Why Does Salvage Value Matter?
Knowing your car’s salvage value is important because:
- It helps determine the payout you’ll get in a total loss insurance claim.
- It affects how much you can recover from selling a damaged vehicle.
- It can influence repair vs replace decisions.
- It impacts used car resale values if the car had a salvage title.
How Is the Salvage Value of a Car Determined?
There is no single formula, but several consistent factors go into the equation:
1. Age and Condition of the Vehicle
Older cars typically have lower salvage value. But if it’s a rare model or has high-demand parts, it might still be worth something.
- A 10-year-old sedan with common parts? Low salvage value.
- A 5-year-old SUV with an intact engine and transmission? Higher salvage value.
2. Extent of Damage
The more extensive the damage, the less value it holds. However, if key components like the engine or transmission are untouched, those can increase the salvage price.
3. Market Demand for Parts
Certain vehicles have high-demand parts in the resale market. Salvage yards or rebuilders are willing to pay more for those.
Example: Toyota and Honda parts often retain decent value due to their wide user base and part interchangeability.
4. Location and Local Scrap Metal Rates
Your geography affects the value. Some states have higher scrap metal prices or more competitive salvage yards, increasing potential returns.
You can track current scrap car prices using this guide from Junk Car Medics.
5. Title History and Previous Damage
Cars with prior accidents or salvage titles usually fetch less, even in salvage. A clean history boosts credibility, even when damaged.
6. Salvage Buyer Type
Whether it’s a:
- Scrap yard
- Used parts dealer
- Private buyer
- Insurance auction (like Copart or IAAI)
…the buyer type influences the price. Insurance companies often sell to the highest bidder in auctions.
You can explore current salvage auction listings at Copart and IAAI.
7. Vehicle Make and Model
Luxury brands, trucks, and SUVs often hold more salvage value than economy cars because their parts are pricier and in higher demand.
Example: A damaged Lexus RX will fetch more than a similarly damaged Hyundai Elantra.
How Do Insurance Companies Use Salvage Value?
When your car is declared a total loss, the insurance company typically calculates:
Actual Cash Value (ACV) – Salvage Value = Insurance Payout
If your car’s repair cost exceeds its ACV minus the salvage value, they’ll “total” it and offer you the payout.
You can negotiate if you believe your vehicle’s ACV or salvage value is miscalculated. Presenting recent maintenance records or third-party valuation reports (like from NADA Guides or Edmunds) can help your case.
Can You Keep a Salvaged Car?
Yes, many states allow you to retain the salvaged car after an insurance claim. But you’ll receive a reduced payout equivalent to:
Insurance Payout – Salvage Value = Final Amount
You can then repair and re-title the car (as a “rebuilt title”) or sell it for parts. But be cautious — rebuilt titles often affect resale and financing options.
Tip: Learn more about how salvage and rebuilt titles affect car value in this article by Carfax.
Can You Increase a Car’s Salvage Value?
Absolutely. Here’s how:
- Remove valuable parts (engine, stereo system, catalytic converter) and sell them separately.
- Get multiple quotes from different buyers or junkyards.
- Provide documentation that shows maintenance history or part replacements.
- Sell in the right market — demand is higher in some regions.
Conclusion: Know the Worth of What’s Left
Understanding how the salvage value of a car is determined gives you a stronger hand whether you’re dealing with an insurance adjuster, negotiating a sale, or planning next steps after an accident.
It’s not just about what’s broken — it’s about what’s left and how you use it.
Need help determining your car’s value post-accident?
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