How to Find the Salvage Value of a Car
"Salvage value" refers to the value of an asset after its useful life. It is commonly used to find the depreciation value or expense. With cars, this process can sometimes be challenging, as cars have varying degrees of useful lives depending on maintenance. The best course of action is to assess the usefulness of the car based on the market or scrap value if the car has been in an accident. In either case, the salvage value is based on the value you can reasonably expect for a trade in the marketplace.
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Instructions
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Determine whether the car has been in an accident. If it has, you will need do your own estimate of the damage. A car with front-end damage will have a lower salvage value than a car with rear-impact damage.
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Contact several salvage and/or wrecking yards. You need at least three quotes to arrive at an average. Use this average as the fair market value of the salvaged car if the car was in an accident (which is usually the case for insurance claims).
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Determine the current market value of the car. One of the most popular car valuation publications is the Kelley Blue Book. You can also look at the average listing price in newspaper classified ads.
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Deduct 15 to 20 percent of the market value of the car at the time of loss. For instance, if the retail value of the car is $10,000, the salvage value is $10,000 - ($10,000 x .15 up to .20) or $8,500 down to $8,000. This is considered a fair and reasonable estimate.
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- Photo Credit wrecked car image by hazel proudlove from Fotolia.com
