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Last updated: November 16, 2023
How Much Is a Wrecked Car Worth?
Believe it or not, a wrecked car could actually make you money.
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You may think a wrecked car is a hunk of junk. However, in some cases, you may be able to sell it for salvage parts from the comfort of your home.
A salvage vehicle is also known as a totaled car, but each state has its own threshold for what qualifies as a total loss. If your car meets the threshold, what should you do with your salvage vehicle? Is it worth selling, or should you send it to the junkyard? Let’s investigate.
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How Much Is a Wrecked Car Worth?
How much a wrecked car is worth 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. 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. Add the retail value (what you paid at the dealership) to the wholesale value (what the dealer paid for it from the manufacturer). Divide the sum by two to get the fair market value.
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. 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.2 Market value, on the other hand, is what you could get for a car if you sold it on your own.3
What Is a Salvage Vehicle?
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.4
| States | Car total loss threshold |
|---|---|
| Alaska, Arizona, California, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Maine, Massachusetts, Mississippi, Montana, New Jersey, New Mexico, Ohio, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington | Total loss formula (salvage value is less than cost of repair) |
| Colorado, Texas | 100% |
| Florida, Missouri, Oregon | 80% |
| Alabama, District of Columbia, Kansas, Kentucky, Louisiana, Maryland, Michigan, Nebraska, New Hampshire, New York, North Carolina, North Dakota, South Carolina, Tennessee, Virginia, West Virginia, Wyoming | 75% |
| Arkansas, Indiana, Iowa, Minnesota, Wisconsin | 70% |
| 65% | |
| Oklahoma | 60% |
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 insurance company determines that the state should issue a salvage title, meaning it’s not repairable.
But what would cause such damage to a car? Most commonly:
- Head-on collisions
- Rollover accidents
- Severe weather events, like tornados, hurricanes, and flooding
- Side collisions
- T-bone crashes5
- Hitting an object
Common Issues With Salvage Cars
Declaring a car to be a total loss means the vehicle has some pretty severe 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 airbags6
- Significant frame damage, like doors and windows not shutting properly
Insuring Salvage Vehicles
Can you insure a salvage vehicle? The answer is no. To insure a damaged car, it must be sufficiently repaired by a licensed repair specialist and pass inspection.7
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.
TIP:
Make sure your repair shop is in-network to get the largest reimbursement.
How Much to Expect From an Insurance Settlement
If your insurance company declares your car to be a total loss and you have collision insurance or comprehensive coverage, you can expect to receive your car’s ACV in your settlement. However, if you have new-car-replacement coverage, you’ll get back the total cost of what you paid for the vehicle originally; i.e., the car’s price before depreciation.
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.8
| Insurance department contact information by state | URL | Phone number | Mailing address |
|---|---|---|---|
| Alabama | http://www.aldoi.gov | 334-269-3550 | 201 Monroe Street, Suite 502
Montgomery, Alabama 36104 |
| Alaska | https://www.commerce.alaska.gov/web/ins/ | 907-269-7900 | 550 West 7th Avenue, Suite 1560
Anchorage, Alaska 99501-3567 |
| Arizona | https://insurance.az.gov/ | 602-364-3100 | 100 N. 15th Avenue, Suite 261
Phoenix, Arizona 85007-2630 |
| Arkansas | https://insurance.arkansas.gov/ | 501-371-2600 | 1 Commerce Way
Little Rock, Arkansas 72202 |
| California | http://www.insurance.ca.gov | 800-927-4357 | 300 South Spring Street, South Tower
Los Angeles, California 90013 |
| Colorado | https://doi.colorado.gov/ | 303-894-7499 | 1560 Broadway, Suite 850
Denver, Colorado 80202 |
| Connecticut | https://portal.ct.gov/cid | 860-297-3900 | 153 Market Street, 7th Floor
Hartford, Connecticut 06103 |
| Delaware | https://insurance.delaware.gov/ | 302-674-7300 | 1351 West North Street, Suite 101
Dover, Delaware 19904 |
| District of Columbia | http://www.disb.dc.gov | 202-727-8000 | 1050 First Street NE, 801
Washington, D.C 20002 |
| Florida | http://www.floir.com | 850-413-3140 | The Larsen Building, 200 East Gaines Street
Room 101A Tallahassee, Florida 32399-0301 |
| Georgia | https://oci.georgia.gov/ | 404-656-2070 | 2 Martin Luther King Jr. Dr. West Tower, Suite 702
Atlanta, Georgia 30334 |
| Hawaii | http://cca.hawaii.gov/ins/ | 808-586-2790 | P.O. Box 3614
Honolulu, Hawaii 96811 |
| Idaho | http://www.doi.idaho.gov/ | 208-334-4250 | 700 West State Street, 3rd Floor
Boise, Idaho 83720-0043 |
| Illinois | https://insurance.illinois.gov/ | 217-782-4515 | 320 West Washington Street
Springfield, Illinois 62767-0001 |
| Indiana | http://www.in.gov/idoi | 317-232-2385 | 311 West Washington Street, Suite 300
Indianapolis, Indiana 46204-2787 |
| Iowa | https://iid.iowa.gov/ | 515-654-6600 | 1963 Bell Avenue, Suite 100
Des Moines, Iowa 50315 |
| Kansas | https://insurance.kansas.gov/ | 785-296-3071 | 1300 SW Arrowhead Road
Topeka, Kansas 66604-4073 |
| Kentucky | https://insurance.ky.gov | 502-564-3630 | 500 Mero Street 2 SE 11
Frankfort, Kentucky 40601 |
| Louisiana | http://www.ldi.la.gov | 225-342-5423 | 1702 North Third Street
Baton Rouge, Louisiana 70802 |
| https://www.maine.gov/pfr/insurance/ | 207-624-8475 | 34 State House Station
Augusta, Maine 04333-0034 |
|
| Maryland | http://www.mdinsurance.state.md.us | 410-468-2090 | 200 St. Paul Place, Suite 2700
Baltimore, Maryland 21202 |
| Massachusetts | https://www.mass.gov/orgs/division-of-insurance | 617-521-7794 | 1000 Washington Street, Suite 810
Boston, Massachusetts 02118 |
| Michigan | https://www.michigan.gov/difs/ | 517-284-8800 | 530 West Allegan Street
Lansing, Michigan 48933 |
| Minnesota | https://mn.gov/commerce/industries/insurance/ | 651-296-4026 | 85 7th Place East, Suite 500
St. Paul, Minnesota 55101 |
| Mississippi | http://www.mid.state.ms.us | 601-359-3569 | 1001 Woolfolk State Office Building, 501 North West Street
Jackson, Mississippi 39201 |
| Missouri | https://insurance.mo.gov/ | 573-751-4126 | 301 West High Street, P.O. Box 690
Jefferson City, Missouri 65102-0690 |
| Montana | https://csimt.gov/ | 406-444-2040 | 840 Helena Avenue, Suite 270
Helena, Montana 59601 |
| Nebraska | https://doi.nebraska.gov/ | 402-471-2201 | Terminal Building, 941 O Street, Suite 400
Lincoln, Nebraska 68508-3639 |
| Nevada | https://doi.nv.gov/ | 775-687-0700 | 1818 East College Parkway,
Suite 103 Carson City, Nevada 89706 |
| New Hampshire | https://www.nh.gov/insurance/ | 603-271-2261 | 21 South Fruit Street, Suite 14
Concord, New Hampshire 03301-7317 |
| New Jersey | https://www.state.nj.us/dobi/index.html | 609-292-5360 | 20 West State Street
P.O. Box 325 Trenton, New Jersey 08625 |
| New Mexico | https://www.osi.state.nm.us/ | 855-427-5674 | 1120 Paseo de Peralta, Suite 428
Santa Fe, New Mexico 87501 |
| New York | https://www.dfs.ny.gov/ | 212-480-6400 | 25 Beaver Street
New York, New York 10004 |
| North Carolina | https://www.ncdoi.gov/ | 855-408-1212 | 1201 Mail Service Center
Raleigh, North Carolina 27699-1201 |
| North Dakota | https://www.insurance.nd.gov/ | 701-328-2440 | State Capitol, 600 East Boulevard, Dept. 401, 5th Floor
Bismarck, North Dakota 58505-0320 |
| Ohio | https://insurance.ohio.gov/wps/portal/gov/odi | 614-644-2658 | 50 West Town Street, Third Floor, Suite 300
Columbus, Ohio 43215-1067 |
| Oklahoma | https://www.oid.ok.gov/ | 405-521-2828 | 400 NE 50th Street
Oklahoma City, Oklahoma 73105 |
| Oregon | https://dfr.oregon.gov/Pages/index.aspx | 503-947-7980 | P.O. Box 14480
Salem, Oregon 97309-0405 |
| Pennsylvania | https://www.insurance.pa.gov/Pages/default.aspx | 717-787-2317 | 1326 Strawberry Square
Harrisburg, Pennsylvania 17120 |
| Rhode Island | https://dbr.ri.gov/divisions/insurance/ | 401-462-9500 | 1511 Pontiac Avenue
Cranston, Rhode Island 02920 |
| South Carolina | https://doi.sc.gov/ | 803-737-6160 | 1201 Main Street, Suite 1000
Columbia, South Carolina 29201 |
| South Dakota | sdinsurance@state.sd.us | 605.773.3563 | South Dakota Division of Insurance
124 South Euclid Avenue, 2nd Floor Pierre, South Dakota 57501 |
| Tennessee | https://www.tn.gov/commerce/insurance-division.html | 615-741-2241 | 500 James Robertson Parkway, Suite 660
Nashville, Tennessee 37243-0565 |
| Texas | https://www.tdi.texas.gov/ | 512-676-6000 | 333 Guadalupe Street
Austin Texas 78701 |
| Utah | https://insurance.utah.gov/ | 801-957-9200 | 4315 S. 2700 W., Suite 2300
Taylorsville, Utah 84114-6901 |
| Vermont | https://dfr.vermont.gov/industry/insurance | 802-828-3301 | 89 Main Street, Drawer 20
Montpelier, Vermont 05620-3101 |
| Virginia | https://www.scc.virginia.gov/ | 804-371-9741 | 1300 E. Main Street, Tyler Building
Richmond, Virginia 23219 |
| Washington | http://www.insurance.wa.gov | 360-725-7100 | Insurance Building, P.O. Box 40255
Olympia, Washington 98504-0255 |
| West Virginia | http://www.wvinsurance.gov | 304-558-3386 | West Virginia Lottery Building, 900 Pennsylvania Avenue
Charleston, West Virginia 25302 |
| Wisconsin | https://oci.wi.gov/Pages/Homepage.aspx | 608-266-3585 | 125 South Webster Street
Madison, Wisconsin 53703-3474 |
| Wyoming | http://insurance.state.wy.us | 307-777-7402 | Herschler Building, 106 East 6th Avenue
Cheyenne, Wyoming 82002 |
What to Do If Your Car Is Totaled
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.
FYI:
Feeling charitable? Some charities, like Goodwill and Habitat for Humanity, let you donate your salvage vehicle for a tax deduction and will even tow it for free.
If your goal is to make the most money from your salvage vehicle, get quotes from multiple car-buying companies and look for those without hidden fees and that will tow your car for free.
Where Do Totaled Cars End Up?
If they don’t end up in salvage yards, totaled cars can be driven outside of the U.S., where owning and insuring salvage vehicles is easier. However, in states that let people repair and insure salvage vehicles, they may be driven in the U.S. as well.
Conclusion
Car ownership is one of the biggest costs most people encounter after housing. If you have the right auto insurance for your totaled vehicle, a total loss doesn’t mean you’re out the money you spent on your car. Rather, you can be “made whole” again if you have collision or comprehensive coverage or new-car-replacement coverage. Who knows, maybe you’ll even buy an upgraded new car with the amount of money you receive for your salvage title car!
Frequently Asked Questions
Is it OK to buy a wrecked car?
Whether it’s OK to buy a wrecked car depends on what you want to do with it. You cannot drive or insure a wrecked car legally. However, if you plan to sell it for parts or repair it, that is OK.
Does a car lose value after an accident?
Yes, a car loses value after an accident if it has sustained damages, although the extent of the loss depends on the extent of the damages.
How quickly do cars lose value?
According to finance expert Dave Ramsey, cars lose 9 to 11 percent of their value as soon as they’re driven off the lot, 20 percent of their original value after a year, and 15 to 25 percent during the second through the fifth year. After the fifth year, many cars will have lost 60 percent of their value.
What car does not lose its value?
Classic and antique cars do not lose their value as long as they are kept in their original condition. Instead of depreciating in value, they appreciate.
Senior Writer & Editor
A seasoned journalist and content strategist with over 10 years of editorial experience in digital media, Aliza Vigderman has written and edited hundreds of articles on the site, covering everything from plan coverages to discounts to state laws. Previously, she was a senior editor and industry analyst at the home and digital security website Security.org, previously called Security Baron. She has also contributed to The Huffington Post, SquareFoot, and Degreed. Aliza studied journalism at Brandeis University.
Citations
Frequently Asked Questions: My Car’s Value. Kelley Blue Book. (2023).
https://www.kbb.com/faq/values/#question-11What Is Wholesale Value? CARFAX. (2023).
https://www.carfax.com/blog/what-is-wholesale-valueWhy Trade-In Value Is Lower Than Market Value. J.D. Power. (2019, Apr 19).
https://www.jdpower.com/cars/shopping-guides/why-trade-in-value-is-lower-than-market-valueTotal Loss Threshold By State. Appraisal Engine. (2023).
https://totallossappraisals.com/total-loss-threshold-by-state/What Is the Salvage Value of My Car? CashForCars.com by Copart. (2023).
https://www.cashforcars.com/blog/what-is-the-salvage-value-of-my-car/Salvage title cars: Should you buy one? Credit Karma. (2022, Feb 17).
https://www.creditkarma.com/auto/i/what-is-car-salvage-titleCan you get insurance on a salvage title car? Progressive. (2023).
https://www.progressive.com/answers/insurance-salvage-title-car/The Insurance Company Says My Car Is a Total Loss. What Now? NOLO. (2023).
https://www.nolo.com/legal-encyclopedia/the-insurance-company-says-my-car-total-loss-what-now.html
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