Car accidents are some of the most stressful times a person can experience for a number of different reasons. You’re dealing with your insurance company, possible injuries, and all the inconveniences that come when you’re without your car. The only thing that can make the situation worse than what it is would be the body shop telling you your car is totaled.
Any car that might be deemed a total loss (or totaled) also runs the possibility of the owner owing money on the car. What makes the situation even worse is if there’s negative equity on the car. It can feel like the end of the world when a body car deems your car a total loss. However, this can actually be a good thing and we’re here to let New Jersey drivers know why.
When cars are totaled, or deemed a total loss, it’s when the repair cost estimate is 70% or higher of the Actual Cash Value (ACV) of the car. For example, if your car was worth $10,000 and the repair estimate was $7,000, your insurance company will probably total it even though the repair costs less than a replacement.
We know this can be an extremely confusing time for New Jersey rivers, especially when you’ve heard stories of cars being totaled that can still operate, even if the repair is 75% of the ACV. Even if the repair cost is less than the vehicle’s value, it may not make sense to repair the car, depending on the threshold percentage. We’ll get to that a bit further down.
Here’s what you need to know about what cars get totaled and why:
Cars aged 1-3 years
Depending on how bad the damage is, most likely a car that is within this age range will not total. The average cost of a one-year-old vehicle is a little over $3,000, and with a value of over $25,000. Only 7% (if not fewer) of these vehicles are considered a total loss.
Cars aged 3-5 years
Will it total? Here’s where mileage and condition start to enter the equation, along with just how severe the damage is. Remember, the insurance adjuster is going to appraise the car as it was before the collision. If your car had excessive wear, or high mileage, or unrepaired damage, the ACV would be lower. This will bring you closer in range to the repair costs. Higher priced luxury vehicles, trucks, and SUVs will probably get the green light to be repaired. Although, lower-priced compact cars and some sedans could possibly get totaled even at 5 years old.
Cars 6 years and older
Any vehicle involved in a collision that is 6 years or older will more than likely get totaled. A vehicle that is 10-15 years old has an average repair cost of $2,000, but the value is just barely over $6,000. When determining the vehicle’s threshold (discussed below), all these factors come into consideration. The good news is for cars this age is more than likely paid off. As a result, you’ll end up getting a nice sum to put as a down payment on your next vehicle.
Total Loss Threshold
According to carinsurance.com, a total-loss threshold is, “the point where an insurer must legally declare a car totaled and apply for a salvage title.”
Where in the country you are located will determine how or what the total loss threshold will be. This is because 22 states use something known as a “total loss formula (TLF)” instead of a specific threshold percentage. According to carinsurance.com, a total-loss threshold is, “the point where an insurer must legally declare a car totaled and apply for a salvage title.”
Here in New Jersey, we are one of the 22 states that don’t give an exact threshold percentage but instead use a total loss formula (TLF). This is when insurers evaluate the cost of repairs plus the vehicle scrap value. If the number is lower than the ACV of your car, your insurance company may decide to repair it. However, if the amount is equivalent to or higher than the ACV prior to the accident, then your vehicle will be totaled.
The Silver Lining
If you find out your car was totaled, it may feel like the worst-case scenario. In actuality, you wouldn’t have wanted that car back. Sure, the decision is often based on what numbers work best for the insurance company. However, body shops want to make sure you’re driving a safe car and not an open target for getting in another accident.
Car repair today has gotten extraordinary complex due to the advancements in car safety technologies and are manufactured with tons of different sensors, cameras, and multiple high strength steels. They are also built to transfer crash energy away from whoever is occupying the car, which can cause damage to your car not even included in the accident. Any body shop can “fix” your car, but there are times it simply should not be repaired.
Your car’s manufacturer will instruct on exactly how your car should be repaired. If your accident involved areas that can’t be joined or welded or rivet bonded safely, then the vehicle should be totaled. If a body shop told you it’s a good thing your car was totaled, be thankful you walked away not only from the accident but from the additional aggravation that might arise from owning a car that “survived” a bad accident.
Why Choose Us
Here at Cherry Hill Collision know you have many choices on where to take your car to be repaired in New Jersey. When you come to our shop, your safety is our number one priority and we aim to show you why we are the best at what we do.
We feel that we are truly the best because are committed to giving you the highest quality of repair out there. All of our technicians are up to date on the latest OEM repair procedures and have received extensive training. You will never be left in the dark throughout the repair process. Once you get your car back, it will be looking, running, and operating as if it was brand new!
Let us help you with your auto repair process! We can be reached at (856)-663-0500. If you’d like to schedule an appointment or to get an online quote, click here to get started!
We look forward to hearing from you and helping you with any of your auto repair needs!
