Can You Trade in a Totaled Car?

Can You Trade in a Totaled Car?

After an accident, you may wonder what to do with a totaled car. A car that’s declared totaled by the insurance company is simply one that’ll cost more to fix than it’s worth. But can you trade in a totaled car? Assuming you haven’t accepted a check from the insurance company (they’ll now own the car and have the right to salvage it), a trade-in may be an option.

Why Avoid Letting the Insurance Company Keep It?

If the insurance company declares your car a total loss, it won’t pay for repairs. Also, insurers often pay only a fraction of what a car is worth. The amount can depend on whether you have collision coverage, what your deductible is, and other factors. 

But keep in mind a totaled car still has some value. The insurance company has just determined that repairs will cost more. In California, if your loss was covered, you should receive the car’s actual cash value, or what it was worth immediately before the accident. Actual cash value reflects the price of the car after depreciation, not its initial purchase price. 

On the other hand, the salvage value is what it’s worth in a damaged state. A total loss in California means the vehicle’s actual cash value equals or is less than the cost of repairs (plus the salvage value). Here’s how the total loss law works: If in a depreciated state the car is worth $15,000, repairs cost $6,000, and the salvage value is $10,000, subtracting the last two numbers from the car’s value will equal -$1,000, so the car is considered totaled. 

Unless you have GAP insurance or purchased new car replacement coverage, you may not receive the payout you were expecting.

Trading in a Car with a Salvage Title

A salvage car can be unsafe to drive, but it may be valuable to a buyer. You can trade in a totaled car if a dealership sees a potential to profit by fixing it up or selling the parts. If you are considering this option, here is how to proceed:

  • Get the vehicle assessed and appraised by a professional.
  • Visit a mechanic and inform them of your intent; they can estimate what the car is worth.
  • Bring all relevant documentation to the dealership and negotiate a trade-in value.

Why would a dealer buy a salvage car? They cannot sell it as new. No matter what they do with it, they must disclose the salvage title; otherwise, they can face stiff legal penalties. But the dealer can auction off the car. In some cases, a buyer will choose to fix it. Or, a junk car buyer can use the parts (i.e., the brakes, radiator, or even parts of the engine) or sell the scrap metal.

While some dealers take salvage vehicles, there’s a risk of them undercutting the price. Therefore, you want to proceed carefully and weigh all your options. These include:

  • Sell It Privately: This requires photographing the car to document its condition and advertising it by preparing listings. You can list it online. But you’ll have to do all the work yourself, including communicating and negotiating with potential buyers, who may back out or request you make repairs before they consider purchasing the vehicle.
  • Sell the Parts: This requires disassembling the car and creating listings that describe and show the parts you want to sell. The process can be long and complicated. It can take several months, but if done properly, it can net more money than selling the car whole. However, if the parts are worn or damaged, or some sales are unsuccessful, your efforts can result in a lower payout.
  • Sell It to a Junkyard: Selling a totaled car to a junkyard may be an option. But if it pays only by weight, your sale can be undervalued. Try shopping around by calling different junkyards and comparing each one’s offer, any fees charged, and if you have to pay for towing. The process can take time.

An easier option is to sell the car online. CarBrain buys totaled cars. It provides fast quotes, arranges for free towing, and gives you a check when the car is taken. However, trading in a totaled car with a dealership can be a fast and convenient way to get it off your shoulders and cut the price of a new purchase.

Call Jacob If You’ve Been in an Accident

We’ve helped clients obtain millions of dollars in accident settlements. If you’ve been in a car accident and your insurance company is lowballing you, let us fight for maximum compensation. Our team has experience dealing with totaled car accident cases. For a free consultation, call The Law Offices of Jacob Emrani at (888) 952-2952 today.

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