A salvage vehicle is a vehicle that has incurred such severe damage that the cost of repairs exceeds a percentage of the vehicle's cost designated by the insurance company as its salvage value. This percentage is subjective, depending on the salvage value standards of the insurance company and the state in which the salvage title is issued, but you can use a few simple calculations to determine the approximate worth of the damaged vehicle. Expect the salvage value to be between 15% to 20% of the vehicle's retail value at the time of loss.

Maximum Value

Look up the salvage vehicle's clean retail price through the guides website of National Automobile Dealers Association (NADA). The clean retail price is also called the wholesale price or trade-in value by some insurance companies. Calculate between 50% and 80% of this clean retail price to determine the maximum value of the salvage vehicle. Each insurance company may use a different percentage to determine the maximum value, but this is a commonly used range. Vehicles less than 10 years old may be depreciated by a smaller percentage, but this is also subjective and varies depending on the insurance company. Subtract the vehicle's deductible from the maximum value. This result is not yet the salvage value since the insurance company will account for other factors such as prior damage and unrepaired damage in calculating the vehicle's current worth.

Depreciation

Distress to the vehicle from an accident, a theft or a flood will further depreciate its salvage value. Damage to one or more of the car's component parts such as bumpers, fenders, transmission, engine, hood, doors, frame, tailgate, or body contribute to a lower value. This can also include damage to the salvage vehicle's interior, including the seats and upholstery. Each insurance company calculates the damage differently depending on the laws and regulations applicable in each state. A salvage vehicle in possession of a title from a total-theft strip insurance claim is devalued by a lesser percentage than a salvage vehicle that possesses a physical damage, impact or fire loss insurance claim. Considerations are also made for the make and model of the vehicle when determining its salvage value.

Source:

NADA Guides: Vehicle Pricing and Information

The Auto Appraiser: Salvage Title

AR-Auto: Salvage Vehicle