Determining salvage car prices becomes very important for those who have a vehicle that has either been through a natural disaster or involved in a very serious wreck. At this point, an auto insurance company may write off the car, which means that the only option is to sell it.

Serious auto accidents can lead you down the path of a salvage title car after only a single impact. Often, this is because the frame will bend and once that happens, you find that many vehicles no longer operate the way there were intended to.

Even after a repair job has been carried out, you may find that there are alignment, brake, tire, or other issues. It’s unfortunate to think that one major auto accident can do this, but that’s the reality.

In any case, you’re here to learn about salvage value calculation, so without any further ado, it’s time to jump in!

What Does “Salvage Value” Mean?

The question, “what is the value of my car?” can have different answers at different times. Initially, the value of your car may be its cost price less depreciation in the absence of a serious wreck.

After auto accidents happen, the answer changes, and now the value of your car refers to its salvage value. Even this term can mean different things.

Most commonly, the idea of salvage value is applied to vehicles that have been assigned a salvage title. This simply means that some significant accident happened, which has led the insurance company to write the vehicle off as a complete loss.

Salvage vehicles are sometimes sold after repairs, while others are sold to a junkyard, such as Max Car Removals for scrap and recycling. After all, we do offer some of the best salvage car cash offers that you can find.

In another instance, the idea of salvage value will apply to a car that has serious mechanical problems that can’t be repaired or those with significantly high mileage.

Why Would You Need to Know a Car’s Salvage Value?

People typically have the decision to make where salvage title vehicles are concerned. How will they be addressed? If you want to use the salvage value when selling your car, calculating it will allow you to do so.

Even if you’re simply estimating, it helps to understand where you stand and the extent to which whatever offers you are getting are worth it.

How Does an Insurance Company Treat a Car after a Major Auto Accident?

Under normal circumstances, a total loss event means that the insurance company will require the insured party to sign over the car’s title. At this point, the company will be the one to calculate salvage value numbers for estimate purposes.

This is a precursor to selling it for junk. Additionally, going this route means that the junkyard will also assist with the disposing element of things.

The application of a salvage title is an indication that the car is not drivable as it is. There are instances of these vehicles being repaired to a point of being operable again and being resold to the public instead of being used for their parts.

How to Calculate the Salvage Value of My Car

If you want to get the Cash for Cars Perth Expert team to pay you, you’ll need to know what the retail and wholesale value of your car is. These metrics are essential because you will also need them to find the car’s current market value. This will all come together to help you establish the salvage value of the vehicle.

The whole process is as follows:

Select an industry resource that can help you to find the retail and wholesale value of the vehicle.

Once you have obtained these, you want to add the two, then divide the sum by two. Doing this will yield the car’s current market value.

The next step is to reach out to your auto insurance company. Your aim is to find out what percentage of market value it uses in salvage value calculations. Different insurance companies can determine salvage values with different percentages. However, Australian ones tend to use 75%.

You need the current market value you determined earlier, as you will now be multiplying it by the difference between the percentage the insurance company uses and 1.00. In other words, if 75% is used, you will multiply the current market value by 0.25 since 1.00 – 0.75 = 0.25.

This figure is your vehicle’s salvage value. Here’s an example. Say the wholesale value of your car is 20,000 AUD and the retail value is 30,000 AUD.

(20,000 + 30,0000) / 2 = 25,000 AUD (current market value)

If the insurance company uses 75% for determining salvage value, then:

1.00 – 0.75 = 0.25

25,000 AUD x 0.25 = 6,250 (salvage value)

Is the Value of a Salvage Vehicle Different from Its Depreciated Value?

While the depreciated value can incorporate accident-based damage, it is simply a measure of the dip in a car’s worth as it ages. The value of a salvage car, on the other hand, is based on factors, such as a serious wreck that leaves a car in an unfit condition to be driven.

Is Selling My Salvage Car an Option?

Yes! Depending on your situation, it may be the only logical option that’s available to you since the typical used car value will no longer apply. However, if your car is going to be heading to a scrap yard, you at least want to know that the one it’s going to will give you a fair price for the vehicle.

That’s just one of many reasons why Max Car Removals is your premier choice!

The Bottom Line

After a serious accident, an insurance company may write off the vehicle as a total loss and have it sold to a scrap yard. In other cases, the insured party may be allowed to keep the vehicle.

The options here are limited, which is why the best way to go is to sell the salvage vehicle to a reputable scrap yard. If you find yourself asking, “what is the salvage value of my car?” use the calculation steps above as an estimate.

Note, however, that this estimate may not reflect the actual price. In any case, Max Car Removals will take care of things from end to end, collecting your salvage car and giving you a best-in-class cash offer!

Give us a call at 0478 500 021 if you want to sell your car today!