Badly damaged vehicles are considered totaled.
Cars with mechanical problems or high-mileage vehicles have a lower salvage value.
Deductible
Insurance companies often charge a deductible as part of their collision insurance policy and deduct it from the salvage value they pay out.When the cost of car repair exceeds the trade in value of the vehicle, insurance companies consider the vehicle totaled, and pay the owner the salvage value rather than pay for repair. This is typically done in accordance with laws that prevent the resale of refurbished totaled vehicles, to keep dangerous cars off the road.
Determining Value
Determining the value of the car is a subjective task based on a number of factors. The main determination of the salvage value is to look up the "blue book" value of the car. This is the lowest price that a dealer would buy the car for. Other considerations are the condition of the car prior to the accident.After a severe crash, the bill of repairing a van may exceed the rate of the machine. In this example, an insurance collection writes the motorcar's owner a analysis for the salvage value. The salvage value is based on trade-in value and other factors.
