Q: My car was involved in a collision. I can still drive it. The insurance company is calling it a total loss. Why?
A: A car can be a total loss in one of two ways. The first way is simple: if the car is completely demolished. You know, the type where the car burns up completely or you cannot tell the front from the back.
The second way is more complicated: the cost to repair the car is 75 to 80% or more of the value of the vehicle. So, if you are involved in a collision and the repair costs are $7,500 and your car is worth $10,000, then the car is a total loss. For more expensive cars, this is clearly harder as it requires substantially more damage. But, if your car is worth $1,000, it only takes $750 in repairs to consider your vehicle a total loss. This could be replacing a bumper or a door.
Remember, you can have a total loss with the car not looking like it is completely damaged.
One final note: if your car is a total loss, it will have a salvaged title. You do not want a car with a salvaged title. You may not be able to insure it and you sure will not be able to sell it.