How Much Is a Wrecked Car Worth?

The value of a wrecked car is the same as its salvage value.

What Is Salvage Value?

Salvage value is how much a salvage or totaled car is worth. Typically, it is worth 20 to 40 percent less than its Kelley Blue Book (KBB) value. However, to determine its true market value, you’ll need to have the car privately appraised.¹

Salvage Value Formula

To calculate the salvage value, you can use the salvage value formula.

1. To start, you’ll need to find out the car’s retail and wholesale value either from KBB or NADA, the National Auto Dealers Association. These platforms provide both retail price and wholesale values based on factors such as make, model, year, mileage, and condition.
2. Add the retail value (what you paid at the dealership) to the wholesale value (what the dealer paid for it from the manufacturer).
3. Divide the sum by two to obtain an average, representing the vehicle’s fair market value.
4. Next, find out what percentage of your car’s value would need to be lost for the car to be declared a total loss. For example, if the total loss threshold is 75 percent, find out what 75 percent of the fair market value would be.
5. Subtract that difference from the fair market value to find the salvage value.

Salvage Value vs. Actual Cash Value

Actual cash value (ACV) is how much your car is worth today, which is different from the price you bought it for. Vehicles depreciate in value as soon as you drive them off the dealership lot and more over time. If your car is declared a total loss, your insurance company would pay you for the vehicle’s ACV minus your collision or comprehensive deductible. Its salvage value, however, is its ACV after it’s been declared a total loss.

Wholesale Value vs. Market Value

Wholesale value has two meanings when it comes to cars. It could mean either what a car is worth at auction or what a dealership paid a manufacturer for the car. Market value, on the other hand, is what you could get for a car if you sold it on your own.³

A salvage vehicle is a vehicle that has been totaled, meaning its estimated repair costs are higher than its ACV.

When Is a Car Totaled?

A car is totaled when any of the following situations occur:

• The vehicle cannot be repaired safely.
• The repairs cost more than the vehicle’s ACV.
• The damage meets your state’s total loss threshold, which you can find below.

Keep in mind that thresholds can change, and insurance companies may have their own policies for determining total loss within the bounds of state regulations.

How a Car Becomes a Salvage Title Vehicle

A car becomes a salvage vehicle when an adjuster inspects it and determines that it meets a state’s total loss guidelines. In that case, the car insurance company determines that the state should issue a salvage title, meaning it’s not repairable.

Common causes of total loss include:

• Head-on collisions
• Rollover accidents
• Severe weather events, like tornados, hurricanes, and flooding
• Side collisions
• T-bone crashes
• Hitting an object

Common Issues With Salvage Cars

Declaring a car to be a total loss means the vehicle has serious damage, such as:

• Blown engine
• Body damage
• Broken or bad brakes
• Broken transmission
• Dead battery
• Faulty electrical systems
• Fuel system issues
• Issues with safety features such as airbags
• Significant frame damage, like doors and windows not shutting properly

Can you insure a salvage vehicle? The short answer is no. To insure a damaged car, it must be sufficiently repaired by a licensed repair specialist and pass inspection.⁴ It could then receive a rebuilt title, but not all insurers will insure a rebuilt title vehicle and those that do may charge more.

How Car Insurance Companies Pay Property Damage Claims

Typically, insurance companies pay property damage claims by reimbursing you for the costs of the required repairs, either through a check or a direct deposit. Alternatively, your insurer may pay the repair shop directly, especially if the shop is part of the insurer’s network (also known as a direct repair program).

How Much to Expect From an Insurance Settlement

If your vehicle is declared a total loss, the insurer generally pays the actual cash value (ACV) of the car, minus any applicable deductible. This assumes you hold collision and comprehensive coverage. For financed or leased vehicles, the payment often goes directly to the lender to settle the remaining loan balance, with any surplus sent to you.

Some insurers offer new or better car replacement coverage. If you have opted for that add-on, your insurance company will pay to replace your car with a new or similar car of the same make and model if your car is totaled in a covered accident.

How to Fight a Total Loss Settlement

If you don’t agree with your total loss settlement and believe your car is worth more than the insurance company declared, follow these steps to fight it.

• Hire your own appraiser. To prove that your car has a higher value, you’ll need an appraiser to oversee a vehicle inspection and prepare a report. The appraiser will have a mechanic inspect the car, take photographs, and provide evidence of its worth and/or repair costs using maintenance records and other documentation of upgrades.
• Hire a lawyer and negotiate. Use the appraiser’s evidence to negotiate with your insurer or, better yet, hire a lawyer to do it for you.
• Contact your state’s department of insurance. If the negotiations aren’t successful, file a complaint with your state’s insurance commissioner using the contact information below.⁵

All hope is not lost if your car is totaled. In some cases, you may be able to make money from it.

Should You Repair or Sell Your Salvage Vehicle?

If you believe your car’s salvage value is greater than the settlement offer you received, you may be able to make money by repairing and selling the vehicle. However, if the settlement offer was fair, it’s best to accept it and move on.

Selling Your Salvage Car for Cash

Another option is to sell your salvage vehicle as is through third parties like Cash for Cars, Car Brain, Copart Direct, and Salvage Reseller. You can also sell it yourself as a private seller using Craigslist or Facebook Marketplace, although this will take more time and effort on your part. A third route is to sell it to a scrapyard directly. For compensation, you’ll receive the resale value, or what you sold your salvage vehicle for.

Car ownership is one of the largest expenses most people face after housing, so it’s no surprise that dealing with a totaled car can feel overwhelming. However, with the right insurance coverage—like collision, comprehensive, or new/better car replacement—you can recover your car’s actual value and lessen out-of-pocket expenses. Beyond insurance, you’ve got other options, too. You might donate it for a tax deduction or sell it to a buyer or scrapyard.

Choosing the best option depends on your situation. If you’re considering a non-insurance route, be prepared to invest more time, effort, research, and money up front. For example, while repairing and reselling your car is a possibility, it will require hiring a licensed repair specialist, passing inspections, and spending money upfront. In many cases, this route may not be worth the effort, especially if your insurance company offers you a fair settlement. Taking the time to explore your options will help you make the most of this challenging situation.

Learn more about how auto insurance claims work and how long an insurance claim takes to process.