What happens if my quote for repairs is higher than value of car?

My car was in an accident and the quote for accident repair is higher than what I paid for the car (used). I'm not at fault. What are my options? The quote for repairs is $7,000 and I only paid $4500 for the car when I bought it. Will the insurance cover it? They are still investigating and I just want to know my options before I decide to have it fixed or not.

There are several things to think about here. First, it sounds like your vehicle is likely totaled. California uses what's called a total loss formula: a vehicle is declared a total loss if the cost of repairs (your $7,000) plus the car's scrap or salvage value is greater than or equal to its actual cash value (ACV) before the accident. Since vehicles depreciate, your car's ACV is likely lower than the $4,500 you paid for it, which makes it very likely your insurer (or the at-fault driver's insurer) will total it rather than pay for repairs. You can use our total loss calculator to get a clearer picture of where your car stands.

Since you're not at fault, my recommendation is to file the claim with the at-fault driver's insurance company rather than your own; you shouldn't have to pay a deductible, and you should be paid the ACV of your vehicle at the time of the accident, not what you originally paid for it. While the investigation is ongoing, I'd hold off on authorizing any repairs; if the vehicle is declared a total loss, you won't be reimbursed for repair costs anyway, and it's simpler to settle the claim before spending any money.

Once a decision is made, here are your main options:

• Accept the payout and let the insurer take the car. They'll pay you the car's ACV, minus your deductible if you're filing on your own policy, and take possession to sell at salvage auction. This is the most common and straightforward route.
• Retain the vehicle yourself. You can ask to keep the car in exchange for a reduced payout (the insurer subtracts its salvage value). You'll be issued a salvage title and will need to get it inspected and retitled before you can legally drive or insure it again.
• Negotiate the payout. Before accepting any offer, pull your own comparables using Kelley Blue Book, Edmunds, or NADA Guides for similar makes, models, years, and mileage in your area. Insurers don't always offer top dollar upfront, and documentation gives you room to push back if their number feels low.

If the investigation stalls and the at-fault driver's insurer is slow to resolve things, you can also open a claim through your own insurer (if you carry collision coverage) and let your insurer recover costs from the at-fault party later. This can get your payout moving faster while fault is still being sorted out.

Check out our claims calculator and guide to filing claims to learn more about the process, and don't hesitate to ask if you have more questions.