Repair or Buy New After a Total Loss Car Accident?
You have just gone through the horrific experience of being involved in an auto accident. You’re very stressed and may have injuries that need attention, now you also have to deal with the possibility of your car being totaled.
A car crash is a nightmare for anyone. Let’s look at what to do after a total loss car accident and how the process works, as well as how a totaled car value calculator can help.
First Steps After an Auto Accident
There are some fundamentals that you need to do after you have had an auto accident:
- Report the incident to your insurance company immediately and log a claim.
- Get the vehicle towed to a body shop that is on your insurance company’s preferred list.
- Find your title, as you will need this if your car is totaled.
- If you have a loan on your car, check how much you still owe.
- Use a totaled car value calculator to determine the value of your vehicle to get a totaled car estimate.
The above steps will help assess the damages to your car, and the value it has left. Usually there are certain predetermined factors to determine your car’s value, such as the severity of the accident, whether the airbags were deployed, and if the repairs will cost more than the value of the vehicle.
So What Do You Do if Your Car is a Total Loss?
Should you come out of pocket to repair the damage or simply buy a new car? Well here you need to be savvy and challenge the insurance company if you feel like the adjustor’s value is too low.
If you can find evidence of a similar car for sale that is a higher price, then you can explain this and provide it to your insurance company.
Bear in mind that cars depreciate and insurance companies will always look at varying criteria to declare a total loss and determine the totaled car value. In order to calculate your totaled car value, an easy formula to use is to take the Kelly Blue Book value of your vehicle in fair condition and calculate between 20% and 40% of this amount.
This rough calculation will give you an idea of how to work out the total loss value. Insurance companies will then look at the current market cash value of the car, and they will take into account the condition of your specific vehicle, by looking at the mileage, trim, other added features, and other repairs that occurred pre-accident. The insurance company will also deduct the costs for title, registration, and sales tax in certain states.
Remember, if you still owe a lot of money on your vehicle, the insurance company won’t pay you for the amount. It is therefore wise to have GAP insurance (Guaranteed Auto Protection) if you have a fairly new vehicle. Additional insurance is there to give you a cushion, so if you are involved in a total loss car accident, the negative equity is then covered.
Can You Get Your Vehicle Back?
You will have to hand over your car’s title to your insurance company in the case of a total loss, but by using a totaled car value calculator you can decide if it is worth buying back from the salvage yard when they auction it. If, for instance, the airbags deployed, but there is no other major damage, the car will still be in drivable condition. Airbags are relatively expensive to repair, which is why insurance companies usually just declare the car a total loss. Some states will allow you to keep your car, but will deduct the fair market salvage value from your payout. Additionally, you will receive a salvage title, and you can only apply for a new title once all the repairs are done.
Weigh the costs of fixing your car versus buying a new car with the insurance payout. So, yes, you can get your vehicle back, but the question is do you want to?
Other Factors to Consider
Let’s look at this in more detail. You must remember that there are some other costs to consider when you are in a total loss car accident. These are likely:
- The towing company costs.
- Temporary car rental costs.
- Disposal of your vehicle if necessary.
Adding in all of the above, is it still worthwhile buying back your car and repairing it yourself? Or should you simply buy a new car? Using calculators like salvage calculators and totaled car calculators can help you to get the most accurate prices to make your decision. Ultimately, it will come down to how badly your car was damaged and how valuable your car was to begin with.
Can You Repair Your Car For a Good Price?
If you can do easy, quick repairs that don’t compromise the safety of your vehicle, then your car may be worth salvaging. However, make sure you find out what these costs will be because generally the insurance adjuster has crunched the numbers and has declared your vehicle a total loss due to the fact that repairs are going to cost more than what your vehicle is worth. If you can arrange cheaper repairs, then this might be something to consider.
Should You Just Buy a New Car?
Buying a new car comes with its own set of challenges. First, the price of the car will be higher than the payout you have received from your insurance company. You will either have to pay in extra or take out another loan. You can also opt to purchase a vehicle of a lower value and compromise on the size, model and extra features you may have had before. Many people find this the easiest route to take, however, if you are someone who likes to be frugal and wise with their money, then comparing the costs of each option is a good idea.
Repair or Buy New – Final Thoughts
At the end of the day, the decision whether to repair your vehicle or buy a new one comes down to the numbers.
Repairing your car will:
- Allow you to keep a car that may have sentimental value.
- Allow you to save money, as you may be able to arrange cost effective repairs.
- Prevent you from having to go car shopping.
- Prevent you from having to take out another loan, at a possibly higher premium.
Buying a new car will:
- Ensure that you have a new, safe vehicle, free from damages.
- Possibly save you money due to the cost of repairs to your totaled vehicle.
- Be an easier process.
- Allow you to get on the road faster and spend less money on a car rental, as repairs could take a fairly long time.
Some last pieces of advice if you are involved in an auto accident, try to get all your paperwork, photos, and other information to your insurance company as soon as possible to receive your payout as soon as possible. An auto accident lawyer may be helpful if you are still confused about the legal process.