Keeping the insurance money and selling the car unrepaired

First question: repair claim or total loss?

Insurers sort damaged cars into two piles. Either the car is worth fixing and the claim pays toward a repair, or repairs cost too much compared with the car's value and the insurer declares a total loss. Which pile you're in changes everything about selling the car unrepaired.

Maryland spells out its line plainly. The Maryland Insurance Administration says a total loss means the repair cost is 75 percent or more of the car's fair market value right before the loss. The MIA adds two details:

• The insurer may add rental cost and potential hidden damage to the repair estimate when it works out that 75 percent.
• Cars the insurer finds to be a total loss must be labeled salvage vehicles.

Other states draw the line in different places, and some draw none at all. The table further down lists each one.

If the claim pays for a repair

This is the case the question usually means: the insurer writes a check for repairs, and you'd rather sell it broken. Our official sources don't answer it state by state, so treat the following as questions to ask, not rules:

• Who is the check made out to? If a lender or a repair shop is named, you may not be able to cash it alone.
• What does your policy say? The policy is the contract that controls repair money.
• Does the lender require repair? A loan contract can protect the lender's interest in the car.

If the answers leave you free to keep the money, you still own a damaged car. Price it as damaged when you sell, and be ready to tell a buyer what happened.

If the insurer totals the car

Here the sources are clear, at least for Maryland. A total-loss offer reflects the car's actual cash value immediately before the loss, and you pay the deductible. The insurer generally has 10 days to make a cash offer. If you think the car was worth more, you can negotiate, but you need documents to back a counteroffer (Maryland Insurance Administration).

Keeping the totaled car to sell it yourself

Maryland lists what happens when an owner keeps a car the insurer has declared salvage (MIA):

1. The settlement is reduced by the car's salvage value.
2. The insurer tells the MVA the car is salvage and that you kept it.
3. The MVA issues a salvage certificate for the car.
4. You send the original title to the insurer before it sends the settlement check.

So you end up with less cash and a car that now carries a salvage label. That trade can still make sense if the car is worth more to a buyer than the salvage value the insurer took off.

Other states have their own version. Montana issues the owner a salvage certificate when the title is surrendered, for a $5 fee, and the owner may then keep, sell or dispose of the car (MCA). New Mexico tells an owner who keeps a car after a payout to stamp the title SALVAGE or NONREPAIRABLE in letters at least half an inch high (NM MVD). In Illinois, the insurer owns a totaled car as salvage once it pays, except for hail-only damage or a car nine model years old or older, which the owner may keep by agreement (625 ILCS 5/3-117.1).

What the brand says in Ohio

Ohio skips the math. Once an insurer rules the car too costly to fix and pays you for it, the car is salvage. Its title then carries the notice "SALVAGE MOTOR VEHICLE - PURSUANT TO R.C. 4738.01." and a repaired car moves to a rebuilt salvage title (R.C. 4505.11).

When you still owe on the car

A loan changes who the money is for. New York's Department of Financial Services describes the gap on a financed or leased car that's totaled: it's the difference between the insurer's actual-cash-value payment and the amount you still owe.

DFS adds a detail worth checking in your own paperwork. Some loan or lease contracts say the insurer's actual-cash-value settlement is accepted as full satisfaction of the contract on a total loss, so no gap coverage is needed in those cases. If yours doesn't say that, read its total-loss terms before you settle. Our car loan guide covers paying off a loan when you sell.

Where each state draws the salvage line

This is the point at which a damaged car becomes salvage under each state's own law or agency page. Many states set a percentage of value; others leave it to the insurer's call.

Before you sell it unrepaired

Run through this list before you list the car or call a buyer:

• Settle the claim on paper. Know whether it's a repair payment or a total loss, and get the final figure in writing.
• Check the title. If the car was totaled and you kept it, the title or certificate may now read salvage. In Kentucky, a water-damaged car gets "water damaged" on the face of the title (KRS).
• Tell the buyer. Utah requires a seller to give the buyer written notice before selling a car with a salvage certificate or branded title, and ads must disclose it too (Utah Code). New Mexico makes it unlawful to sell a salvage car unless the title is branded (NM MVD).
• Check the loan. If you still owe on the car, get your payoff amount and ask the lender what it needs from you before a sale.
• Don't plan to drive it to the sale. Delaware won't let an owner-kept salvage car on the road until it's rebuilt, inspected and retitled (Delaware DMV).

Fix first, or sell it damaged?

Repair makes sense when the car is worth well more fixed than the repair costs, and you want to keep driving it. A car close to your state's salvage line rarely fits that. Once it's branded, the repair also has to clear a rebuilt inspection before the car goes back on the road in many states, which adds cost and time.

Selling as-is makes sense when the repair estimate eats most of the car's value, when the insurer has already totaled it, or when you simply don't want the car anymore. If the insurer offers to take the car, compare its settlement with what you'd net by keeping it: the payout minus the salvage deduction, plus what a buyer will pay for the damaged car.

Selling the damaged car to us

We buy whole non-running and junk cars. You can sell the whole car as it sits, and pickup is free anywhere in the US.

Tell us what happened, what the insurer decided, and what the title says now. If you'd rather talk it through, call (877) 421-6008.

For crash damage in general, our wrecked car guide goes further, and salvage title explains selling a branded car.