Car Totaled but Still Drivable? Know Your Rights and Options

It feels bad and even unfair when the insurance company declares your car as totaled, yet it is still drivable. Many people think a totaled car must be crushed metal or completely unusable. But what happens when your car is totaled but still drivable? I have prepared this guide for you that covers:

• What happens when your car is totaled but still drivable?
• Why do insurance companies make this decision
• What options do you have next?
• and more

Table of contents

• What Does “Totaled” Really Mean?
• How Can a Totaled Car Still Be Drivable?
• Why Insurance Companies Total Drivable Cars
• Your Options When Your Car Is Totaled but Still Drivable
• What Happens If You Still Owe Money on the Car?
• When Keeping the Car Makes Sense (And When It Doesn’t)
• Conclusion
• FAQs

What Does “Totaled” Really Mean?

The first thing to know is how to tell if a car is totaled. In short, the car becomes totaled when the repair costs become more than its actual cost value. So, the ultimate decision is about money, not the drivability.

Example of a totaled car:

• Your car’s value before the accident: $8,000
• Repair estimate: $6,500
• Your state’s total loss threshold: 75%

Since $6,500 is over 75% of $8,000, the insurance company totals the car even if it still drives perfectly.

How Can a Totaled Car Still Be Drivable?

When your car is totaled, sometimes it can still run on the road. A car can still be drivable if the damage is:

• Cosmetic (bumper, fender, doors)
• Nonstructural
• Not affecting steering, brakes, or engine
• A drivable car usually:
• Starts and runs
• Steers normally
• Brakes safely
• Can be legally driven (for now)

The insurance decision doesn’t measure how it feels to drive. Your insurance company will declare your car totaled based on repair cost vs. value.

Why Insurance Companies Total Drivable Cars

The primary reason behind declaring a car totaled is to limit the financial risks. Here are the reasons:

• Labor costs are high.
• Hidden damage is common.
• Rental car expenses add up.
• New safety systems are expensive.

Due to the above reasons, paying the full car value is much cheaper than repairing for insurance companies. That is why they declared your car totaled, even if it is drivable. However, you can trade in a damaged car at a good price if you find an interested buyer.

What Happens After Your Car Is Declared Totaled?

Once your car is officially totaled, several things happen quickly:

• The insurance company calculates your Actual Cash Value (ACV)
• Your loan or lease (if any) is addressed
• You are given settlement options
• The car title status changes (often to salvage)
• At this stage, your decision matters a lot

Your Options When Your Car Is Totaled but Still Drivable

When the insurance company declares your drivable car totaled, you have the following four options:

Option 1: Accept the Insurance Payout and Give Up the Car

This is the simplest option. You receive the car’s ACV (minus deductible), the insurance company keeps the car, and you simply walk away.

Accepting the payout is best if:

• Repairs are expensive.
• You don’t want long-term risk.
• You plan to replace the car soon.

Option 2: Keep the Car and Take a Reduced Payout

This option lets you keep driving the car and take the small payout from the insurance company.

• You get a smaller payout.
• The car gets a salvage title.
• And you are responsible for repairs.

Important: A salvage title reduces resale value and may limit insurance options.

Option 3: Repair the Car and Apply for a Rebuilt Title

Another option is to repair the car yourself and keep it driving. If you repair the car properly, you may apply for a rebuilt title. The car becomes legal to drive long-term; you may need to get car inspections before driving it on the road.

Pros of repairing a drivable totaled car yourself:

• Lower cost than buying a new car
• You keep a familiar vehicle.

Cons of repairing a drivable totaled car yourself:

• Lower resale value
• More paperwork
• Limited full-coverage insurance

Option 4: Sell the Totaled but Drivable Car

Many people choose to sell the car instead of fixing it. You can sell to:

• Private buyers
• Salvage yards
• Junk car buyers who accept drivable vehicles

Selling the drivable totaled car is the best option if:

• You don’t want a repair hassle.
• You want fast cash.
• The car still runs, but it is not worth fixing.
• The hail or weather damage isn’t worth repairing.
• There is cosmetic damage, but the car is drivable and can still have good resale value.

Transporting and Selling a Totaled Car and the Towing Company

If you plan to sell a salvage car, you may need a towing service to move it. However, not all towing jobs go as planned. Improper loading, careless handling, or using the wrong equipment can cause additional damage to your vehicle. In that case, you may have legal options to recover costs, including the possibility of taking action against a towing company for damaging your car.

What Happens If You Still Owe Money on the Car?

When your car is totaled but still drivable, things change if there is a pending loan. If you have a loan or lease:

• Insurance pays the ACV.
• The lender is paid first.
• You get the remaining balance (if any is left).

If the ACV amount is less than the loan balance, you owe the difference unless you have gap insurance.

Can You Insure a Totaled but Drivable Car?

Yes, you can insure the totaled drivable car, but with some limits. Here are two scenarios:

1. The car will get a salvage title. In this case, the liability insurance is usually allowed, and full coverage is often denied.
2. Second is a rebuilt title, which may offer more insurance options but still fewer than a clean title.

Always check with your insurer before deciding.

Is It Safe to Drive a Totaled Car?

It depends on the type of damage to your car. A totaled car’s safety depends on its junker type and damage level, as some types may have damage too severe for the road.

You should not drive the car if:

• Frame damage exists.
• Airbags failed and were not replaced.
• Steering or braking feels off.

The best way is to always get an independent inspection before continuing to drive.

Common Mistakes to Avoid:

• Accepting the first settlement without reviewing the ACV
• Forgetting to remove personal items
• Driving long-term without inspection
• Ignoring title and insurance rules
• Over-repairing a low-value car

When Keeping the Car Makes Sense (And When It Doesn’t)

If your car is totaled but still drivable, keeping the car makes sense. If:

• Damage is cosmetic.
• You plan to keep it long-term.
• Repair costs are low.

Whereas letting it go makes sense. If:

• Structural damage exists.
• Resale value matters to you.
• Insurance options are limited.

Conclusion

So, what happens when your car is totaled but still drivable? In short, you can accept the insurance payout and leave the car, keep the car with less payout, repair the car yourself and rebuild the title, or sell the totaled car at a good price. Stay informed and make careful choices to navigate the complexities of a totaled but drivable car.