Problem Solver: How To Value A Totaled Car

Steven Lang
by Steven Lang
problem solver how to value a totaled car

Hi Steve. In honor of the recent SAAB coverage, my 2000 9-5 recently decided to become a parts donor.

This whole experience has made me sick to my stomach. No thanks to the insurance company.

The SAAB got wrecked by yours truly. I was driving down a one lane road and somewhere between daydreaming and a sudden stop by the car in front of me, the front of my car got all smashed up.

At first I thought it was nothing. A headlight, turn signal lens, front bumper, a crack on the windshield and a bend on the hood. I would have no problem with just taking a smaller check and keep on driving it. The car only has 125k, and between a brand new turbo and a small oil leak, I’m perfectly happy with this car as my commuter.

The insurance company is offering $2700 if I keep it, and $3350 if I total it out. However I do have a lien on it and the check they are willing to give me if it’s totaled won’t cover my balance.

So what should I do?

Steve Says:

First off, that $3300 won’t be going to you if the car is totaled out. It will be going directly to the lienholder. I seriously doubt the lienholder will take that smaller check instead, perform the needed repairs, get it inspected and let you keep driving that SAAB with a salvage title. The potential liability involved with financing salvage vehicles these days is simply too great.

Believe it or not, totaling the SAAB can be a good thing for your bottom line in the end. Insurance companies have several forms that need to be filled out and transacted back and forth in the event that the totaled price of a car doesn’t cover the remaining finance balance.

Finance companies and dealerships hate the glacial like pace of this process, and many will consent to just zeroing it out if the deficiency is minor. If you financed with a large bank, you will likely have a deficiency balance unless you purchased GAP insurance. However if you did it with a Mom & Pop, or another company that doesn’t sell their notes, you may be able to get that balance zeroed out in the end.

When a lienholder agrees to zero out the balance the payout process is simple and straightforward. The insurance company gets the car. The lienholder gets a check. You get to move on with your life.

Consider the real world side of it. A lot of dealerships that self-finance prefer to get the money right away because they know you’re likely not going to pay the deficiency balance anyhow. So I would stay on friendly terms with that lienholder and see if it’s possible.

The second issue you have is valuation. Some insurance companies are incredibly fair to their customers while others are hellbent towards the proverbial screw job.

A $3350 valuation for a 2000 SAAB 9-5 with 125,000 miles may be fair depending on the model and the condition. You need to book it out.

To weigh it all in, I always tell folks to visit three sites to determine their vehicle’s value: Kelly Blue Book,, and NADAGuides. Kelly has improved their pricing models… but sometimes underprices older vehicles. Edmunds tends to have the strongest pulse on older vehicles. NADA covers the world of auto financing, and they tend to have the highest valuations of all.

Figure out those valuations, and be honest. Not sentimental. Take the high road. A car with a multitude of dents and dings is in fair condition, not average. A good car with some interior wear and a smidgen of paint fade is in average to good condition, not excellent.

Apply all three valuations and get an average. If the insurance valuation comes within 10% or $500 of your average, they are likely a fair broker. Anything more than that, and I would send them a letter highlighting the three valuations and your concerns.

One other thing. You can make special additions for some things that have been recently installed on your vehicle such as tires, a turbocharger (in your case), or certain modifications. Make sure you have those receipts! A detail, recent maintenance, or a minor repair isn’t worth a flip to the insurance company. But some hardware components can be monetized to your advantage. Add that turbo!

Notify the lienholder about your concerns, and talk with them before sending the letter. They may be doing the same exact thing as you. If the insurance company still doesn’t want to move then you can get a letter written up by a lawyer or even a consumer advocate. I have done a few of them (less than a dozen in over ten years). To be blunt though, I believe that persistence and a good presentation makes this step unnecessary except in extreme or high stakes cases.

Be friendly, be honest, and don’t be afraid to be persistent. It’s the squeaky wheel that gets the grease when it comes to insurance claims. Good luck!

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14 of 63 comments
  • Davefromcalgary Davefromcalgary on Jan 24, 2013

    This story only serves to reinforce the logic of paying cash for a used/cheaper new car rather than having payments on something new/newer/nicer/more expensive.

    • See 11 previous
    • DenverMike DenverMike on Jan 24, 2013

      @davefromcalgary I don't recommend the dishonest way for obvious reasons, but so what if a person forgets where they parked? Is that a crime? It's happened to me more than once, and so what? What if that place was Tijuana? Hey, it happens. What if I forget the keys hanging on the trunk lock? Been there, Done that... all of that, but just not all at the same time...

  • Markholli Markholli on Jan 24, 2013

    Claims adjusters can be absolutely ruthless and dishonest in their valuation of a vehicle. A few years back I had a '98 ES300 that was totaled while parallel parked...75 year old man got distracted and smashed into it. The adjuster gave me a low-ball offer, and among the reasons for his low price he cited "tires worn/need replacement," a $500 deduction. I quickly produced an invoice from Discount Tires showing that I had purchased tires only a few months previously. It's surprising how often people fail to realize that they can negotiate, and in many cases thousands of dollars are on the line. Trade-in value is another area where people often get the screw job.

  • RHD I wonder if these will be as easy to steal as so many other Kias are...
  • Zerog Isn't this the car that the self anointed AutoExtremist said would finally shut down Tesla AND the Prius?Just like his father - that Detroit bubble does him no good
  • Zerog When will the media admit that Mary Barra has simply been a disaster of a CEO, and "Dan the Man" Akerson is to blame?
  • Tassos When the Volt was on sale, it cost twice as much as the (better looking!) Chevy Cruze on which it was based. The interior of the Volt did not match that lofty price either. I like plug-in vehicles with a good Electric only range and no range anxiety. People with a 40 mile commute each way, if they were allowed to free charge at the office especially, could save some $ with the Volt, but not as much as to justify its lofty price.The 2nd gen VOlt was less nerdy looking than the 1st, but also even more similar to the new Cruze and indeed the Civic, which cost almost HALF. Then the geniuses at GM made a 2-door Caddy out of the Volt, the ELR, which was much smaller inside than the already cramped Volt, and... asked for... 4 times the price of the CRUZE. Don't remember the failed Caddy Cimarron? Neither did those morons.So a good idea in principle was screwed beyond recognition. GM Bled billions despite the lofty price, sold a bunch of VOlts, and finally had to cry "UNCLE". The end.I am not at all attracted by the VOlt's lousy interior. Its gas only MPG is also lousy compared to the ICE competition. A prius was 50% cheaper and far more sophisticated mechanically and got a stellar 50 MPG overall, and could be had in plugin with 10-20 mile range (the current one will double that again).
  • Buickman GM marketing killed many a car.