Ever had a car totaled? I'm not sure I understand how this works...

[Phentex]

I was in an accident last month of no fault of my own. A bit more than a fender bender but nothing major. No air bags went off or anything. One headlight was smashed and the front bumper was beat up. The car is just over ten years old but had been in near mint condition. I had zero issues with it as far as maintenance beyond tires and oil changes. My plan was to look for a new car at some point (maybe next year) and let my son have the car.

When I was told how much it would cost to fix, I could not believe it. I knew the insurance company would total it. It's ten years old! And I guess I just never realized how expensive it is to fix a car.

I did some blue book research and figured it wouldn't be worth me to fix it either.

The insurance company has offered me an amount that is $3,400 MORE than what it would cost to fix the car. They show cash value. Then they show taxes and then a total payout amount. Am I understanding this correctly?

How is that possible? Why wouldn't they just fix the car?

[SoCalNative]

1. Because they will still likely make money from the deal

by turning around and selling it to a scrapper or at an auto auction.

[Phentex]

5. I know it's just a car

but it was minding it's own business and now the poor thing could end up in scrap.

[chelsea0011]

2. The cost to repair a car exceeds the value of the car makes it a total wreck.

As to why the insurance company is offering you more than the cost to fix, I am not sure. One thought is the cost is only an estimate and the repair center may request more to fix it. Anyway, the insurance company knows the cost to repair and your claim and does whatever is in it's interest. Also, if you believe the replacement costs is more than the insurer is giving you, you may want to try to exact some more cash from them. Start by telling them you want to repair the car.

[Phentex]

3. I am surprised by their offer

I expected much less. A friend at work said once the title is declared a total, it's basically worthless when you want to sell.

[A HERETIC I AM]

17. That's not necessarily true.

As others have said, if the cost of the repair is more than the market value of the unit, it's a total loss as far as the insurance company is concerned. As a former car hauler, I can tell you than many thousands of totaled units are actually bought and shipped overseas as is, to be repaired outside the country and sold over there. The Middle East and Africa being two major players in this section of the automobile market.

If the engine and drivetrain are still in good shape, it can be used for parts, if nothing else and that alone makes the car worth something to someone.

[The River]

4. Parts

the car parts are more valuable than the whole car.

[Phentex]

6. Poor Grover...

he did have nice parts.

[alarimer]

8. I called my boyfriend's green car "Kermit".

Now his red one is "Elmo".

[Phentex]

9. I had a Kermit many years ago

there aren't too many green cars out there these days. Kermit green I mean.

As an aside, what's with the new car colors? Black, white, silver, red, charcoal. A few shades of blue. An occasional aqua or orange in some of the cars like a mini cooper. The majority seem to be just one of the first mentioned.

[alarimer]

11. This was a Mazda 2 from about 2011.

It came in some very bright colors, including Kermit green.

Car colors are mostly boring these days, but I'm not sure why.

[Phentex]

12. Oh yeah I followed that one for a while

That was a very cute car.

Honda has a lime green Civic but they are still one of the most stolen cars around.

[58Sunliner]

7. Do your research. Know the value of your car and take it to someone else for a

quote for repairs. If they total it, you can buy it back and get it fixed yourself and keep the cash. The insurer of the car that hit you should be paying the deductible. Don't let them cheat you on that. Your insurer will be reimbursed by the other co. You can also call a lawyer, just for info. I wish we had when we did this.
Ask about the buy-back charge.Make sure it is reasonable, look online for a comparative cost. Our insurer tried to stiff us. And if you have any medical issues, be sure to talk to the rep who will close out medical claims and email them. They are sneaky and dishonest.
And if you do the buy back, make sure the title is in your name, not theirs.
Good luck.

[Phentex]

10. My only medical issue

has been depression at having to deal with all of this. Yeah, yeah I am happy to be alive but this has been a pain in the butt.

[58Sunliner]

13. It is.

[Randomthought]

15. Good advice.

My ex totaled our car during the divorce. I chose to keep the car. The insurance company deducted the scrap value from the settlement. I had the car repaired and drove it for another two years.
I asked the body shop to make the car drivable and street legal but not necessarily pretty. I had a little money left over.

[cemaphonic]

14. A bunch of reasons

1) The repair cost is just an estimate. It could be more. And you could find some problem in a year that you might decide resulted from the accident and open a claim.

2) Liability in future accidents. If your car is involved in another accident, an investigation would turn up the first accident, and could affect the outcome of the claim. More directly, damage from the first accident could potentially cause an accident.

3) They want to keep you buying insurance. A ten-year-old car with a accident on its title is not likely to be worth much in terms of resale. So the smart thing to do would be to only keep the liability portion of your insurance policy and drop the rest. By paying more than the cost to fix it, they are making it likely that you will buy a new car that you will want to be fully insured.

4) I think there are some regulatory issues requiring them to declare a total once it exceeds a certain percentage of the car's value.

But yeah, it's frustrating. Same thing happened to my wife's car earlier this year. Our settlement was for about double what it would have cost to fix the car.

[Phentex]

16. my insurance company hasn't been involved...

just the other driver's but yeah the more I understand it, the more I get that this estimate could blow up once they really get under the hood.

My first accident where I was the driver. And I'm no spring chicken!

[csziggy]

18. Same thing happened with my husband's car a few years back

He turned left and was T-boned. Both sides of the car were smashed up - the side the other car hit and the side the car landed on when it fell over. It was still running just fine, which was good because he could open the moon roof to climb out.

Blue book value on the car was about $4500 - the insurance company paid us $6500 for it. I'd budgeted about $10,000 to find a replacement car, figuring I would have to pay half and the insurance money would cover half so their pay out was wonderful. I found a Prius for $8500 (total cost to us, including tax & title and transferring the tag off the other car)so we came out MUCH better than I was expecting.