Do Body Shops Make Money if They Total a Car?

When your car is damaged in an accident, you may wonder if the body shop will make more money if they total your car rather than repair it. The answer is: it depends.

Factors that Affect Whether a Body Shop Makes Money from a Totaled Car

There are a number of factors that can affect whether a body shop makes money from a totaled car, including:

• The severity of the damage: If the damage to your car is severe, it may be more expensive to repair than it is worth. In this case, the body shop may recommend that your car be totaled.
• The age and condition of your car: If your car is old or in poor condition, it may not be worth repairing, even if the damage is not severe. In this case, the body shop may also recommend that your car be totaled.
• Your insurance policy: Your insurance policy will determine whether you are paid the actual cash value (ACV) of your car or the replacement cost. The ACV is the value of your car before the accident, minus depreciation. The replacement cost is the cost of replacing your car with a similar one. If your car is totaled, you will receive the ACV or the replacement cost, depending on your policy.
• The body shop’s profit margin: Body shops typically make a profit margin of 10-20% on repairs. However, this profit margin can vary depending on the severity of the damage and the age and condition of your car.

How Body Shops Profit from Totaled Cars

Body shops can profit from totaled cars in a number of ways, including:

• Selling the salvage: When a car is totaled, the body shop can sell the salvage to a salvage yard. The salvage yard will then sell the parts to other body shops or individuals.
• Charging for storage: If your car is totaled and you do not want to sell it to the salvage yard, the body shop may charge you for storage. The storage fee will vary depending on the body shop and the length of time that your car is stored.
• Charging for administrative fees: Body shops may also charge administrative fees for processing your claim and handling the paperwork related to your totaled car.

How to Avoid Being Taken Advantage of by a Body Shop

If you are concerned that a body shop may be trying to take advantage of you, there are a number of things you can do to protect yourself, including:

• Get multiple estimates: Before you decide to have your car repaired or totaled, get estimates from at least three different body shops. This will give you a better idea of the fair market value of your car and the cost of repairs.
• Read your insurance policy carefully: Make sure you understand your insurance policy and what it covers. This will help you avoid any surprises when it comes time to file a claim.
• Be prepared to negotiate: If you are not satisfied with the estimate that a body shop gives you, be prepared to negotiate. You may be able to get a lower price if you are willing to pay for some of the repairs yourself.

Conclusion

Whether or not a body shop makes money from a totaled car depends on a number of factors. However, there are a number of things you can do to protect yourself from being taken advantage of by a body shop. By getting multiple estimates, reading your insurance policy carefully, and being prepared to negotiate, you can ensure that you get a fair deal on your totaled car.