Should You Buy Back Your Totaled Car From Your Insurance Company?

If your car was vandalized, flooded, or in a huge wreck, then chances are that your insurance company may deem it a total loss. This is when the cost to repair the car is so great that it’s not worth repairing so the insurance company sends it to the auction. However, you have the chance to buy the car back from the insurance if you think that it’s still usable or repairable. But is that really worth doing?

Buying your totaled car depends on how damaged it is

A two car collision on a highway with emergency services on the scenes.
A two car collision | Getty Images

Whether or not it’s worth it to buy back your totaled car depends on damaged it is after the accident. If there is a lot of damage to the car’s frame, then it might not be worth it. But if the damage doesn’t look that bad and insurance totals it out anyway, then it could be worth it for you to buy it back from the insurance company.

If you don’t plan to drive it, but want to buy it back anyway, then there are a few things you can do with it including:

  • Using it for parts for another car  
  • Sell the parts off it for some extra cash
  • Sell it to a salvage yard
  • Donate it to charity

Whatever option you choose, it first begins with what the actual cash value of the car.

What is the “actual cash value of a car?”

Factors that can impact your car insurance rates
Factors that can impact your car insurance rates | Genaro Molina / Los Angeles Times via Getty Images

RELATED: What Happens if a Dealership Totals Your Car?

According to Kelley Blue Book, your car’s actual cash value (ACV) is “how much it was worth just before the loss.” That value doesn’t mean that you’ll get what you paid for the vehicle, though, as the car’s depreciation is also factored in.   

That all being said, the amount that your insurance company pays you out depends on the state that you live in. In Arizona, for example, the state threshold to total out a car is 70% of its ACV. That means if you have a car that has an ACV of $10,000, then the insurance company will deem it a total loss if the damage is $7,000 or more. In that case, if you wanted to buy the car back, then it’s up to you as to whether or not you think it’s worth it.

Buying back your car could lead to headaches later on

A silver vehicle that has hit a tree with snow on the ground.
Potential car accident in the snow | Getty Images

If you do plan to keep the car, then it’s important to understand what you’re getting into. Just because the damage doesn’t look too bad from the exterior of the car, that doesn’t mean that there’s more damage underneath it all. If you buy back the car, then you’re stuck with those repairs as well.

Additionally, your car will now have a “rebuilt,” “salvaged,” or “total loss” title, which will diminish its value should you try and sell it later on. Insurance is also a factor too since some insurance companies will only cover a salvaged car with liability only, and not comprehensive and collision since it’s hard for them to access the current condition of the car. That means that if you were to get into an accident again in the car, then you’ll really be out of luck.

Ultimately, it could be worth it to buy back your totaled car if the damage isn’t too bad. However, you could be rolling the dice with that. If all else fails, take the insurance payout instead and spend it on a different set of wheels. You may thank yourself later.

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