If your car has been involved in an accident, has been the victim of a natural disaster, or has undergone too many modifications, it will most likely be marked off as a salvage vehicle. This means that the car has been declared a total loss by an insurance company and given a salvage branding that indicates the vehicle cannot be driven, sold, or registered in its current condition.
Although salvage brandings are permanent and cannot be removed, in some countries, salvage title cars can get new branding and be sold again. However, all future buyers will still know that the vehicle was declared a salvage at one point.
Anyhow, the real question still remains—what is the value of a salvage vehicle? To find out the answer to this question, keep reading this guide.
In order to estimate the salvage value of a totaled car, all you have to do is multiply the car’s current market by 0.25. The outcome you will get from this calculation will always be much lower than the current market value of the car.
However, there are also a few factors that can affect the salvage value of the vehicle such as:
- The current price of scrap metal;
- The overall condition of the vehicle, which includes assessing the worth of its scrap metal and auto parts;
- The demand for certain car parts;
- The age and model of the vehicle.
How to Sell Your Vehicle for the Best Salvage Value
How you choose to sell your totaled car can also affect its salvage value. There are several selling paths you can take, all of which can make your salvage car fetch a different price. Some common selling options include junkyards, dealerships, private buyers, and online.
For instance, junk car buyers are the ideal place for selling high-maintenance cars that won’t be driven anymore. Here, your vehicle will be valued based on its individual parts and its overall metal, so it is necessary that you look for a reputable junk car buyer to get the best rate.
For instance, if you live in San Antonio, TX, shop around for the nearest junk car buyer and discuss with the experts how to sell your junk car in San Antonio fast and get the best salvage price.
When your vehicle is declared a total loss, it will be placed in a category that references the type of damages it has suffered. If your car is written off and marked as irreparable, it will most likely be assigned either a Category A or Category B.
However, for salvageable cars which may return to the roads and be resold again, then categories S and N are used.
For instance, Category S refers to vehicles that have structural damage and have been written off by an insurance company because of the cost of the repairs needed. These types of cars can only be returned to the streets if they are repaired professionally.
Category N, are vehicles that have not sustained any structural damages, but cannot be repaired due to economical reasons. They can only return to the roads if the faults or damages are fixed by a salvage buyer.
Salvage Value vs. Depreciated Value
Understanding the difference between the salvage value of a vehicle and its trade-in worth is important because they both differ. In other words, if a car is purchased at $30,000 and has a five-year life, then its depreciated value will be reduced by about $5,000 per usage year. Based on this method, the salvage value of the same car will be about $5,000 at the end of its useful life.
In most cases, the salvage value is mainly determined by the sum of the working parts of the vehicle and its overall status. Depending on the type of damage the car has sustained in an accident or from natural disasters, the value can drastically change and differ from its depreciated value over the years.
Although calculating the value of a salvage vehicle may seem like a straightforward process, it is still confusing for many salvage buyers. That’s why it is important to be familiar with the factors that can affect the value of a vehicle and know what selling path one should take to get the best price. For more information, refer to our post and learn how to calculate the salvage value of your car.