You’ve just been in a car accident, and while your vehicle still runs, the insurance company says it’s totaled. Now what? This situation affects many New Mexico drivers, especially given that modern vehicles are declared total losses about 20% of the time after accidents – five times more often than in 1980. The complex electronics in newer cars often make repairs cost-prohibitive for insurance companies. That means it’s much easier for the cost of repairs to exceed the “total” value of the car. Hence, “totaled.”
When a Car Is “Totaled” in New Mexico
Insurance companies declare a vehicle totaled when repair costs exceed a certain percentage of the car’s actual cash value. In New Mexico, a car can be considered legally totaled even if you can still drive it.
A drivable car typically:
- Has functional tires and wheels
- Maintains working steering
- Starts and operates safely
- Shows no serious structural damage
The question isn’t “does it drive,” but rather, “can it be fixed for a reasonable amount?” If the answer is no, the insurance company is likely to declare the vehicle a total loss.
What the Insurance Company Considers
After an accident, your insurance company will evaluate your vehicle’s:
- Pre-accident market value
- Current condition
- Cost of repairs
- Salvage value
The insurance company then calculates your car’s total loss value – the amount they’ll pay you for the vehicle. This amount equals the pre-accident value minus your deductible.
Should You Keep a Totaled but Drivable Car?
Before deciding to keep your totaled vehicle, consider these factors:
Reduced Insurance Payout
When keeping a totaled car, your insurance company deducts the vehicle’s salvage value from your settlement. You’ll receive less money than if you let the insurance company take the car.
Outstanding Loan Obligations
If you still owe money on your car loan, the insurance payout might not cover the full amount. You’ll need to pay any remaining balance yourself.
Salvage Title Requirements
New Mexico law requires totaled vehicles to receive a salvage title. This means:
- You cannot legally drive the car until it’s repaired
- The vehicle must pass a safety inspection
- You’ll need to apply for a rebuilt title
- Insurance may be harder to obtain and more expensive
Repair Costs
Remember why the insurance company totaled your car – the repairs cost too much compared to the car’s value. You’ll pay these repair costs out-of-pocket if you keep the vehicle.
Your Options for a Totaled but Drivable Car
1. Accept the Total Loss Settlement
The simplest option: take the insurance company’s payment and use it toward a replacement vehicle. Our car accident lawyers can help ensure you receive fair compensation.
2. Keep and Repair the Vehicle
If you choose this path:
- Document all repairs
- Use licensed mechanics
- Keep all receipts
- Follow New Mexico MVD requirements for rebuilt titles
3. Sell for Parts or to a Salvage Buyer
Some companies in New Mexico specialize in buying totaled vehicles. This option might yield more money than the insurance company’s salvage value deduction.
4. Donate the Vehicle
Donating your totaled car can provide a tax deduction while helping a charitable cause. Make sure to follow IRS guidelines for vehicle donations.
Legal Help After Your Car Accident
A totaled vehicle often indicates a serious accident. Beyond vehicle damage, you might face:
- Medical bills
- Lost wages
- Pain and suffering
- Long-term injuries
Our personal injury lawyers at Roadrunner Law Firm understand New Mexico accident laws and insurance company tactics. We’ve helped countless accident victims recover fair compensation for both vehicle damage and personal injuries.
Get Your Free Consultation Today
Don’t let insurance companies undervalue your claim. Our experienced attorneys will protect your rights and fight for maximum compensation. Contact Roadrunner Law Firm today at 505-444-4321 for your free consultation.
Whether your car is totaled or you’ve suffered injuries, we’re here to help you through the entire process. Visit our contact page to schedule your free case evaluation.
