How the Value of a Totaled Vehicle Is Calculated

After a serious car accident has totaled your vehicle, you now have the task of determining its value and obtaining a payout from the insurance company.

When your car’s in good condition, you can easily determine how much it’s worth. However, after totaling your vehicle, determining the value is a lot different. It requires you to make use of the totaled car value calculator.

If you are unfamiliar with the totaled car value calculator, we want to explain what it is and how you can use it. Keep in mind that after an accident occurs, you should also learn more about collision car insurance and determine if you have full auto coverage.

You should also know that insurance companies have different methods of calculating the value of your car at the time of the accident. Although it’s tempting to go off of the Kelley Blue Book value, no insurance company bases an evaluation on that specific source alone.

In this article, we will lay out everything you need to know about the totaled car value calculator and how you can use it to your advantage. Also, for information on insurance rates from the top companies in your area, feel free to utilize our free comparison tool by entering your ZIP code.

What is a totaled car value calculator?

Insurance companies have different ways in which they determine the value of a car that’s been totaled. However, their methods tend to vary from one another, especially when it comes to some of the top companies, such as Geico and Allstate.

Most insurance companies will try and calculate a replacement cost for your specific vehicle. Their job is to determine if the repairs are going to cost more than the total value of your car.

Keep in mind that a totaled car value calculator involves a multi-step process of gathering information from various sources. You can go about it in multiple different ways and come to a conclusion based on your findings. (For more information, read our “Totaled Car: What It Means & How It Works“)

One example of a totaled car value calculator is to look up the price of five different examples of your specific car. Make sure the mileage and color scheme is similar to your car when searching for these examples.

Next, average out all the prices — this should give you a rough idea of the cash value of your vehicle.

Read more: Is a car considered totaled if the airbags deploy?

The Total Loss Formula (TFL)

Every state has a specific formula or cash threshold that insurance companies must use to consider your vehicle a total loss. Here is how the formula works:

First, determine the Fair Market Value (FMV) of your car before determining the Salvage Value. Next, subtract the Salvage Value from the FMV.

Now, compare the total cost of repairing your car to the cash amount of the FMV minus the Salvage Value. If the repair cost is higher, insurance companies will consider your car a total loss.

How do you calculate a totaled car’s value?

You might want to hold off on accepting a payout from your insurance company. Instead, you will first need to perform a little research of your own. We advise that you follow these specific steps:

Include Your Receipts

Did you install any aftermarket components onto your car? Make sure you keep receipts of these accessories. It will benefit you to make the insurance adjuster aware of these additions you made to your car, which they will only accept if you provide the proper documentation.

We want to point out that not all aftermarket products are covered under your auto insurance policy. You’ll need special coverage in your insurance plan for audio systems, electric turbochargers, and more.

Determine Your Car’s Cash Value

Now, you can begin calculating the actual value of your car before the accident. Make note of your car’s condition and mileage at the time of the crash. Then, you can begin determining the cash value of your car by researching reputable pricing websites.

Remember, your car’s cash value hinges on multiple factors. Here is what you have to consider:

• Retail value. This is the price a dealer sets on a specific car.
• Dealer value. This is the amount of money a dealer pays to obtain a specific car before they re-sell it.

A good rule of thumb for determining the cash value of your car is to average out the retail value vs. the price a dealer would pay.

Receiving Your Payout

The totaled car value calculator that many of the top insurance companies use will ultimately determine your payout, which is the money your insurance company pays you to replace your car after it’s been totaled.

We strongly advise that you look into how your insurance company goes about calculating a totaled car’s value and issuing you a payout. Here is how some of the top insurance companies handle the process:

Totaled Car Value Calculator at Geico

Geico will base the actual cash value of your car on several factors. This includes the make and model of your car as well as add-ons, mileage, and the condition of your car at the time of the crash. Then, they will propose and issue you a payment.

Total Loss Car Value Calculator at Progressive

Progressive has a similar process to Geico. They will determine the market value of your car, which they will base upon the age, mileage, and condition of your vehicle at the time of the crash. Progressive also works with third-party companies to corroborate their findings before issuing you a payment.

Total Loss Car Value Calculator at Allstate

Allstate will begin determining the actual cash value of your car by looking at the age, condition, mileage, and resale value of your car. They will also factor in selling prices in your area before issuing you a payment.

Salvaging Parts From Your Vehicle

Let’s say that you’re not happy with the payout from the insurance company to replace your car. You may be able to buy your car back from the insurance company and salvage the parts, although this is not allowed in all states.

What happens is the insurance company issues a payout, which they’ll base on the actual cash value of your car. Then, you can buy your car back from them and begin salvaging valuable components. Believe it or not, scrap car parts can fetch you a pretty penny. Some examples include:

• GPS systems
• Fenders
• Car doors
• Catalytic converters
• Wheels, tires, and rims
• Other expensive modifications, such as car audio systems

It’s important to remember that trying to make money by salvaging parts from your car after the insurance company has paid out the total value is considered fraud. You can salvage parts without buying back the entire car, but the insurance company will have to agree to it and you will get a reduced payout to adjust for the value of those parts. Make sure you are doing everything the legal way.

Appealing the Calculated Value of Your Car

You also have the option to appeal the payout from an insurance company after they calculate the value of your car at the time it was totaled. Most insurance companies are willing to undergo the appeals process.

You will need to speak with the insurance adjuster about their findings and discuss why you’re appealing the payout. We advise that you do your homework beforehand so that you can negotiate your car’s value.

Bottom Line for Anyone Using a Totaled Car Value Calculator

Having to replace your car is never fun, especially if you rely on it to commute to work every day. However, you must take several necessary steps to determine and maximize the actual cash value of your car.

The totaled car value calculator will certainly come in handy when it comes to determining a fair payout from the insurance company. When they do prepare to give you a cash payout, take a moment to compare what they’re offering to your own research.

Insurance adjusters ultimately don’t have any special attachment to your car. They represent the auto insurance companies. An adjuster will, however, try to work with you in reaching an agreement regarding the actual cash value of your car.

An important thing to consider is how collisions play a role in your insurance coverage. For more information, we strongly advise that you do some research on various types of coverage, such as collision vs. comprehensive insurance.

You should also take the time to learn more about how to buy auto insurance before making any decision. Many drivers opt for comprehensive insurance because it offers more protection.

For more information about car insurance rates from the top companies in your area, go ahead and make use of our comparison tool. Simply enter in your ZIP code for the full results. This tool is free, easy to use, and will make your search a lot simpler.