So My Car is Totalled…Now What?

A car that sustains serious damage in a collision is often said to have been totalled, but for insurance purposes, knowing the true definition is essential to receiving the fair market value for your lost vehicle. A car is deemed a total loss, or “totalled,” when the cost of the required repairs to make the car functional again exceed the value of the car, and insurers use a one of a few sets of very specific criteria in determining how much a car is worth, read more at HBF.

Private Party Resale

One of the three main methods of expressing the market value of a vehicle is to find its private party resale value, also known as actual cash value. The private party retail value describes a commonly accepted price for a vehicle transacted between two individuals.

Sales between individuals are not usually conducted at the optimum prices that dealers can have access to, and so the private party resale value can often be higher than if another appraisal method had been used. The amount can vary by $100 or thousands, but the common thread is that the private party resale value is usually the most favourable estimate of a vehicle’s worth.

Dealer Resale Value

Dealer resale value refers to the average price of a vehicle purchased from a licensed car lot. Dealers typically have access to preferable pricing, are motivated to keep prices competitive by other licensed dealers, and can make up any losses on an individual sale in volume. For these reasons, this estimate is often less than ideal for insurance purposes

Wholesale Value

Usually the method of assessment that yields the lowest possible estimate, wholesale value represents the price that a dealer paid to add a similar vehicle to his inventory. Cars sold on the wholesale market are almost always much less costly than cars sold to the general public, and so this metric is most frequently used by insurance companies to establish the value of a totalled car.

Replacement Value

Replacement value is not an official vehicle value estimation measure, but an option available from some insurance providers that can provide for the full cost of replacing a vehicle, including the actual cost of the make and model on the open market as well as covering sales tax, title and transfer fees. Adding replacement vehicle coverage to an auto insurance policy can be expensive, but eliminates any potential gap between the value of your totalled ride and the cost of a new one.

The policies of most auto insurance providers may be intended to benefit the insurer, but you can be ensured of getting the best possible value after a total loss with a little relevant research. Be knowledgeable about the private party resale value of your specific vehicle as well as any premium options that increase its value by checking reputable vehicle appraisal resources and find local examples of similar vehicles for sale to bolster your case for the worth of your vehicle. When it comes to determining the market value of a vehicle, there is plenty the policyholder can do to help drive the price up.