Here’s the latest reader question, along with my reply!
Mike asks: I got into an accident this month (Aug. 2020) and took the truck to Toyota Collision Center and was informed two days later that the truck is going to be totaled, due to repair cost being more than the value of truck. It was front end damage at first inspection, then when lifted, collision center said it had frame damage and stopped the work, and told me to look into the value of the truck because I would be paid out by the insurance company. My question to you, is it worth buying back truck and repairing the truck? If not how do I know the value of the truck through the insurance point of view, will I get a MSRP value of the truck?
My reply: As a general rule, when the projected repair cost exceeds 50 percent of the retail value of a vehicle, the insurance adjuster will recommend that it be “totaled.”
Whether it is worth fixing to you is another matter.
Variables include the nature of the damage – e.g., is it functional or cosmetic – and whether the payout you get from the insurance company will get you an equivalent replacement. The problem there, of course, is there is no such thing as an equivalent replacement – because every used vehicle is unique. You know your vehicle; its overall condition – how it’s been treated – and can form a more accurate idea as to the prospect of it giving you trouble down the road. With a “new” used vehicle, it’s much more of a gamble.
I’d consider getting estimates regarding the cost of fixing the physical/structural damage to the frame and so on. If the truck can be made safe to drive again at a cost that is reasonable, I’d certainly consider fixing it – using the money you get from the insurance company, which will be calculated on the basis of their assertion of its value – what they’d pay you for a “total” – vs. what you’d have to pay them to buy the vehicle back, unfixed.
The insurance company uses their own formula to determine “fair market value” – which is usually lowball vs. the values listed in NADA and other used car guides. Probably you will have to haggle over this. Your vehicle may be worth more – or less – than the “book” based on its overall condition before the accident, the mileage, any upgrades/mods you may have done – and so on.
I hope it turns out well!
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