Here’s why a fender bender can total your old car

Accidents can wreak havoc on your budget—even with insurance.

Rental Car Accident Side
Flickr | Jeff Milner

If you have a fender bender, you might assume your insurance company will pay to have it repaired. But that assumption is often wrong these days.

As one man learned, with an older car your insurer may just total it out, paying you peanuts.

Car Owner Left Heartbroken

Jerry Schneiders loves his low mileage, 2002 Chevy Impala. So he was heartbroken when another driver sideswiped it, denting the entire driver’s side.

“Yes it’s damaged,” he said. “The left front fender, and the doors. The doors will open and close, though”

He says the engine is fine. “It’s just a bad fender bender. In my opinion, it’s still driveable,” Schneiders said.

Not so, according to his insurance company, Progressive. They told him his car is so old, the cost to repair it is too close to its value.

“They’re saying my vehicle is only worth about $3,000,” he said, even though it has just 92,000 miles on the odometer after all these years.

Common Dilemma With Older Cars

This is actually common if you own an old car that’s not worth much, no matter who insures your vehicle.

According to Insure.com, if the cost to repair it is more than 60 percent of its Kelley Blue Book value, most companies will now total it out, and not pay for repairs. Some will total it if the cost of repairs is just 51 percent of it’s value, the report says.

Schneiders has paperwork from Progressive, showing that they are offering him book value, $2,900.

But he says that won’t buy a decent replacement. He says a similar well-kept, low mileage used car will cost him $8,000 or more.

“I feel that this big company is pushing me in a direction that I don’t necessarily want to go,” he said. “I feel the car can be repaired.”

How You Can Fight Back

According to 2006 data from Progressive, 20 percent of all crashes now result in totaled cars, because of the rising cost of repairs.

Realizing the hardship that can present drivers, it now offers a program called “Total Loss Concierge” to help people like Schneiders find a similar car without draining their bank account. It ties in with local dealers to find quality cars in your price range.

There’s some other options if your car is totaled, according to Insure.com. You can get the car back with a salvage title and get it repaired on your own.

However, they will deduct what they can get for it a salvage auction, which in Schneider’s case would be around $1,000.

So in that case, he would get a check for about $2,000, and get his damaged car back, but re-titled as a “salvage” vehicle, meaning it had been totaled out.

Schneiders is not happy with that either.

“By putting that salvage or total loss on that vehicle, I can’t really do much with it,” he said.

A salvage title can make your car very expensive to insure, and impossible to sell, except to a junkyard.

The last option: hire an independent appraiser to assess your car’s value, and what he thinks it could be repaired for, then present this report to your insurance company through their appeals process.

Progressive, meanwhile, tells us they will re-investigate Schneiders’ claim.

But it’s important to know that on any car worth less than $5,000, a fender bender can make it a total loss.

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