Can I Keep My Car if it’s Totaled?
For New York City drivers, having a car declared totaled can be extremely stressful, whether the accident happened on a crowded Manhattan avenue, a Brooklyn side street, or a major highway like the Cross Bronx Expressway.
Deciding what to do after having your vehicle declared totaled isn’t always straightforward, especially if you want to keep your vehicle. The answer to whether you can keep a totaled vehicle depends on several factors, including your financial situation and how the vehicle fits into your life in NYC.
The most important of these factors is whether you own the vehicle free and clear. If you’re still paying for it, then the final word will have to come from your bank or finance company. You should also consider whether the vehicle is worth keeping in its present condition. Sometimes a totaled car or truck can be safely repaired. Other times, it’s just not worth the hassle.
Keep reading to learn more about totaled vehicles, salvage vehicles, and your options if your vehicle is declared to be either of those.
Insurance companies use a complex set of metrics
Americans love their automobiles. The ability to go where we please when we please is integral to our way of life. But no mechanical device runs forever. Sooner or later, it’s time to let it go.
In many cases, it is the result of an accident. But whether it’s worthwhile to repair a damaged auto is up to an insurance adjuster– whose opinion may or may not be shared by the vehicle’s owner.
Insurance companies use a complex set of metrics to judge whether a car can be safely repaired. The keyword here is “safely.” No insurance company will risk putting one of its clients in an unsafe vehicle– that’s asking for trouble.
But safety is only one factor that adjustors consider. An added question is how much the needed repairs will cost. If the tab adds up to more than the vehicle is worth on paper, then the company will likely declare it a total loss.
What happens when your car is deemed a total loss?
The company will write you a check for the book value of the car– unless it’s financed, in which case your bank will get the check. Whether you still owe anything will depend on the loan balance.
For example, let’s say that you own a 2010 Nissan Sentra. You’re involved in a crash, your insurer sends an adjuster to evaluate the damage, and he declares your Nissan a total loss.
Let’s also say that you still owe $5,000.00 on your loan. But your insurer says that the vehicle is only worth $2,000.00 in its present condition. The bank gets a check for $2,000.00, and you still owe the remaining $3,000.00.
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What’s the difference between a “totaled” car and a “salvage” car?
After a serious car accident, insurance companies and state agencies often use terms like “totaled” and “salvage” to describe the conditions of the vehicles involved in the crash. While the terms are related, they have very different meanings and legal implications. Understanding how these designations differ can help you make informed decisions about your insurance claim and next steps.
Totaled Car
In New York, a car is generally considered “totaled” when an insurance company determines that the cost to repair the vehicle equals or exceeds a certain percentage of its pre-accident value.
Under New York insurance industry standards, this threshold is typically around 75% of the vehicle’s actual cash value (ACV). Once a car is deemed a total loss, the insurer may offer a settlement based on that value rather than paying for repairs, even if the vehicle could technically be fixed. A “totaled” designation is an insurance determination and doesn’t automatically change the vehicle’s title.
Salvage Car
A “salvage” car, on the other hand, is a legal classification under New York State law that affects the vehicle’s title and future use. If a totaled vehicle is not surrendered to the insurance company and meets certain criteria, including being eight model years old or newer, the New York State Department of Motor Vehicles (DMV) may require it to be issued a salvage title.
A salvage title indicates that the vehicle has sustained significant damage and cannot be legally driven or registered until it is properly repaired and passes a DMV salvage vehicle examination. In New York City, where inspections and enforcement are strict, driving a vehicle without the correct title status can lead to fines, registration issues, or impoundment.
What if I still have financing on my totaled car?
If your car is declared a total loss but you still have an outstanding auto loan on it, the insurance payout doesn’t end your financial obligation to the lender. In most cases, the insurer will issue payment based on the vehicle’s ACV at the time of the crash, and that money typically goes directly to the lienholder first. If the ACV is less than what you still owe on the loan, you are responsible for paying the remaining balance out of pocket unless you carry gap insurance.
If you want to keep a totaled car that still has financing, the process becomes more complicated. Because the lender has a legal interest in the vehicle, you generally need their approval before retaining it, and the insurance company may deduct the car’s salvage value from the settlement.
You will still be required to continue making loan payments, even though the vehicle has been deemed a total loss. Before agreeing to any settlement or salvage arrangement, it’s important to understand how your loan, insurance policy, and New York regulations interact, as keeping a totaled vehicle with an active lien can create long-term financial and legal challenges.
Are there good reasons to repair your vehicle and keep it going?
Making payments on a vehicle you no longer own can be frustrating– which is one reason to repair it and keep it going. But is this a wise move? It depends. Here are some of the factors that can affect your decision:
- Your ability to do the repairs yourself: Let’s say that you’re an accomplished DIY mechanic with a back yard full of used auto parts. After looking over the vehicle, you decide that you can get it back up and running for a few hundred bucks, far less than the cost of replacing it.
- The bank’s perspective (if the car is still financed): You will need to obtain the lender’s permission to keep the totaled car. If they refuse, then you have a legal obligation to let them claim it.
- The feasibility of insuring the repaired car: Even if you’re able to complete the repairs, you may have trouble getting an insurance company to extend coverage. Insurers are usually reluctant to insure a vehicle that’s considered a total loss, no matter how skillful the mechanic is who works on it.
- The safety of you and your passengers: Even if you make the car drivable, for your own sake, you’ll need to make sure that it’s safe to operate. Otherwise, you’re setting yourself or your passengers up for a calamity down the road.
- Your emotional attachment to the vehicle: This is a subjective matter, of course. But, if you’ve grown sentimental about the vehicle and can’t stand to part with it, then who’s to fault you for moving heaven and earth to keep it around.
Where can I get my vehicle repaired in NYC?
If you want to repair your vehicle with the help of professionals, choosing the right repair shop is an important step in getting back on the road safely. The repair shop you choose should understand insurance claims, can work efficiently in a fast-paced environment, and are familiar with the types of damage caused by city traffic, tight parking, and frequent stop-and-go collisions.
Below are several reputable options across the five boroughs.
- Caliber Collision: Caliber Collision operates multiple locations throughout New York City and is known for handling insurance-approved repairs, collision damage, and structural work. Their experience with insurers can help streamline the claims process while ensuring repairs meet safety standards.
- Gerber Collision & Glass: With locations in and around NYC, Gerber Collision & Glass specializes in collision repair, auto body work, and glass replacement. The shop is accustomed to working with major insurance carriers and repairing vehicles damaged in urban traffic accidents.
- Maaco Auto Body & Paint: As a well-known national chain with NYC-area locations, Maaco offers collision repair and bodywork at a range of price points. It can be a practical option for drivers looking to address accident damage while working within an insurance settlement or budget.
Still have questions? Contact us at Douglas & London today
Insurance and auto finance are complex topics that often require expert assistance. Get in touch with the New York City car accident lawyers here at Douglas & London—over $18 billion in accidents and settlements. Our results speak for themselves.
