How is the salvage value of a car determined?

A vehicle's salvage price is roughly determined by the vehicle's market value before the accident minus the cost of repairing the damage to the vehicle. The percentage at which the insurer calculates salvage on a vehicle also affects the final cost.

A vehicle's market value is generally determined by the average trade-in or sale value for comparable vehicles. The cost of the damage subtracted from the vehicle's value usually includes the damage caused by the accident in which the vehicle was involved but also any pre-existing damage or wear and tear. Most insurers calculate salvage at 75 percent, but some may give slightly higher or lower figures.