Salvage Value Fixed amount or Percentage of Total Value?

Salvage Value Fixed amount or Percentage of Total Value?

Author
Discussion

Nemo Sum

Original Poster:

163 posts

137 months

Wednesday 8th March 2017
quotequote all
As the title states really, could those more knowledgeable than myself, tell me if the salvage value of a written of a car is calculated as a fixed amount or is it normally as a percentage of the total value?

If its a percentage, is it normal for this percentage to increase with subsequent insurance offers?

I.E. Offer 1
Total Offer: £5000, salvage Valuation £1000, Salvage percentage 20%

Offer 2
Total Offer: £5500, salvage valuation £1225, Salvage percentage 22% roughly

Thank you

kiethton

13,922 posts

181 months

Wednesday 8th March 2017
quotequote all
Don't know the workings of each insurance company but my recent experiences:

My Honda CBR125R motorbike buy-back value in November 2016 was 25% of the pre-accident value (£2,000 - £500 buy-back) (2013, "63", 15k miles, prior Cat-D plus the new Cat-C) - ended up selling it on e-bay damaged and got £750!

My BMW 540i buy-back value last week was 10% of the pre-accident value (£5,500 - £550 buy-back), when the offer got upped from £5k to £5.5k the salvage cost also went up by £50. (2003, "52", 133k miles, Unrecorded prior)

I've bought back in both cases smile

TooMany2cvs

29,008 posts

127 months

Wednesday 8th March 2017
quotequote all
Nemo Sum said:
As the title states really, could those more knowledgeable than myself, tell me if the salvage value of a written of a car is calculated as a fixed amount or is it normally as a percentage of the total value?

If its a percentage, is it normal for this percentage to increase with subsequent insurance offers?

I.E. Offer 1
Total Offer: £5000, salvage Valuation £1000, Salvage percentage 20%

Offer 2
Total Offer: £5500, salvage valuation £1225, Salvage percentage 22% roughly
Offer 1 - you keep car and receive £4,000
Offer 2 - you keep car and receive £4,275

Whatever you choose to do, you're ahead with offer 2, right?

The salvage value is roughly based on what they think it'll fetch at copart or wherever. Some cars, that's higher than others.

imagineifyeswill

1,226 posts

167 months

Wednesday 8th March 2017
quotequote all
The salvage value is normally a percentage of the value of the car but depends on age, 1-5 years may be 20%, 5-10 years 15% over 10 12.5% or some such figures. The last vehicle I retained salvage was a 10 year old Freelander and NFU,s figure was 9%.

Nemo Sum

Original Poster:

163 posts

137 months

Thursday 9th March 2017
quotequote all
TooMany2cvs said:
Offer 1 - you keep car and receive £4,000
Offer 2 - you keep car and receive £4,275

Whatever you choose to do, you're ahead with offer 2, right?

The salvage value is roughly based on what they think it'll fetch at copart or wherever. Some cars, that's higher than others.
In the example yes, however I'm trying to work out if its normal to offer an increased valuation and be told that the salvage value is now also more as a percentage of the whole, surely it remains the same? It comes across as underhanded to me, that's all.

If its based on what they think it'll fetch then the salvage value surely should remains at a set number, with the the total value being of the car, being irrelevant.

Nemo Sum

Original Poster:

163 posts

137 months

Thursday 9th March 2017
quotequote all
kiethton said:
Don't know the workings of each insurance company but my recent experiences:

My Honda CBR125R motorbike buy-back value in November 2016 was 25% of the pre-accident value (£2,000 - £500 buy-back) (2013, "63", 15k miles, prior Cat-D plus the new Cat-C) - ended up selling it on e-bay damaged and got £750!

My BMW 540i buy-back value last week was 10% of the pre-accident value (£5,500 - £550 buy-back), when the offer got upped from £5k to £5.5k the salvage cost also went up by £50. (2003, "52", 133k miles, Unrecorded prior)

I've bought back in both cases smile
Thanks that makes sense. %10 increase in value equal to %10 increase in salvage value.

Nemo Sum

Original Poster:

163 posts

137 months

Thursday 9th March 2017
quotequote all
imagineifyeswill said:
The salvage value is normally a percentage of the value of the car but depends on age, 1-5 years may be 20%, 5-10 years 15% over 10 12.5% or some such figures. The last vehicle I retained salvage was a 10 year old Freelander and NFU,s figure was 9%.
Thank you.

boyse7en

6,772 posts

166 months

Thursday 9th March 2017
quotequote all
I didn't realise there was a formaula for buy back value. When my Saab got written off a couple of years ago the write off value was £1450 and I bought it back for £425 (only cost me £150 to fix it, so I was quite happy) so it looks like there is a minimum scrap value which overrides the percentage value calculation

eltax91

9,900 posts

207 months

Thursday 9th March 2017
quotequote all
In all the cases I've experienced, they use a percentage of the value. As has been said that varies, I have a car on an agreed value classic policy and the salvage value is fixed at 25% of the agreed value.

That % should not change between offers though! If they give you a figure of 10% at offer one, it's a bit underhand to then all of a sudden makes it 12% because you've negotiated up on your offer. It's should be 10% if the new offer

brrapp

3,701 posts

163 months

Thursday 9th March 2017
quotequote all
I always thought the salvage value was value of car minus the cost of repairs X around 50%, so in the OP, £5000 for the car, minus £3000 for repairs =£2000, times 50% = £1000
It wouldn't make sense not to take the cost of repairs into account, a salvage car which just needs a new bumper is going to be worth a lot more than one which has every panel damaged.

mcflurry

9,103 posts

254 months

Thursday 9th March 2017
quotequote all
If the value of a written off car goes up, it makes sense for the scrap value to also rise IMHO.

This is because if a buyer of the scrap could do up and sell the done up car for more money, they would spend more upfront for the shell.

kiethton

13,922 posts

181 months

Thursday 9th March 2017
quotequote all
brrapp said:
I always thought the salvage value was value of car minus the cost of repairs X around 50%, so in the OP, £5000 for the car, minus £3000 for repairs =£2000, times 50% = £1000
It wouldn't make sense not to take the cost of repairs into account, a salvage car which just needs a new bumper is going to be worth a lot more than one which has every panel damaged.
But what if the cost of repairs exceeds the value of the car? - in the above my 540i written off last week had an estimated repair bill of £5,900 vs. a value of £5,500?

Nemo Sum

Original Poster:

163 posts

137 months

Thursday 9th March 2017
quotequote all
My belief is that the repair cost is more influential as to whether the car is written off than to the value of the salvage, although it obviously must have some baring on the it.

Thank you all, you've helped clarify a few things.

wolf1

3,081 posts

251 months

Thursday 9th March 2017
quotequote all
I buy quite a few vehicles directly from the insurance companies and on average I pay just below 10% of the payout valuation regardless of vehicle age for cat C and D. Cat Bs we negotiate a touch more as they are break only. If I don't take them then they are picked up by one of the bigger players such as Hills or Copart.