By Aaron Crowe
Seeing your totaled car go to the scrap heap after a crash can be difficult, especially if you've put money into it, customized it, named it or washed it every weekend.
Letting your auto insurer take the totaled car can be even more difficult if it's an older car that's still drivable.
There are options, though they're not as easy as getting a check from your insurer and walking away. Here are five things to do with a totaled car, starting with what most people do:
1. Take the money. After an accident, your insurer or the at-fault driver's insurer will tell you the vehicle's actual cash value, then make its decision to total the car based in part on how much repairs will cost. Simply put, it writes a check when the car is not worth fixing.
Insurance companies have their own formulas and states have their own thresholds for declaring a car totaled -- from damage that reaches 51 percent of a car's value to totaling at the insurer's discretion.
A totaled car doesn't have to look like a burned-out shell that has been smashed flat. What looks like minor damage to an older car can be an expensive repair that's worth more than the value of the car. The same damage on a newer Mercedes might also be an expensive repair, but the car is still worth a lot more money than the repair cost.
Once value is determined, insurers will pay you that amount, minus the deductible if the claim was made against your own policy. The insurer just bought your car from you, and it gets the car's title. If you still have a car loan, you're responsible for paying it off with that money. (And if you come up short of what's owed, a gap insurance policy comes in handy.)
2. Keep it and fix it. If the car can still be safely driven, or at least towed to a repair shop, you might want to keep it.
You can simply not file a claim at all, choosing instead to live with some cosmetic damage and make small safety repairs on your own dime. Especially for older cars, a claim may not get you enough money to buy something that's more reliable than the dented but safe ride you now have.
If you do file a claim, your insurance company makes a lot of the decisions from that point.
You might be able to keep the car, but the insurance company would deduct the car's salvage value -- usually a few hundred dollars at minimum -- plus any deductible if the accident was your fault. You would get a check for the remainder and a salvage title .
You can't always buy the car back, though.
"If you're getting paid by the insurer, you can't keep your wheels," at least in Illinois, says Lynette Simmons Hoag, a Chicago attorney.
Assuming you do buy the car back, you'll have to get a rebuilt title and prove the car roadworthy. If you have a friend who is a mechanic, or can do the work yourself, fixing a totaled car may be worth it.
Laws vary by state on rebuilt titles. Illinois, for example, doesn't allow them, Simmons Hoag says. But Illinois drivers get around the law by having them rebuilt in neighboring Indiana.
It may be hard to get insurance on a rebuilt car. Some carriers won't insure them at all and others offering only liability coverage, excluding collision and comprehensive.
While it may make more financial sense to rebuild a new, expensive car that has been totaled, an old car may be worth it if you can do it cheaply enough, says Thomas Simeone, a Washington, D.C.-based personal injury attorney. "With a lot of older cars, even though it's 'totaled,' you can still fix it," Simeone says.
3. Keep it and don't fix it. Something as simple as a long, nearly invisible scratch can cost only $600 to repair but require a $5,000 paint job to look right, which is what Dane Dingerson once found with a totaled car. Dingerson, a Kansas City resident who buys totaled exotic cars with salvage titles and restores them, says he rubbed out the scratch and ignored the small part that was still visible, and didn't have it repainted.
Hail can damage a car so much that it's totaled, but still able to drive with a dented roof and hood, says Bob Keith, senior director of education and training at Carstar, a body shop network based in Overland Park, Kansas.
"You've got a car that runs OK and you don't care if it looks like a golf ball, and you're just going to drive it to work," Keith says.
4. Keep and sell for salvage. While it's unlikely that you'll get more money than your insurer would by selling the car for scrap or parts, you can buy the car from the insurer and take a crack at it yourself. You may need the parts for another car you have. Or it's a hobby. Keith, the body shop expert, says he's seen few people do this. "The majority of folks just write it off and let the insurance company take care of it," he says.
5. Donate it. Donation services will tow the car for free and sell it for parts, and you'll get a tax deduction for the depreciated value, says Ari Teman, founder of an international conference on nonprofit innovation.