Motor Category Motor: car insurance and finance

How to Calculate Salvage Value of an Automobile

Automobile salvage value is not an exact science. Insurance companies use a variety of factors in determining the auto salvage value, including a car's make/model, pre-accident condition and extent of damage.

Having an idea of the salvage car value after you've been in an accident, however, can help determine your next step. That next step may include donating the car to charity, repairing the car or parting-out an automobile.

Research the blue book value for the car's make and model. The blue book value is its retail value through a dealer and assumes the car's in excellent condition.

Look up the automobile's wholesale price through the automobile blue book or NADA guide value websites. The wholesale price is also known as its trade-in value.

Compute the average price between the retail and the wholesale price to determine the car's current market value.

Multiply the car's current market value by the percentage used by your insurance company. Insurance companies use a percentage of the automobile's market value, for example 75 percent of the market value equals the auto salvage value. The percentage varies from company to company. Contact your insurance company directly to determine the percentage it uses.


Websites such as Kelley Blue Book, Edmunds and NADA Guides can help you determine both the retail and wholesale value of the car. Looking up used car sales ads locally or online also can help determine the car's current value.


Because accurately determining auto salvage value is so subjective, you truly need outside input. Talking with you insurance company directly following an accident provides the most accurate salvage car value. Insurance companies don't have a universal formula to compute automobile salvage value. The percentage of wholesale and retail automobile cost varies from company to company. The damage to a car impacts its salvage value greatly.