Understanding Salvage Car Value Blue Book

The Blue Book value of a salvage car is determined by its market demand, condition, and mileage.

The National Automobile Dealers Association (NADA) and Kelley Blue Book (KBB) are two organizations that provide pricing guides for vehicles, including salvage cars.

The NADA Guide and KBB Guide are widely recognized and used by the automotive industry, including dealerships and insurance companies.

The Blue Book value of a salvage car can vary significantly depending on its make, model, year, and condition.

The Blue Book value of a salvage car is determined by the Kelley Blue Book (KBB) organization, which is a trusted source for determining the value of used vehicles.

The KBB takes into account various factors such as the car's make, model, year, condition, and mileage to provide an estimated value.

A salvage car's Blue Book value is typically lower than a comparable vehicle with a clean title, due to the damage or issues that led to the salvage designation.

LexisNexis Risk Solutions' latest Auto Insurance Trends report shows that total loss claims accounted for 27% of collision claims in 2022. Insurance companies total a car when the cost to repair the damage exceeds the vehicle's book value at the time of the crash.

Book value is another way of saying market value, and it's closely monitored by Kelley Blue Book. They track what every make and model currently sells for as it ages.

The book value of a car is determined by its actual cash value, which includes a reduction in value for depreciation. The actual cash value is how much the car was worth just before the loss.

In some states, like Colorado, the insurance carrier will total your car if estimated repairs exceed 100% of the fair market value.

The book value of a car is another way of saying market value, with Kelley Blue Book closely monitoring the automotive market to track what every make and model currently sells for as it ages.

To find the value of your vehicle in KBB, you need to find the make, model, and year of your vehicle in the Kelley Blue Book, either in print or online.

Matching the trim level to yours is essential to ensure you have the same options, and checking any other options on your vehicle will give you a more accurate estimate.

Entering the accurate mileage is also crucial to get the best results possible.

The majority of vehicles fall under the "Good Condition" category when trading to a dealer.

The fair market value (FMV) of a car is its book value at any specific time, like right before an accident. This value is used to determine whether a car is a total loss.

Some states, like Alabama, use a 75% threshold of the FMV to declare a car totaled. Others, like Colorado, use a 100% threshold. This means that if estimated repairs exceed 75% or 100% of the car's FMV, the insurance company will total the vehicle.

The FMV is calculated by considering the car's make, model, year, and condition. The insurance company will use this value to determine the ACV of the vehicle.

Here's a breakdown of how the FMV is used to determine a total loss:

It's worth noting that the FMV can vary depending on the state and the insurance company. If you're unsure about the FMV of your car, it's a good idea to check with your insurance company or a professional appraiser.

In some states, the insurance company uses a total loss formula to determine whether a car is a total loss. This formula is based on the FMV minus the salvage value of the vehicle.

If your car is totaled, you'll need to file a claim with your insurer just as you would for a minor fender bender. The insurance company will send an adjuster to assess the damage and estimate the cost of repairs.

The adjuster will conduct a visual inspection to determine the car's actual cash value, which is based on tools like Kelley Blue Book or what similar cars are selling for in your area. This value will be used to decide whether to declare your vehicle a total loss.

You'll need to contact your lender if you have a loan or lease, as the insurance company will pay them directly. It's essential to continue making payments to avoid negatively affecting your credit score.

To negotiate the claim with the insurer, you'll need to show why your car is worth more than their assessment. This can be done by providing evidence of the car's value, such as recent sales data or appraisals.

Here are the steps to take when your vehicle is totaled:

If your car is totaled, you'll want to file a claim with your insurer right away. Contact them just as you would if you were in a fender bender.

The insurance company will send an adjuster to assess your vehicle's damage, conducting a visual inspection to estimate the cost of repairs.

To determine your car's fair market value, you can use tools like Kelley Blue Book or check what similar cars are selling for in your area.

If you have a loan or lease, you'll need to inform the financing company about the damage and continue paying your payments. This will help protect your credit.

If you think the insurance company's assessment of your car's actual cash value is too low, you can negotiate the payout. Be prepared to show why your car is worth more than what they're offering.

You can use the payout from your insurance company as a down payment on a new or used car. Just remember that the payout likely won't be enough to buy a new version of your old car.

Here are the steps to take when your vehicle is totaled in a concise list:

If you don't think the insurance company's payout is fair, you can dispute it by submitting a counteroffer. This can be a good idea if you believe the insurance company is lowballing you on a total loss settlement.

You can start by getting an appraisal from a private appraiser, which can cost you out of pocket. If the appraiser's estimate is higher than what the insurance company offers, you can use it to negotiate.

To get the insurance company to seriously consider your counteroffer, you'll need to provide evidence of your car's book value at the time of the crash. Kelley Blue Book can help with this information.

You'll also need to research and provide pricing for comparable vehicles selling in your market. This can be done by checking prices online or in local car sales.

Once you have all the necessary information, submit the counteroffer and supporting documents to the insurance company. If they still refuse to budge, you can file a complaint with the department in your state regulating insurance companies.

As a last resort, you can hire an attorney and file a lawsuit against the insurer. This should be a last option, as it can be costly and time-consuming.

Here is a step-by-step guide to disputing a total loss settlement:

Calculating salvage car value can be a complex process, but understanding the basics can help you navigate it. Your insurance company will use one of two methods to determine a total loss, either the Fair Market Value or the Total Loss Formula.

The Fair Market Value method involves setting a percentage of the car's value as the threshold for declaring a total loss, which varies by state. For example, in Alabama, the threshold is 75%, while in Colorado, it's 100%. If estimated repairs exceed this percentage, the car is considered totaled.

To calculate the salvage value, you'll need to multiply the market value of your car by the percentage determined by your insurance company. For instance, if your insurance company uses an 80% threshold and your car's market value is $7,000, the salvage value would be $5,600.

Here's a rough estimate of the percentage thresholds used by insurance companies:

Keep in mind that salvage prices can be negotiable, and you may be able to get a higher valuation if you can prove modifications, accessories, or lower-than-average mileage.

To find the retail and trade-in value of a salvage car, you can use websites like NADA and Edmunds.com. These websites provide accurate estimates of your car's value based on its make, model, year, and condition.

The National Automobile Dealers Association (NADA) guide offers values for rough, average, and clean trade-ins, as well as for clean retails. You can check NADA for your car value and compare it with the values provided by Edmunds.com.

For example, if the retail value of your car is $8,000 and the trade-in value is $6,000, you can calculate the market value by adding these two numbers together and dividing by two.

Here's a simple formula to calculate the market value:

This will give you an estimate of the vehicle's market value, which is essential for insurance claims and negotiations.

Calculating the salvage value of a car can be a bit of a challenge, but it's essential to get it right to ensure a fair settlement. The insurance company will use one of two methods to determine the total loss, either the Fair Market Value or the Total Loss Formula.

The salvage value is determined by multiplying the market value by the percentage used by the insurance company, which is usually between 75 and 80%. For example, if the market value is $7,000 and the insurance company uses 80%, the salvage value would be $5,600.

You can also use online valuation tools to determine the salvage value, which can provide an estimated value based on market data and algorithms. These tools can save you time and effort, and often provide detailed reports and comparisons.

The insurance company may also consider additional factors such as rental car charges, part availability, and the type of repair when determining the salvage value. If a major component is discontinued and unavailable aftermarket or used, the car may be deemed a total loss at a much lower percentage.

Here's a quick reference to the steps involved in calculating the salvage value:

Remember to discuss any concerns or discrepancies with your insurance agent, as salvage prices can be negotiable.