If you've gotten into an accident or otherwise damaged your car beyond the possibility of repairing it, your insurance company may brand it as a total loss. This implies that your car is no longer roadworthy, but this doesn't mean that it should end up in a scrapyard by default. There are still many things you can do with your totaled car such as salvaging parts, donating your car, repairing it yourself or even using your car if it's still driveable.
Option 1: Get the Money
After an accident, your insurer or the other party's insurer will evaluate your car's actual value before the accident, minus any deductibles. Most insurance companies have their own formula and different states have their own set of rules that determine whether your car is totaled.
Your car doesn't need to look like an absolute wreck to be viewed as totaled; sometimes the most significant and costly damage isn’t visible. If the insurance company deems that the car is beyond reasonable repair costs, they'll take over your car's title and pay you a settlement.
At this point the most straightforward course of action is to settle with your insurance company, receive your payout and get a new vehicle with your pay-out. The old, totaled car is off your hands and you can start anew.
Remember, though, that if you have a loan running on your car, you're still responsible for repaying that loan although your insurance company just bought the car off you. This will most likely be the case if you've got a newer model and are still making payments. So while your insurance claim is being processed, continue to make all payments on time. Once your claim is processed, your insurance provider may choose to pay out any lien holders before sending you a final check. If the last check exceeds the pay-out, you'll still have to continue paying your loan until it is complete.
Option 2: Keep the Car
You may choose to keep your totaled car, either because you can't afford the penalties imposed by your insurance company or for sentimental reasons. Remember, though, that most instances will require you to forego your insurance claim if you want to keep your car and you will need to pay for repairs out of pocket.
If you've decided to keep your car and fix it, it’s then up to you which fixes you do. This can be practical for older totaled cars where you may get a rather small sum even if you do make a claim, and that money will not cover the cost of getting a new or even used car to replace your older one.
If you do file a claim, it’s usually up to the insurance company to decide what kind of payout you get from them. They might let you keep your totaled car minus any deductibles plus the car's salvage value. You will then be handed over a salvage title with the remaining money.
Some insurance companies strictly refuse to sell you back the totaled car.
Also, if your insurer is flexible you do buy your car back from them, you'll need to prove to your state agency that you’ve had the vehicle repaired to a satisfactory level and that the vehicle is
roadworthy again. Only then will you be issued a rebuilt salvaged title, which allows you to register and drive the vehicle again
Option 3: Salvage Parts and Sell Them
If you've decided to keep your car, you still have a chance to make money out of it. Perhaps you cannot afford to pay out of pocket to get your car fixed. If this is the case, you can sell the car’s functional components piece-by-piece. Some car owners will pay good money for working parts that are no longer in production or hard-to-find. Even if the parts are in production, buying good-quality used parts is usually much cheaper than the same part sold new.
This is especially the case if your totaled car is an older model or one that was sold in smaller numbers.
If you don't have the time to find buyers for salvaged parts, you can reach out to local mechanics, repair shops or junkyards, all of whom may pay you good money for salvageable parts. You're likely to get much more money out of salvaging and selling your car's parts than what your insurer paid out.
You can also search the internet and Facebook for forums and websites for owners of your specific model. If your vehicle has an enthusiast following, it’s likely that there are fan-run websites with classified sections or forum postings where people sell parts.
Option 4: The Junkyard
You may face a scenario where your insurance payout is too small to be meaningful or useful or you don't want the hassle of dealing with your insurer. If this is the case and you have no time to handle your totaled car, you may decide to simply send it to the junkyard. Some licensed scrap buyers will tow your car for free and will pay you decent money for it. Be sure to bargain, though, and find out the value of your totaled car before you call the junkyard. Doing this will ensure you get top dollar for your car right until it is taken off your hands.
Option 5: Donate your Car
Many owners of totaled vehicles donate them to charity. If you've already received a payout from your insurance company, you won't be at a total loss. Additionally, you’re usually eligible for a tax deduction for the car’s depreciated value. Check with your local charity to see if they accept vehicles as donations; you may be surprised at how many will say yes.