The salvage value of a car is defined as its resale value, or the amount of money one can get by disposing of a car at the end of its productive life.

You can quite easily find an online calculator that will tell you the value of your salvage car. Regardless, it is important to understand what goes into determining a salvage car’s value in the first place.

First, the car’s depreciation must be factored in.

## Depreciation Method

Let’s say you bought a car that has a 5-year life span at $10,000. If you use straight-line depreciation, the car will depreciate at a rate of** **$1,500 per year. Then, at the end of its useful life, it will be worth** **$2,500. That $2,500 is the salvage value of your car.

## Other Compounding Factors

Additional factors affect the true value of your salvage car. For example, if your car was totaled, the salvage value is likely to be lower. Totaled vehicles may have a salvage value based on the value of the scrap metal, but scrap metal prices have been going down drastically in recent years.

## Ways to Determine a Salvage Car’s Value

### Find Blue Book values

Start by finding the value of your car on Kelley Blue Book, which can be found online. Consider all options available and make sure to match the trim level to yours. Input accurate information to avoid future disappointments resulting in a lower value than anticipated.

### Use the NADA Guide

You can check the value of your salvage car on the National Automobile Dealers Association, or NADA guide. This will require that you provide the make, model, and year of your car.

### Compare Quotes

You can compare different quotes from different sites or car dealerships. You can also check with Edmunds.com for the retail and trade-in values of your car.

The numbers should be close together, if they are not exact. Go with the figure that is the most conservative for your calculations.

### Market Value

To get the market value, add the retail and trade-in value from one source and divide by two.

For example, if the retail value of your car is $6,000 and the trade-in value is $5,000, add $6,000 and $5,000 to get $11,000. Divide by 2 and your market value is $5,500.

## Getting the Salvage Value Calculation from Your Insurance Company

Different insurance companies will use different formulas to determine the salvage value of a vehicle. This will be affected by what happens to the vehicle afterwards, as well as the costs of disposing of it. These costs are compared to the costs of repairing the car.

The insurance company will also consider past auction results for the type of car. For example, if the car is a specialty car, the salvage value will be higher. On the other hand, if a major component the car needs is difficult to find, its value could decrease.

## Calculating the Salvage Value

To accurately calculate the salvage value of your car, multiply the market value you obtained above by the percentage given to you by your insurer. This is usually around 70% to 80%.

If your insurance company offers 80%, it means that you multiply 80% by the $5,500 obtained earlier. This will give you an estimate of a $4,400 salvage value.

Some insurance companies will allow you to negotiate the salvage value slightly. They will be more willing to do this if you can show why they should give you better value. You could argue that a number should be raised because of any upgrades or beneficial modifications you made on the car, for example.