You may need to estimate the salvage value for a vehicle that has undergone an accident and sustained damaged beyond repair. Generally, insurance companies write off a car as "totaled" when the cost of repairs exceeds vehicle's actual "blue book" value. Estimating the salvage value of a vehicle is not a perfect science; much of the process depends on the insurance company, as well as the mileage and condition of the vehicle at the time of the accident. However, you can estimate a rough salvage value of a "totaled" vehicle.
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Look up the vehicle's make and model online at the Kelley Blue Book website to determine its base retail value (see link in Resources section).
Research the vehicle's current market value online at the Auto Trader website (see link in Resources section). Look for vehicles of the same make and model and with similar mileage. Take into consideration the general condition of the vehicle at the time of the accident. These two steps will yield a fairly accurate estimate of the vehicle's current market value.
Consult with the insurance company to obtain its salvage estimate. Ideally, the insurance company will pay out an amount that will replace the salvaged vehicle with an equivalent make and model.
Visit local salvage wrecking yards to obtain a salvage estimate of the vehicle if it is uninsured. Salvage companies usually offer 15 to 20 per cent of the current retail value of the vehicle.
Tips and warnings
- Insurance companies do not have a set formula to follow for determining salvage value, and salvage estimates will vary from one insurance company to the next.
- Insurance companies generally calculate the value of a vehicle at the time the car was "totaled" based on a combination of factors such as the vehicle's condition at the time of the accident, the current blue book value, the current dealer resale value, salvage values and newspaper listing prices.
- When paying out for a replacement vehicle, the insurance company will retain the salvaged vehicle and sell it off to a wrecking yard.
- You can retain ownership of the salvaged vehicle. In this case, the insurance company will deduct the salvage value of the wreck and deduct it from the insurance payout.
- Prices obtained from salvage wrecking yards will vary and will depend on the popularity of the vehicle and whether its salvaged parts are in demand for resale.
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