When Repairs Cost More than the Car
You've recently had an accident, and your insurer gives you a repair estimate. The bad news is that the repair costs exceed the actual cash value of the vehicle. When this happens, your insurer will most likely declare the car a total loss. In that case, your insurer will send you a check for the cash value of the vehicle, and you will have to purchase a new car. Read on for more information on what to do when repair costs exceed the value of the vehicle.
If You Want to Keep Your Car
If for some reason you are extraordinarily attached to your vehicle and would like to keep it, you have several options. First, you could try to get one or two more estimates from other body shops. You may be able to find a shop that could perform the repair work for less money than the vehicle is worth. If so, your insurer may agree to allow you to repair it instead of totaling it out. Secondly, you could accept your insurer's check for the total loss and ask to keep the totaled vehicle yourself. Usually, insurers take the damaged vehicle and sell it for parts in order to recoup some of the costs. If you want to hold on to the car and try to repair it yourself, you may be able to do so if you are willing to accept a slightly smaller settlement amount. The insurer will have to deduct from your settlement the amount they would've gotten from salvaging whatever parts they could.
When You're Ready to Buy New
You've gotten several repair estimates, and it looks like it's time to say goodbye to your old car and resign yourself to the total loss. When this happens, your insurer will provide you with an estimate of what they think your car is worth. This number will be based on private party sales, surveys of dealers, value guide books, and more.
Remember that you don't have to accept the first figure your insurer quotes you and move on. Do your own research on your car's actual cash value (ACV) using online pricing sites, the Kelley Blue Book, and other tools. If you come up with a figure that is significantly higher than your insurer's, you can request that they adjust their estimate. You will strengthen your case if you can present documentation supporting what you believe your car is worth. For an especially compelling case, you might consider hiring an independent appraiser to give you an estimate. You can then submit this estimate to your insurer when you request an adjustment to your settlement. Keep in mind that the more you can prove your car is worth, the bigger your settlement check will be.