Expert: Charlie Barone - 5/8/2009

Question
How does one go about determining the salvage value of a car? Especially when
dealing with an insurance company that has determined that the damaged car
will be totaled? I believe if I insist on keeping my car (State allowing), they will
adjust their offer by subtracting the salvage value of the car from their
settlement offer.  Thank you in advance.

Answer
Typically an insurance company will deduct 20% from the actual cash value (ACV) of the settlement for your car if you decide to keep it. If that amount appears excessive you may ask them to show you an actual offer to purchase your car in its damaged state. However, most companies don't have salvage operators bidding on individual cars and have arrangements set up in which the salvage operations will pay a fixed percentage of the ACV in lots.

I assume you have agreed on the ACV of your car prior to the loss, but in case that amount seems insufficient, the term refers to the cost to replace your car with one of like kind and quality, plus applicable sales tax and license transfer fees, less your deductible.