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What happens to the license plates when a car is totaled?

What happens to the license plates when a car is totaled?

A car is considered a total loss if it costs more to repair it compared to replacing it with an almost similar car. Your car insurance always has 2 options while compensating you after a car accident or after any insurable event like fire, theft, and others.

Your car insurance company might compensate you by paying for your car repairs, or replacing your car if it can not be safely repaired for safe driving. In some states, your car could be declared a total loss if the costs to repair it exceeds 70% of its current market value.

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What happens when a car is considered a total loss?

If your car is totaled, the insurance company, instead of paying to repair your car will cut you a check to replace your car. 

It won’t pay the original price you paid for the car but will pay an amount that is worth your car in the current market, taking into consideration things like depreciation, mileage, tear and wear, and others.

The insurance company will pay you what is known as the actual cash value of your car. This almost helps you to buy a similar car according to the market value.

totaled car
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Do you retain your car wreck?

The answer is no. The car gets into possession of the insurance company that settled your claim. You can negotiate with the insurance company if want to retain the car wreck, but the insurance company will deduct the salvage value of your car from your settlement amount.

Once your car is totaled, I recommend you inform DMV to cancel the registration and also inform your insurance company to stop charging premiums.

What is a total loss?

Here is an example to explain what a total loss is. Assume your car is worth $6,000 according to the current prices of similar cars in the current market. 

You had a car accident in which your car is damaged beyond repair. In such cases where your car is damaged beyond repair, the insurance company has no option but to declare your car a total loss.

Related: Car insurance guide to what happens to the license plates when a car is totaled?

If for instance, it costs more than $6,000 to repair your damaged car, your insurance company will declare your car totaled because it looks cheaper to replace your car than repair it.

Factors that contribute to your car is totaled.

Some factors that contribute to your car being totaled are:

1. Extensive damages. This makes it impossible for your car to be safely repaired.

2. Age and Condition of your car. Old cars and those with higher mileage are most likely to be totaled.

3. Safety issues. For instance damages to your car frame will likely end up having your car totaled.

4. Theft. If you can not recover your stolen car, your insurance company will declare it a total loss.

5. Flood damages. Damages due to natural disasters like fire or floods have a higher potential to damage your car beyond repair.

6. Salvage title. On the next minor car accident, your car with a salvage title will most likely be declared a total loss.

totaled car

What happens to the license plates?

What happens to the license plates if your car is totaled depends on your state and the insurance policies that settled your claim. 

In normal circumstances, the car wreck belongs to the insurance company and they have an option of either selling the car wreck (salvage) to the salvage yard or scraping it for spare parts. 

Because you no longer own the car, you can decide to return the license plates back to the department of motor vehicles (DMV), or keep them and transfer them to the new car if you choose to. 

I encourage you to enquire any car accident attorney or your insurance claims adjuster to get a clear picture of what to do with your totaled car’s license plate. Deciding to return the license plates to DMV implies canceling your totaled car registration.

How to transfer or surrender the license plates?

To surrender your totaled car license plates, do the following.

  • You can mail it 
  • You can walk in and hand deliver it to DMV
  • You hand the plates to your next police station.

To transfer the license plates to another, you will have to apply by filling out a form or completing the application form online.

What to do with the license plates after a car is totaled?

What to do with the license plates when your car is totaled depends on where you come from. In some states, the license plates belong to you and you decide what to do with them. You could decide to transfer them to another car.

car accident, fire, street-2789841.jpg

In some states, you are required to return the plates to DMV or face penalties like fees and fines. I know of some states which give a 30-day ultimatum to return the plates to DMV.

In summary, what happens to license plates if your car is totaled depends on many factors. Some states will ask you to return the plates to DMV, while in other states, you are free to keep your totaled car’s license plates.

In some states, it is so much strict that you will need to present an affidavit indicating the license plates on your totaled car got lost, or are destroyed.