Can I Choose to Keep My Car?

Question:  I was involved in a pretty serious car wreck in Dallas, Tx.  Attorney tells me that the insurance company wants to total my car and give it to them.  I want to keep my car and fix it.  Can I keep my car or do I have to turn it over to the insurance company?

Robert’s Answer:  You can elect to keep your car.  This is called “retaining the salvage.”  This is how it works.  If you car is so badly damaged in a car wreck that it is a total loss, it will still have some sort of salvage value.  That means it can be sold for parts to a salvage yard.  The salvage value will depend on the type of car you have and the extent of the damage.

Once the insurance company determines that your car is a total loss, they will do two things. First, they will do a market analysis and estimate the fair market value of your car at the time and place of the accident. Let’s say the fair market value was $10,000 within the Dallas area.  Second, the insurance company will solicit bids from salvage yards for your totaled car.  Let’s say the highest bid is $3,000.

At this point you will have two options.  You can elect to take the $10,000, but you would have to give the car over to the insurance company.  They will then turn around and sell it for $3,000 to the highest salvage bidder.  Or, you can elect to keep the car.  If you choose to do this, then the insurance company will deduct the salvage value of $3,000, and pay you the $7,000, difference.

Many people choose to keep the car because they have the opportunity to get it fixed cheap.  However, just keep in mind that if you choose to do this, then the repairs are rarely guaranteed and your car will now have a salvage title.  This will most likely effect the final value of the car once the repairs are completed.