Your car may earn a salvage title for multiple reasons. Essentially, when an insurance company declares a car as a total loss, that is when it becomes a salvage car. However, this isn’t always a death sentence when it comes to selling your car, and you may be able to get a good deal on your vehicle. But how do you determine the resale value of a salvage car?
The resale value is going to depend on a lot of factors, especially the reason why your car has earned the salvage title. Here two likely situations that could earn your vehicle the salvage title.
- If your car gets stolen and isn’t recovered within four weeks
- If your car meets with an accident that leaves some essential parts severely damaged.
In the second scenario, the car does lose a significant amount of its market value. You could either decide to get rid of the car and sell its spare parts, or you could attempt to get a little more money. The market is filled with people trying to save a little cash on their automobile purchases.
Not all vehicles get damaged beyond repair. Some can be fixed, and as long as they can clear the road safety test, they can even pass off as being in mint condition. But before you decide to fork out the money on extensive repairs, you should first determine the resale value of the vehicle.
How Do You Determine the Resale Value of a Salvage Car?
To determine the resale value, you first determine its salvage value. If the result doesn’t place the car as a total loss, then you can go ahead and get those repairs done.
Find out the Wholesale Value
Your car is damaged and used, so it won’t necessarily be priced the same as the same make and model in the market. You can, however, find out the wholesale value of the vehicle by browsing through resources like Kelley Blue Book and National Automobile Dealers Association Used Car Guide.
With these two resources, you can determine how much your car would have been worth had the insurance company not placed the salvage title on it.
Determine the Market Value
Determining the market value will be a little more challenging. You will have to do your research as the offers you get will vary not only by location but also from dealer to dealer and buyer to buyer.
Not all dealers accept salvage cars, so the first step is locating those who do. Contact multiple dealers to find out whether they accept salvage cars. Even though the offers won’t vary by a huge margin, it is in your own best interest to find the highest one. You are already losing out on a lot of money because of your vehicle’s unfavorable title.
You should also contact some direct buyers through online websites. Dealers are essentially middlemen and do keep a cut of the profit for themselves, which reduces the amount of money you receive. Also, the quote they provide will not give you an accurate idea of your vehicle’s market value, which is what you seek.
You can also calculate the market value by adding the two values you receive from Kelley Blue Book and National Automobile Dealers Association and dividing the resultant figure by two. Use these three estimates to get a general idea of the worth of your salvage car.
Contact Insurance Company
The third step is to contact the insurance company and ask them for the percentage they use to calculate the value of salvage cars. The average percentage for such vehicles lands at either 75% to 80% of the car’s market value.
Calculate the Salvage Value
Whatever percentage your insurance company provides, subtract that from 100 and multiply the estimated market value of your car with that figure. So, for example, if your insurance company offers a 75% return, then multiply the market value by 0.25 to get the approximate salvage worth of the car.
The salvage worth is what helps you determine whether or not you go in for the repairs or not. If the total cost of repairs exceeds the salvage value, then your car comes in at a complete loss and is not worth spending anymore on. It is better to sell it off to a junkyard and receive whatever you can for the body and spare parts.
But if the repair cost is lower than the salvage value, then we suggest you go in for the repairs and then have the car revalued.
Determining the Resale Value
Determining the resale value for a salvage car work the same way it does for any used car. The best way is to get it appraised by an automobile dealer. They will inspect the vehicle and determine whether all the parts are in good working condition. If it passes road safety standards, you may be able to get quite a hefty sum of money for it.
If you don’t want to go to a dealer, then we suggest you try and get an estimate yourself. Search for the current market value of cars with the same make and model as yours. It’s best if you only focus on those with the same mileage and use as yours. Getting another car with the exact same usage is almost impossible to keep in mind that you are looking for the next best alternative.
You can even get a quote from your insurance company. They may be able to provide you an in-depth market analysis of your vehicle. They have the resources to determine the demand for the make and model and how much your vehicle will be worth.
Getting Your Salvaged Car Insured
The chances of an insurance company willingly insuring a car previously deemed a loss are next to none. However, that is not always the case as it largely depends upon why and how the car earned the unfavorable title.
If your car was stolen and the insurance company had to cover the loss, then there are high chances that you can get it re-insured effortlessly. In such a situation, it isn’t the car that’s the problem but the unfortunate circumstances.
However, if your car met an accident and suffered substantial damage, then getting an insurance company to cover it can be quite challenging. In fact, even if you do succeed, they may not provide extensive coverage. Either way, it is your loss as it is your car that gets devalued in the market.
Whenever you do to sell your salvaged vehicle, make sure you do keep all records at hand. Those interested in damaged cars are usually looking to save some extra cash and will haggle with you. If you want to get the best price possible, keep detailed documentation detailing all repairs and part replacements so you can prove that the car is fitted with the best parts for it.
If your car has cleared the road safety test, make sure you have that document in hand as well. If it has insurance, keep that on you when going to make the deal. All of these will eventually work out in your favor, getting you the best resale value.
We hope this article answered the question of how do you determine the resale value of your car. All it takes is a little bit of research and effort, and you should be able to get a good enough return on your vehicle.