Making the best of a bad situation: making money out of your car write-off

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You know how we love to look at unusual or alternative ways to make money here at Make Money Your Way, so today I want to talk about something I had never thought about before, but that was recently brought to my attention: making money out of your car after a write-off.

If you are not familiar with the term, a car write-off, or a total loss, occurs when you are in a pretty serious car accident, and your car is so damaged that your insurer considers the cost of repairs to put it back on the road exceeds the value of the insurance policy. In this case, your insurer will write you a check for the value of your car, minus your excess, minus a rebate for each year you have owned the car, as cars lose value over time. Anyway, if you have a very old car that is only worth say £1,000 and works pretty well, but you were in an accident and there is a lot of cosmetic work on it to put it back in shape, it may be written off because the cost of the work is over the £1,000 your car is worth.

There are actually different categories of write-offs, ranging from A (the car should be totally crushed) to D (the car can be repaired, and the value of the work may be worth it).

So you are left with a written off car and an insurance cheque. You could try to sell the vehicle as is to companies who buy scrap. You can go online to Compare It’s Value, and get an estimate of how much your damaged car is. Hopefully, between that and the insurance cheque, you can buy a similar make and model, in better condition.

You could also sell the working parts online, to people looking for spares.

If you decide to pay for the work to get the car fixed and back on the road, the car needs to pass what is called a Vehicle Identity Check with DVLA before you can drive it again. DVLA will make sure that the car is roadworthy, and also that it is the same car that was damaged that gets back on the road, as it could be a stolen car being given a new identity under cover of a damaged car.

Once you pass, you are free to sell the car, hopefully for a profit, but you must disclose to the new buyer that the car was previously damaged. Otherwise, if they find out, they can get a full refund from you and all your efforts will be in vain.

Out of those three options, the first one is by far the least labour intensive, as you just need to find a company to buy your scrapped car. But if you know a little about car, taking car repairs as a side hustle can be more lucrative than just selling the totalled car.