Rumor has it that a new car loses thousands of dollars of value as soon as you drive it off the lot. Depreciation can hit you pretty hard, and it’s not just a problem during those first few blissful miles between the dealership and your garage. The value of a car will keep going down for as long as you own it, generally, and there are a lot of factors that go into figuring out how much it is worth if the unthinkable happens and your car becomes a “total loss.”

First, let’s clear up a common misconception. “Totaled”  in the sense of a totalled vehicle does not mean it was so badly damaged that it cannot be repaired. Technically, a minor fender bender can result in a “totaled” car. All this really means is that the cost to repair the damage is more than the value of the car.  Even if it could be repaired, then, the car could still be a total loss.

The biggest issue between an insured and an insurer when a car is totaled is the value of the car. How that gets calculated can vary from state to state, company to company, and insured to insured. Your state may have specific requirements as to how to deal with a totaled vehicle, but the value is generally determined by market forces. How well you have maintained your car, any pre-existing damage, and basically how much people are generally paying will all factor into what is a “fair” value.

If you and your insurance company are at odds as to the value of the car, there are many resources for figuring out and supporting the amount of your claim. Some websites will calculate the estimated value of your car based on the year, make, model, mileage, and condition of your car. The actual prices that actual people in your area are paying for cars like yours is a strong indicator of the value of the car, as well. Look around and present your findings to your insurer. Hopefully you can come to an agreement on a fair payment.

Some people are very attached to their cars and want to keep them no matter what damage has been done. Sadly, even if it was the best car in the world and you drove it to your prom and your wedding and the birth of your first-born child, sentimental value generally won’t factor into the amount of your claim. State laws vary on whether and how you can keep a totaled car and some insurance companies will not insure them. Talk to your insurance company about your options and remember that you will not receive the same amount of money as you otherwise would. When the insurer keeps the totaled car, they generally get some money for it at auction or as salvage. If they give the car back to you, they will reduce your cash payment by whatever they could have made through a sale.

The best way to avoid a dispute over the car’s value is to avoid the damage altogether. Accidents happen, though, no matter how hard we try to avoid them. Stay safe, be aware of your surroundings, and keep that car in tip-top shape to get the best recovery you can.

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