How is Insurance Buy Back Value Calculated?
If you have been in a road accident and your insurance company states the total cost to repair your vehicle is higher than its overall value, they may declare it to be written off, or a ‘total loss’. It is worth understanding how this value is calculated by insurers as it doesn’t always mean your car or van is necessarily beyond repair.
Depending on the severity of the accident, your vehicle will either be towed to a storage facility, or you may be able to take it home. An insurance assessor will then come to view the vehicle, where they will:
- Work out the PAV (pre accident value) of your vehicle
- Calculate the costs to repair your vehicle
What is Insurance Buy Back?
If your car has been written off as a total loss by your insurer, you may be able to buy it back.
This means that your insurer will return your vehicle to you for a settlement figure rather than taking ownership of the vehicle and handing it over to a salvage firm. Commonly known as both ‘buy back’ and ‘salvage deduction’, you should make your insurer aware you would like to carry out this process as soon as possible to negotiate the best deal.
Calculating Buy Back Value
The buy back value of your vehicle is calculated with a number of factors in mind. You will be given a PAV by your insurer; generally the insurance buy back value is the PAV minus the salvage deduction. However, if you believe your vehicle is worth more than the PAV provided, it may be negotiable. This will also increase the salvage deduction.
For example, if you have a car with a PAV of £1000 and the salvage deduction is £300, your insurer will only work to the maximum repair cost of £700.
We would recommend using our insurance buy back calculator to get an idea of how to negotiate with your insurer as they may quote a lower figure.
Sometimes, your insurer may also offer you a CIL (cash in lieu payment). This is generally only reserved for when the repair cost of your written off vehicle is lower than its value. The CIL figure paid is the estimated repair cost, and if you choose this option the vehicle will not be written off and will not be given a category marker.
What is the value of Your Written Off Vehicle?
It’s important not to accept the first figure your insurer offers you when they write off your vehicle as a total loss.
Do your research and get a quote using our salvage calculator before negotiating. Insurers may quote a figure that is lower than what they can actually achieve, whereas our calculator will compare the best offers available to you. Your vehicle’s value as a total loss will depend on its category.
The Association of British Insurers (ABI) produced a salvage code to make it easier to understand the condition of a vehicle. Since 1st October 2017, the following categories have been used:
Category A – Scrap
This is the category given to vehicles not suitable to be repaired. No parts of it can be reused for salvage and the whole vehicle must be scrapped.
Category B – Break
This category is for vehicles that are not suitable to be repaired, but they may have parts that can be used elsewhere.
Category S – Structural
This category is given to vehicles that have damage to the structural frame, the insurer has chosen not to repair it. They can still be used for salvage.
Category N – Non-structural
Finally, category N is for vehicles that have non-structural damage and are repairable, but the insurer has chosen not to proceed with the repairs. They can still be used for salvage.
Total Loss Car Value Calculator
If you have been in an accident and have received a write off buy back quote from your insurance company, we would recommend using our salvage calculator to research your options and see what other quotes are available to you. Simply enter your registration and postcode for a free, instant quote.
Quite often, cars that have been written off by insurers as a total loss still have some use. In many cases, they can be repaired or sold as salvage, meaning the parts can be used to repair other vehicles.
Insurance Buy Back FAQs
Can I buy back my car from insurance?
If your insurer has deemed your car a write-off, whether for accident damage or significant mechanical issues, you can buy the car back from them if you wish to do so. If you wish to buy your car back from your insurers, then you should make them aware as soon as possible. Be aware that there may be more damage than first meets the eye and that a previously written off car can be incredibly difficult to sell on.
How does insurance buy back work?
In order to buy back an insurance write-off you will need to inform your insurers as soon as possible. It’s worth doing some research before you go in, as your insurers are likely to begin with a low valuation so there is certainly some room to negotiate or even escalate to a formal complaint if you feel it is worthy. The insurers cannot take ownership of your car until a settlement figure has been agreed and accepted.
What is a buy back option on car insurance?
Car insurance buy back is an option that is available to you if you believe you are able to make more money by selling your broken car privately, or even if you believe it is still repairable – just bear in mind that the category in which your car has been written-off into may limit what you’re able to do with the car. Insurers often go into buy back negotiations as low as they can get away with, so be prepared to haggle if necessary.
Where do insurance companies sell damaged cars?
If your car has been written off as either Category A or B, then your car will be sent straight to the crusher, however, if it is an S or N write-off, then it is likely to live on elsewhere. Insurance companies regularly sell broken vehicles to specialist remarketers, where it will likely become a lot at an upcoming salvage auction.
Can I get a refund on my insurance if I sell my car?
Selling a car is the most common reason that insurance policies are cancelled, and you are entitled to a refund if you are yet to complete your policy. You will be subject to an administration fee and the amount of a refund you receive will depend entirely on how long there is left on the policy. If you are cancelling your policy to replace it with a new one with your new car, this refund will often be taken into account as you alter the details of your policy to reflect your new set of wheels.
How much does it cost to buy back a car from insurance?
As with any questions of this nature, it is impossible to provide even a ballpark figure when it comes to predicting how much a car is going to be worth when buying back from your insurers. The final figure will boil down to what your car’s Pre-Accident Value (PAV) was, minus any repairs that would be needed to get the car on the road. Do some research before you begin your buy-back plans, including the value of working cars of a similar age and mileage to yours, as well as getting quotes from garages as to the cost of repairing any damages that would need rectifying.