your vehicle, the insurance provider will still pay you the vehicle’s ACV. They will simply deduct the vehicle’s salvage value from the ACV check you would have received. This salvage value is the amount the insurance company would have received for the totaled vehicle at auction
For example. If your vehicle’s ACV before getting totaled was $15,000, and the current salvage value of the vehicle is $3,000, the insurance company will give you a $12,000 check along with your totaled vehicle.
As noted above, however, the vehicle will be reported as a total loss to the state department of motor vehicles. Therefore, if you do not pay the money necessary to get your ride back in functional condition, you will not be able to legally drive it.
Those who keep their totaled vehicles will be provided with a salvage title. In other words, the salvage title states the vehicle’s only utility or value is in its parts. It is not legal to drive such a vehicle on the road as it has been deemed totaled or unsafe.
Clearing the Salvage Title
If you would still like to drive your vehicle at some point down the line, you will have to clear the salvage title. Elect to keep the vehicle and accept its cash payout at ACV and you will be able to use this money to cover the cost of repairs. However, you will not be able to operate the vehicle while there is a salvage title. The vehicle must be towed to the repair garage for the appropriate repairs to be made.
Once the repairs are performed, it is time to apply to have the salvage title cleared. This requires a towing of the vehicle to the motor vehicle agency operated by the state. Pay the fee necessary for inspection and cross your fingers. Hopefully, your vehicle will clear salvage title, be provided with a new title, and be completely legal to drive. However, even if your vehicle is provided with a new title, it does not eliminate its history. The fact that the vehicle was once totaled will likely dissuade others from bidding on the vehicle unless the repairs greatly enhanced the vehicle. The bottom line is potentially interested buyers will find out about the vehicle’s true history when the time comes to sell.
Is It Wise to Drive a Car After Being Declared a Total Loss?
There is nothing wrong with desiring to drive your vehicle after it has been declared a total loss by the insurance company. After all, you likely had some good times in your ride. However, there is an element of risk in owning a vehicle that has been totaled, even if it is subsequently cleared for driving after repair. There is a chance that damage remains even after the appropriate repairs are made. There might be unseen structural issues with the frame, compromised airbags, loose wires, or other problems. If such issues are present, the vehicle will prove risky to drive no matter how solid the repairs are.
Few people are aware of the fact that an inspection performed to clear a vehicle’s title is merely an inspection to determine if stolen parts are in use. This inspection does not do much more to gauge if the ride is safe or unsafe. Therefore, even if your vehicle passes the state inspection following its status as a total loss, you should still have it analyzed by a savvy mechanic.