The only thing worse than getting in a car accident where your car can be repaired is when your car is totaled. You never get in your car thinking it’ll be the last day you drive it.
When drivers are facing the possibility of their car getting totaled, they also run the chance of still owing money on their car. Some drivers might even have negative equity, which makes the situation even worse. You have to deal with several different variables, from Insurance claims to auto repair shops and possibly even injuries.
But when a body shop totals your car (also known as a “total loss”), it can seem like a worst-case scenario. However, there is a positive side to when this happens and we’re here to discuss that.
Here’s what you need to know:
Cars are typically “totaled” when the cost of the repair is 70% or higher of the ACV (actual cash value) of the car. For easy math, if the vehicle is worth $10,000 and the repair estimate is for $7,000, the insurance company will probably total it even though the repair is less than the cost of a replacement.
This can be a confusing process, primarily when you’ve heard stories of cars that are totaled even though they still work and a repair is 75% of the ACV. However, even if the cost of repair is less than the value of the car, it may not make sense to repair the vehicle, depending on the threshold percentage. We’ll discuss what that means a little further down below.
You’re probably wondering why your car has to be totaled, even if there’s still some value left. Let’s break down when cars would be totaled and why:
Cars aged 1-3 years
Typically, the severity of the damage will determine whether or not the vehicle will total. However, cars this age will most likely not total. The average repair cost of a one-year-old vehicle is a little over $3,000, and with a value of over $25,000. Less than 7% of these vehicles are considered a total loss.
Cars aged 3-5 years
Will it total? Here’s where mileage and condition start to enter the equation, along with just how bad the damage is. Remember, the insurance adjuster is going to appraise the car pre-accident condition. If your car had other damage that was not repaired, excessive wear, or even high mileage, that would mean a lower ACV. This will bring you closer in range to the repair costs. Higher priced luxury vehicles, trucks, and SUVs will probably be repaired, but lower-priced compact cars and some sedans might get totaled, even if they’re only 5-years-old.
Cars aged 6 years and older
Most likely, cars that are this age will total. Take, for example, a vehicle that is 10-15 years old. This type of car only has a value of about $6,000 and an average repair cost of $2,000. All of this comes into consideration when determining the threshold of the vehicle. The good news is for cars this old is they are most likely paid off, which means you’ll get a nice sum to put as a down payment towards your next car.
Total Loss Threshold
This is where something known as a “total-loss threshold” comes into consideration. According to carinsurance.com, a total-loss threshold is, “the point where an insurer must legally declare a car totaled and apply for a salvage title.” Here in North Carolina, the total-loss threshold percentage is 75%. However, every state is different, primarily because 22 states use something known as a total loss formula (TLF) instead of a specific threshold percentage.
When one of these 22 states use a TLF instead of a threshold percentage, this means insurers will evaluate the cost of repairs plus the vehicle scrap value. If the number is lower than the ACV of your car, insurance may decide to repair it. However, if the amount is equivalent to or higher than the ACV before the accident, then your vehicle will be deemed a total loss. Every situation is different.
The Silver Lining
If you find out that your car was declared a total loss, this is actually a blessing in disguise. Sure, these decisions are often based on what numbers work best for the insurance company. However, every auto body shop will tell you that you wouldn’t want to drive a car that has had a lot of work done to it. That may sound surprising, especially since we make our living repairing cars. At the same time, we want our customers to be safe, which is why a repair may not be the right thing to do.
Today’s cars are incredibly sophisticated and complex machines full of multiple high strength steels, computers, sensors, and cameras. They are also built to transfer crash energy away from the occupants, and this can cause damage in areas not even included in the accident. The manufacturers tell us how a car should and should not be repaired, and we listen to that. If your accident involved areas that can’t be joined or welded or rivet bonded safely, then the vehicle should be totaled. Just think about the stress that comes from driving a car that should have never been repaired. If a body shop tells you to be glad your car was totaled, they’re telling you the truth.
Why Choose Us
Here at Statesville Collision Center, we are committed to providing North Carolina drivers with the highest level of auto repair they deserve. We have invested in our technician’s training because we believe a safe repair is the only way to go.
Our technicians are all I-CAR Gold Class certified, which only about 10% of auto repair shops achieve. This means that our technicians have received the highest level of training and know what it means to repair your car the right way. We are always checking OEM repair procedures and understand what it takes to give you the best possible repair out there!
Our motto is, “we may not be related, but you’ll feel like we’re family!” This is because we genuinely care about North Carolina drivers receiving the highest level of repair possible for their vehicles.
Feel free to give us a call at (704)-881-0410. If you’d like to schedule an estimate or get an online quote, we’re more than happy to help out! We offer these on our website to make the car repair process as stress-free as possible!
We look forward to hearing from you!