Can You Keep Your Car if Your Insurance Company Totals It?

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Written by Mandy Sleight Edited by Lequita Westbrooks

Updated August 9, 2024

Getting into a car accident can be stressful — especially if your car insurance company says your car is beyond repair and a total loss. Each state has a threshold or formula for declaring a vehicle totaled, depending on the amount of damage and the car’s value.

It’s tempting to keep a vehicle even if your insurer declares it totaled. Most states let you keep your car after your insurer totals it, but the cost of repairs and process to make it legal to drive again may not be worth it.

Keep reading to learn what it takes to keep a totaled vehicle and when it’s worth keeping.

Can You Keep a Totaled Car?

Whether you can keep a totaled car (a process known as “retaining salvage”) depends on your state’s laws. Each state has a threshold for totaling a vehicle, which means the cost to repair it must be a certain percentage of the car’s fair market value (FMV).

The total loss threshold is anywhere from 60% to 100% of the vehicle’s actual cash value (ACV). For example, New York has a 75% threshold, Oklahoma’s is 60%, and it’s 100% in Arizona.

Some states use a total loss formula (TLF) instead of a threshold to determine if a car is totaled. The TLF compares the vehicle’s ACV to the repair costs and its salvage value. If the cost of repairs and salvage value equal or exceed the vehicle’s ACV, your insurer considers it totaled.

Most states allow you to keep a totaled vehicle, but some have stipulations. For example, Illinois will only allow you to keep a totaled car if it’s nine years old or older or if it only has hail damage that doesn’t compromise operational safety.

Not all cars are worth keeping — we’ll cover why next.

Is It Worth It to Repair a Totaled Car?

After the insurance company totals your car, it can be a long, tedious, and sometimes difficult process to get a rebuilt title so it’s roadworthy again. First, you have to apply for a salvage title or certificate and then fix the vehicle. It may be expensive to fix, especially if there’s severe damage.

You can’t legally drive the car until repairs are complete, it passes multiple inspections, and you get a rebuilt title. Even after you get a rebuilt title, it might be hard to reinsure it.

Many insurers won’t cover rebuilt titles or may only offer liability-only insurance instead of full coverage. The vehicle history report will also include the total loss, which can diminish its value and make it hard to sell in the future.

If you still think it’s worth it to repair your totaled car, here are some steps you can take.

5 Steps to Take to Keep Your Totaled Car

The most important thing you need to know is your state’s requirements and the steps you need to take to get your vehicle back on the road. Though these steps may vary in some states, here are the general steps to keep your totaled car:

1. Research your vehicle’s value. Check Kelley Blue Book (KBB), Edmunds, or local car dealers to find comparable vehicle values in your area and estimate your car’s ACV before the auto accident. Your insurer will pay up to the vehicle’s ACV minus its salvage value.
2. Negotiate with your insurer. Work with the claims adjuster to reach a settlement offer. If you think it’s too low, negotiate the offer using your book-value research.
3. Buy the car back. Discuss the process of buying the vehicle back with the adjuster to find out who’s responsible for notifying the department of motor vehicles (DMV) about the totaled car. You’ll then complete the settlement process to keep the vehicle.
4. Repair the car yourself. Get an estimate to determine what repairs the vehicle will need and what it would cost to repair it. Work with the repair shop to complete the work or do it yourself.
5. Get a rebuilt title. Once you fix the car and complete the state-required inspections, the next step is to get a rebuilt title. Next, you can get an insurance policy to tag it and legally drive it.

Let’s look at common situations in which keeping a totaled vehicle may be the right thing to do.

Potential Reasons to Keep a Totaled Car

Understanding the repair work and expense involved can help you decide if you should keep a salvage vehicle. Just remmeber that it can be a long and intense process to get your damaged vehicle roadworthy and receive a rebuilt title so you can drive it again.

Here are some reasons why it might be worth the hassle of keeping your totaled car:

• You want to sell the car to a salvager, junkyard, or at auction.
• You want to donate the car to charity to write it off as a tax deduction.
• You can get a rebuilt title without having to pay for repairs if the car only has cosmetic damage and operates safely.
• You found an auto insurer that will cover your rebuilt title vehicle.
• You won’t need collision or comprehensive
• You want to use your car’s old parts for another vehicle or restoration project.
• The car has sentimental value and is worth the repair investment and retitling costs.

Pros and cons of keeping your totaled car

For most people, it’s probably not worth keeping a totaled vehicle. But if your car doesn’t have much damage and you’re thinking about keeping it, consider the pros and cons first. This can help you decide if it’s worth the time, effort, and repair cost.

Can You Still Drive a Totaled Vehicle?

No. You can’t legally drive a totaled vehicle until you repair it, pass inspection to prove it’s drivable, and get a rebuilt title from the DMV. Once you get the rebuilt title, you can buy insurance coverage so you can retag the car. Only after completing these steps can you legally drive a totaled car.

Here are the steps to take to get a rebuilt title.

How to get a rebuilt title for your totaled car

The process to get a rebuilt title can vary by state, vehicle value, and model year. You’ll generally have to complete a rebuilt title motor vehicle application, pay the appropriate fees, and pass an anti-theft and safety inspection. This is after the steps you’ll take to keep the totaled car.

You’ll also likely have to provide other documents, which may include:

• Color photos of the damaged car before and after repairs are complete
• Parts and body shop receipts
• Proof of ownership
• Salvage title
• Completed motor vehicle inspection application

Before deciding to keep your totaled vehicle, it’s a good idea to familiarize yourself with your state’s rebuilt-title process and fees.

What to do if you still owe money on a totaled vehicle

If your car’s value is low, you might not get much money in the settlement. But you’re still responsible for the remaining balance on your auto loan or lease. If you have gap insurance on your car insurance policy or through the finance company, it could pay the difference between the vehicle’s value and your outstanding car loan amount. If not, you’ll have to pay the balance out of pocket.

Totaled Car FAQs

We answered the most common questions about keeping totaled cars to help you decide if it makes sense to repair and retitle your totaled vehicle.

Do you have to tell the DMV about your totaled vehicle?

It depends. Your auto insurance company typically notifies the DMV about your totaled car, but it can vary by insurer and state.

You’ll need to give the vehicle’s title to your insurer when you sign the total loss claim paperwork to receive your settlement amount. The title goes along with the total loss notification to the DMV.

Can you prevent your car insurance company from totaling your car?

No. If the repair costs of a totaled car are greater than or equal to the vehicle’s market value and meet the state laws to total it, your insurer will total the car. You can dispute your insurer’s decision if you provide proof that fixing it will cost less or that it’s worth more than the adjuster says.

Can you get car insurance on a totaled vehicle?

No. Insurance companies won’t insure a totaled vehicle. You have to get a salvage title and complete the process of making the car roadworthy again, which includes repairing it, passing state inspection, and getting a rebuilt title. It’s worth getting auto insurance quotes before you do these steps because some insurers may not insure the vehicle or only offer liability coverage.

Data Methodology:

Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.

All the rates listed in this article have been collected from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide readers with insights into how auto insurance companies determine their premiums.

Sources:

1. Illinois Department of Insurance, “Total Loss Auto Claims with Your Insurance Company,” accessed July 29, 2024.
2. Tennessee Department of Revenue, “Salvage Certificates and Rebuilt Vehicles,” accessed July 29, 2024.

Mandy Sleight Auto Insurance Writer

Mandy Sleight has over 15 years of insurance knowledge and expertise in auto, home, life, health, pet, supplemental benefits, and other insurance products. She is a sought-after insurance expert, appearing in Bankrate.com, Moneygeek.com, U.S. News & World Report, Reviews.com, CNET, and other publications. She uses her background and experience working for well-known insurance companies like State Farm and Nationwide Insurance to create engaging and easy-to-understand content to help readers make smarter insurance choices that have a positive effect on their budgets and finances.