What Happens When Your Car is Totaled But Still Drivable?

Have you ever been in a car accident and wondered what happens next? If your car is damaged but still drivable, you might be confused about your options. When an insurance company declares a car “totaled,” it means the cost to fix it is more than what it’s worth.

But just because it’s totaled doesn’t mean you can’t drive it. In this article, we’ll explore what being “totaled” really means, how insurance works in these situations, and what steps you should take next. 

What Does it Mean for a Car to Be Totaled?

When a car is declared totaled, it means that the cost to repair the damage exceeds a certain percentage of the vehicle’s total value, which is typically set by the insurance company or state regulations. In most cases, this percentage is around 70% to 80% of the car’s current market value.

For example, if your car is worth $10,000 and the estimated repairs cost $8,000, the insurance company would likely consider it a total loss. However, a car can still be deemed totaled even if it’s drivable—often due to extensive cosmetic or structural damage that makes repair costs impractical.

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In these cases, the car’s salvage value (what the vehicle is worth in its damaged state) becomes an important factor in the insurance settlement. Once declared totaled, the vehicle usually receives a salvage title, impacting its resale value and insurability.

How Can a Totaled Car Still Be Drivable?

A car can be considered totaled but still drivable when the damage, while expensive to repair, doesn’t affect its ability to function safely. Insurance companies often declare a car totaled when the cost to fix it exceeds a certain percentage of its market value, even if the damage is primarily cosmetic or involves non-essential components like bumpers, fenders, or body panels.

For instance, a car might have significant exterior damage from an accident but no major issues with its engine, transmission, or suspension, allowing it to run normally. In these cases, while the car is still technically roadworthy and can be driven, the cost to repair it to pre-accident condition is deemed too high by the insurer.

Auto Insurance and Transmission Issues

However, just because a car is drivable doesn’t mean it’s free from safety concerns, as even seemingly minor damage could hide underlying structural problems.

What Are Your Options When Your Car Is Totaled But Drivable?

When your car is totaled but still drivable, you have a few options to consider:

1. Accept the Insurance Payout: The insurance company will give you a payout for the car’s actual cash value minus any deductible. You can then decide whether to keep driving the car or use the money toward a new one.
2. Keep the Car: You can retain the car and get a “salvage title.” This might involve buying it back from the insurance company for a small fee. Remember, future insurance coverage for a totaled car can be tricky.
3. Repair the Car: If the damage isn’t too severe, you can use the insurance payout to make necessary repairs. Keep in mind, that the car might not be as safe or reliable as before.
4. Sell the Car: Some buyers might be interested in purchasing your car for parts or even as a fixer-upper. This is especially common if your car model is sought after.
5. Donate the Car: You can donate the vehicle to a charity. This might give you a tax deduction and help a good cause.

Dealing with Insurance After Your Car is Totaled

Handling insurance after your car is totaled can be quite the maze. Here’s a roadmap:

1. Notify Your Insurer: Inform your insurance company immediately about the accident. They’ll start the claims process and guide you through the next steps.
2. Vehicle Assessment: The insurer will send an adjuster to evaluate the damage. They determine whether the car is indeed totaled by comparing repair costs to the car’s market value.
3. Understand the Payout: If your car is totaled, the insurer will offer a payout based on the car’s pre-accident market value. This amount might be negotiable, so it’s wise to do some research and ensure it’s fair.
4. Salvage Title: If you decide to keep the car, you’ll receive a salvage title. This means the car is legally considered a total loss but can still be driven or sold.
5. Settlement Agreement: Once you agree on a payout, you’ll sign a settlement agreement. The payout can be used for a new car, repairs, or other financial needs.
6. Repair or Replace: Decide whether to repair your totaled but drivable car or replace it. Weigh the costs, safety, and future reliability.
7. Future Insurance: Understand that insuring a car with a salvage title can be more challenging and expensive. Some insurers might refuse coverage altogether.
8. Stay Organized: Keep all paperwork, receipts, and correspondence with your insurer. This documentation is crucial for resolving any disputes or future claims.

Impact of Rebuilt Titles on Insurance

Dealing with insurance might not be the most exciting part, but nailing this process ensures you’re financially protected.

The Implications of Driving a Totaled Car

Driving a totaled car has several implications worth considering:

1. Safety Risks: The car’s structural integrity could be compromised, which may make it more dangerous to drive. Essential safety features might be damaged or non-functional.
2. Legal Concerns: Depending on where you live, driving a totaled vehicle might not be legal without proper inspection and a salvage title. Be aware of your local regulations.
3. Financial Impact: Even though it’s drivable, a totaled car has little to no resale value. Future repairs could be costly, and insurance premiums might increase.
4. Insurance Issues: It might be more challenging to find insurance coverage for a totaled car, and policies might come with higher premiums or reduced coverage.
5. Reliability: A totaled vehicle might have hidden damages that could lead to unexpected breakdowns or require further repairs, decreasing its overall reliability.
6. Depreciation: The car will depreciate faster. Potential buyers or trade-in evaluations will heavily discount its value due to its history.

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Understanding these issues helps you decide what to do with a totaled car, whether to repair it carefully or consider other options.

What is a Salvage Title and How Does It Affect You?

A salvage title is a document that shows a vehicle has been heavily damaged and declared a total loss by an insurance company. This usually occurs when repair costs exceed the car’s market value, such as after an accident or flood. The salvage title warns potential buyers about the vehicle’s history, indicating it may have hidden issues.

Having a salvage title can significantly lower the car’s resale value—often by 65% to 75% compared to similar vehicles with clean titles. Additionally, getting insurance for a salvage title vehicle can be challenging; while liability coverage may be available, comprehensive and collision insurance often isn’t.

Consequences of Excluded Driver Accidents

If you decide to repair a salvage title vehicle, it must pass a state inspection to be legally driven again. After passing, the title may change to “rebuilt” or “reconstructed,” indicating it’s roadworthy. However, some buyers may still hesitate due to safety concerns. Overall, while salvage title cars can be cheaper options, it’s crucial to research and weigh the risks before buying one.

Should You Repair or Replace a Totaled Car?

Deciding whether to repair or replace a totaled car can be tough, especially if it’s still drivable. Here’s how to decide it:

• Cost of Repairs vs. Payout: First, compare the cost of fixing the car with what the insurance company is offering as a payout. If the repairs are more expensive or close to what you’d get from the payout, it might make sense to replace the car.
• Future Problems: Even if the car runs now, it could have hidden damage that leads to bigger problems later. You might keep paying for repairs, which can add up over time.
• Safety: Think about how safe the car is to drive after the accident. If the damage is mostly cosmetic (like dents and scratches), it might be fine. But if there are issues with the frame or airbags, it’s safer to replace them.
• Insurance Issues: A totaled car may get a salvage title, which can make it harder or more expensive to get insurance. Some insurance companies might not even cover it at all.
• How Long You Want to Keep It: If you plan to keep the car for a long time and it’s worth repairing, go ahead. But if you’ll need a new car soon anyway, it might be better to take the payout and buy a new one.

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In short, repair the car if the costs are low and it’s safe, but replace it if the repairs are expensive, or it could cause problems down the road.

Legal Aspects of Driving a Totaled Car

Driving a totaled car involves several legal considerations and requirements. Here’s a breakdown:

• Salvage Title: When a car is declared a total loss by an insurance company, it is issued a salvage title. This title indicates that the vehicle has been damaged beyond a certain percentage of its value.
• State-Specific Laws: The laws regarding driving a totaled car vary by state. Some states allow you to drive a totaled car if it is still drivable, but you must obtain a salvage title and meet specific requirements.
• Insurance Requirements: You will need to have the minimum required auto insurance for your state. This often includes liability coverage.
• Inspection and Certification: The car must be repaired to meet safety standards and pass an inspection by a licensed inspector. This ensures the vehicle is roadworthy and complies with safety regulations.
• Rebuilt Title: After passing inspection, you can apply for a rebuilt title. This title allows the car to be legally driven and registered on public roads.
• Legal Consequences: Driving a totaled car without the proper titles and inspections can result in legal repercussions, including fines and potential liability in case of an accident.

Should I Buy A Car With A Rebuilt Title?

It’s crucial to follow the legal steps to ensure your safety and compliance with state regulations. If you’re unsure about the process, consulting with a local DMV or a legal professional can provide guidance.

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Conclusion – What Happens When Your Car is Totaled But Still Drivable?

In conclusion, it’s important to understand your options if your car is totaled but still drivable. You can keep the car, but you should consider the costs and safety risks involved. Check with your insurance company about how they handle totaled vehicles and what kind of payout you might receive.

If you decide to keep the car, get a mechanic to look it over to ensure it’s safe to drive. Remember, every situation is different, so don’t hesitate to ask for help from insurance professionals or legal experts. By knowing your choices, you can make the best decision for yourself and your vehicle.

Milo Thistlethwaite

Milo Thistlethwaite is an auto insurance guru with over 8 years of experience in the industry. Holding a CPCU (Chartered Property Casualty Underwriter) certification, Milo is passionate about helping drivers find the best coverage for their needs. As an author on the ‘FundFinesse’ blog, Milo writes clear, easy-to-understand articles about auto insurance.