Insurance offer for totaled car - what would you do?

[ArtOfFIRE]

Hi all,
I've been reading the forums for a long time and am coming out of lurk mode for your help with some car advice!

About 3 weeks ago I was rear-ended in my 2003 Subaru Legacy. It has 118,000 miles and was in good mechanical condition and ok cosmetic condition (some minor dents/scrapes/rust spots) prior to the accident. The guy was looking at his phone while driving and hit me pretty hard on the rear passenger side (luckily, neither of us were injured). The accident dented my bumper and caused it to partially detach, dented the quarter panel, and bent the car enough that the trunk and gas lid will no longer close. It's still drivable, and mechanically feels normal to me when driving. I'm not super comfortable driving it right now though since the bumper squeaks ominously every time I hit a bump, and with the trunk and gas cap not secure I don't want to park it downtown for work.

The guy's insurance company gave me an estimate of $2,273 for the visible damage and said that it was likely there was more internal frame damage, so they have decided to total the car. They are offering $4,147 if they take the car, and $3,493 if I keep the car (so a salvage value of about $650).

Other pertinent info:
-I do need a car, although it's not an emergency. I could get by for a few more weeks without one but not months.
-My car has some upcoming maintenance requirements. Mostly, it needs a new catalytic converter and oxygen sensors (quoted at $1300) before I renew my registration next March so it will pass emissions testing. It also needs a new battery. There are some less urgent items on the list like new shocks/struts and repairing the weatherstripping.

I'm not that knowledgeable about cars, the last time I bought a car was 13 years ago, and I've never dealt with this situation. I'm hoping to get the best value out of it and hopefully not get screwed in the process. What would you do?

1. Sell the car to the insurance company. Buy a new (used) car relatively quickly.
2. Keep the car with a salvage title. Figure out how to cheaply secure the bumper, trunk, and gas lid so I can keep driving it. Shop around for a used car before March. Sell my salvaged car to the dealer or wherever I can get a good price.
3. Keep the car with a salvage title. Have it repaired just enough to get by. Keep driving it indefinitely.

I'm leaning toward option 2, because this would give me some time to shop around for a good deal and hopefully I could still sell my car and recoup some of the $650 at the end. Option 1 would leave me needing to find a car quickly and Option 3 seems like it could become a money pit.

Also, would you try to negotiate the insurance offer? KBB value for my car is averaging $2500 for private party. Based on this, their offer came in higher than I was expecting. I'm finding similar cars for sale in my area for $3-4k. Is there other information I could use to negotiate this higher or are they giving me a good price?

Thanks fellow Mustachians!

[frugaliknowit]

I might have the frame evaluated.  Hopefully this would be free and quick enough for the insurance company to hold their offer.

[RWD]

I would take the $4,147 and shop for a replacement vehicle. Rent a car in the meantime, if necessary.

[bacchi]

Also, would you try to negotiate the insurance offer? KBB value for my car is averaging $2500 for private party. Based on this, their offer came in higher than I was expecting. I'm finding similar cars for sale in my area for $3-4k. Is there other information I could use to negotiate this higher or are they giving me a good price?

Thanks fellow Mustachians!

Yes. It's a major inconvenience to look for a new car and it's not your fault you were put into this situation. Ask for 2 (additional) weeks of a rental car.

[lbmustache]

Also, would you try to negotiate the insurance offer? KBB value for my car is averaging $2500 for private party. Based on this, their offer came in higher than I was expecting. I'm finding similar cars for sale in my area for $3-4k. Is there other information I could use to negotiate this higher or are they giving me a good price?

Thanks fellow Mustachians!

I think the offer they gave you is great, and I would take that and run! Unless you find a consistent number of cars selling for a higher price (i.e. $5k or whatever) to present as evidence to the insurance company, it's unlikely they will budge much for the numbers. If you can prove you did recent maintenance (like replacing the tires, etc.) with receipts, sometimes they will add that on.

[robartsd]

I might have the frame evaluated.  Hopefully this would be free and quick enough for the insurance company to hold their offer.

Insurance offer seems pretty good. Since their offer is based on the car being totaled their numbers won't change regardless of what additional damage you find. The frame evaluation would really only apply to option 3.

Yes. It's a major inconvenience to look for a new car and it's not your fault you were put into this situation. Ask for 2 (additional) weeks of a rental car.

This sounds reasonable. Or if you're not too uncomfortable with option 2, you could try a hybrid of options 1 and 2 - drive the car while you shop for a replacement then settle with the insurance after finding the replacement in the next several weeks. I'm not sure how long they would let you sit on the offer, but I see little reason for the insurance company to try to reduce the offer over time.

[Goinganon]

Check your state’s laws to see if you are allowed to drive a car with a salvage title. Someone side-swiped mmy nearly-15 year old car that was otherwise in perfect condition and had less than 100k miles. The insurance company wanted to give the car a salvage title based on the value of the car. I was okay with it until I found out that it’s illegal to drive a car with a salvage title in my state. It didn’t matter that it would have been salvaged due to cosmetic damage. It’s nearly impossible to clear the salvage title once it’s there and it actually is an expensive process.

[Michael in ABQ]

I had my old Ford Escort totaled when someone rear-ended me and messed up the bumper and rear quarter panel. I ended up keeping the car for another year but I think the KBB was maybe $1,500 and they gave me about $2,500 even though I kept the vehicle. I was rear-ended again a year later and they smashed in the trunk and it was pretty much undrivable at that point. Even with a salvage title the second insurance company still gave me something like $2,000. I was only able to get $100 from a junk yard though since it was a 17-year old vehicle. Bottom line is insurance companies tend to be pretty generous with older vehicles in my experience.

If it's still running in a couple of months, even with some cosmetic damage you should easily be able to get more than $650 for it. I say take the money, keep the vehicle and use the time to shop around a bit. Let the next buyer know it probably needs some work to pass emissions but a running vehicle in almost any condition should go for more than $650.

[G-dog]

Before you keep the car, find out if it is safe to drive. My car was just totaled in a relatively low speed accident - frame was bent / buckled on the passenger side. I’m not messing with that.

Make sure their offer covers all the features and options on your car - go over it with them on the phone:
Remote start
Spoiler
Trailer hitch
Roof rack
Alloy wheels
Cruise
Traction control
FWD, AWD, 4WD  likely have different values
Etc. all increase the value on your car

This should be apparent via the VIN- but in talking with the insurance person on the phone, it was clear that not all these things are readily apparent (eg, May say “sport package” and not say spoiler)
.
I would take the higher offer to surrender the car and find another.

[ChpBstrd]

1) Take the cash payout.
2) Rent a car or use Uber. Think about whether you have any friends or family who have an extra car they'd rent you.
3) Take a day or two off work.
4) Search Craigslist like a fiend, using a rental to look around. Avoid any dealer with a paved lot. If the lot is paved, the markup is several thousand dollars. And no, you can't negotiate it down by much if you decline the "balloon payment option" because that's how they make their money.
5) See other posts on this forum about "how to buy a used car".

[MustacheAnxiety]

Do not simply take what the insurer is offering to total the car.  Do some work to find out how much it would cost you to buy a comparable car from a dealer.  Find some for sale and e-mail dealers to get out the door prices.  The insurance company is on the hook to give you all the money you would spend to get a replacement and that includes tax, title, and license.  Send them your evidence along with a long list of why your vehicle is actually better than the comparable (options, miles, service records, etc.) In my experience the insurance company offer looks good in comparison to what you would get as a private party seller but they tend to short change you for what they actually offer.

Once you get everything you are entitled to then I would sell the car to the insurer and replace it.  It sounds like the car is not drivable right now and having the bumper and trunk "secured" seems like it would require more than a few bungee cords based on your damage. 

Hopefully with some negotiation with the insurer and some of the other tips on how to buy a car you can get a a small upgrade in vehicle out of this immense hassle.

Get some car knowledge.  At least enough to be able to pass your states emission tests without $1300 outlays.  Some places that just use a code reader, I have heard you can simply borrow the OBD2 from autozone and reset your codes before taking it for testing.  Some components are buried deep but if you know what needs replacing mostly those are jobs that can be done on your own.

[ShoulderThingThatGoesUp]

Resetting your codes so it will fraudulently pass an emissions test is pretty unethical in my book. People breathe that stuff.

[Syonyk]

Resetting your codes so it will fraudulently pass an emissions test is pretty unethical in my book. People breathe that stuff.

It won't pass if it's particularly bad, because the emissions testers look for various "ready" indicators that indicate the system has driven enough miles to have an idea as what's going on.

It being a Subaru, it's almost certainly a P0420 code, which is a catalyst efficiency warning, but it's usually a slightly lazy rear O2 sensor, and often doesn't trigger except in certain conditions.  I had an 02 Outback that would reliably trip that code - only on highway trips over about 400 miles.  It was perfectly fine in all other driving conditions.

To the OP, have a mechanic or a mechanically inclined friend look over it and see if they'd keep driving it.  Personally, I'd take the payout, keep the car, pound the rear back into shape, and keep driving unless the unibody was really, really beat up.  It's the rear of the car, and you don't normally keep people in the hatch, right?

[ChpBstrd]

Kelly Blue Book says your car is worth about $1950 in the private market.*

The insurance company is offering $4147.

TAKE

THE

MONEY

AND

RUN!

*Source: https://www.kbb.com/subaru/legacy/2002/l-sedan-4d/?vehicleid=4757&intent=buy-used&category=sedan&mileage=153091&pricetype=private-party&condition=good I assumed Chicago for the location due to the rust!

[tomorrowsomewherenew]

Like the previous poster said, this looks to be an amount substantially more than your car is actually worth. Take the money and get yourself a decent used car.

[ArtOfFIRE]

Thanks everyone for your feedback. You definitely gave me a lot to think about!

Check your state’s laws to see if you are allowed to drive a car with a salvage title.

Thanks for mentioning this, it's something I never would have thought of. Fortunately I found out that my state does allow you to drive with a salvage title. I would have to re-register it with the new title, but I think this will be a minor cost/inconvenience.

If it's still running in a couple of months, even with some cosmetic damage you should easily be able to get more than $650 for it. I say take the money, keep the vehicle and use the time to shop around a bit. Let the next buyer know it probably needs some work to pass emissions but a running vehicle in almost any condition should go for more than $650.

I decided to take it over to CarMax today just to see what they would give me for it if I kept it while shopping around. They quoted me $700 (and I'm not required to buy from them in order to sell it). So it's good to know that I can at least break even on the insurance company's offer with this option.

Make sure their offer covers all the features and options on your car

I did question the offer just to see if they would budge at all - never hurts to ask. They provided the report showing all the equipment and the comps they were using, and everything looks in line with the comps I researched. Seems like a fair price.

I definitely thought about just taking the higher offer and running as many of you suggested. I've been wavering back and forth the last couple days. But with the quote from CarMax, and also the insurance company refusing to give me a rental while I search (wtf) I think I am going to keep my car and take the lower amount. Then I can take my time finding a good deal on the car I will hopefully drive another 15 years.

5) See other posts on this forum about "how to buy a used car".

This is my next step for sure!

[robartsd]

Thanks everyone for your feedback. You definitely gave me a lot to think about!

Check your state’s laws to see if you are allowed to drive a car with a salvage title.

Thanks for mentioning this, it's something I never would have thought of. Fortunately I found out that my state does allow you to drive with a salvage title. I would have to re-register it with the new title, but I think this will be a minor cost/inconvenience.

Yes, I think most states require an extra safety inspection upon re-registering a car that had been totaled; but otherwise you're allowed to drive a salvage car. I've never heard of a state that disallows salvaged cars altogether. The safety inspection probably includes making sure all the required lights work, there aren't major leaks of the fluids, the brakes function correctly, and the parts of the car aren't falling off.

[austin944]

After my car was hit but still driveable, the other guy's insurance company offered some money and a salvage title and allowed me to keep the car.  I waited out the insurance company a few weeks and they eventually dropped the salvage title requirement and sent me a check for the same amount, with no negotiation on my part.  So I had a non-salvage titled car and some money to fix it, but the offer was not nearly as good as yours.