Is It Better for Your Car to Be Totaled or Repaired After an Accident?

What Determines if a Car is Totaled or Repairable?

Insurance companies use different methods to determine whether a car should be totaled or repaired:

Total Loss Threshold: Some states have a set percentage (usually 70-75%) of the car’s actual cash value (ACV). If repair costs exceed this threshold, the car is considered totaled.

Total Loss Formula: Other states use a formula where if the cost of repairs plus the salvage value exceeds the ACV, the car is declared a total loss.

Constructive Total Loss: In some cases, even if repair costs are less than the ACV, an insurer may still declare a car totaled if the repairs would take too long or if there are safety concerns.

Advantages of Having Your Car Repaired

You keep your familiar vehicle
Potentially lower out-of-pocket expenses
No need to shop for a new car
Avoid depreciation hit of a salvage title

Advantages of Having Your Car Totaled

Opportunity to upgrade to a newer, safer vehicle
Avoid potential ongoing issues with a severely damaged car
Possibly receive a larger insurance payout
Escape from an upside-down car loan situation

Factors to Consider

Vehicle Age and Value: Older cars with lower values are more likely to be totaled.

Extent of Damage: Severe structural damage often leads to totaling.

Your State’s Laws: Regulations vary by state and can affect the total loss determination.

Your Insurance Coverage: Comprehensive and collision coverage play a role in how your claim is handled.

Personal Preference: Sometimes you can influence the decision if you have a strong preference.

What If You Disagree with the Insurance Company’s Decision?

If you believe your car should be repaired when the insurer wants to total it (or vice versa), you have options:

Negotiate: Present evidence of your car’s higher value or lower repair costs.

Get an Independent Appraisal: This can support your case for repair or total loss.

Retain and Repair: You may be able to keep a totaled car and repair it yourself, but be aware of salvage title implications.

File a Complaint: If you feel the insurer is acting in bad faith, you can file a complaint with your state’s insurance commissioner.

Remember, the best outcome depends on your individual circumstances. Consider factors like your car’s sentimental value, your financial situation, and your long-term transportation needs when deciding whether to push for repair or accept a total loss settlement.