If you own your car, you can technically sell it whenever you want. That said, you don’t want to sell your car before your insurer has surveyed the damage
If you sell your car before your insurance company has the chance to investigate a claim, you may not receive money for the repairs
If your car loses value after an accident and you sell it for less than it’s worth, depending on your insurer, you may be able to file a diminished value claim to recoup the losses
There might be a few reasons you’d want to sell your car before a car insurance claim was settled, maybe you planned on selling it already and then got into a car accident, or maybe you realized it was time to cash in on a safer, more family friendly vehicle. Generally, if you own your car outright you can sell it whenever you want, but it’s important to know what part of the claims process you are in before you sell your vehicle — you could risk complicating your claims investigation.
When you file a car insurance claim, an insurance company typically has around 30 to 45 days to settle your claim, depending on the state you live in. How fast your insurance company will settle your claim depends on the circumstances surrounding the damage. For example, roadside assistance claims tend to settle faster than liability claims where there are multiple drivers involved, and potentially conflicting accounts to sort out.
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When you file a claim for repairs to your vehicle, your insurance company assigns you a claims adjuster to survey the damage and estimate the cost of repairs. If you want to sell your car, but still have an open claim, you can sell it, but the damage to your vehicle is usually an essential part of the investigation into determining your liability in the accident.
If the claims process is mostly over and your insurance company has already determined who is liable, selling your car may not affect your claim. It’s important to note that even after your car has been repaired, an accident may still diminish the value of your car, but you may be able to file a claim to recoup some of losses from selling your car at its diminished value.
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Technically, yes, you can sell your car with an unsettled claim. That said, just because you can doesn’t mean you should. Whether or not you should sell your car while you have an unsettled claim depends on why you filed the claim in the first place and how far you are in the claims process.
When you file a claim after a car accident, your insurer will typically open up an investigation into that claim to determine how much the repairs cost and what you are financially liable for if you are found to be at fault for the accident. If there is an ongoing investigation into your claim, it’s probably smarter to hold onto your car until the investigation is wrapped-up, the at-fault party is determined and the settlement is finalized.
If you sell your car before your insurer looks at the damages, they won’t know how much the repairs cost. The same goes if you are filing a third-party claim against an at-fault driver — the damage to your car needs to be assessed in order for insurance companies to determine how much you should be reimbursed. If you want to sell your car while it is still damaged, that’s up to you, but your car will probably sell for less than if it had been repaired.
If the damage to your vehicle is minimal and there was no one else involved in the accident, it might be easier to just pay out of pocket for the repairs to your car, rather than file a claim, since filing a claim can raise your insurance rates in the future.
Whether or not you’ve filed a claim, selling a car before it's repaired will likely diminish the value. Even if it has been repaired, a past accident may still diminish the car’s value.
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If you want to sell your car, and realize it’s worth less than it was before an accident, you may be able to file a diminished value claim, depending on your insurance company. Once a car has been damaged, even if it’s been fully repaired, it can still lose value. Your car may lose value even if it’s back to near perfect condition, just by virtue of having an accident in its history.
It’s your responsibility to prove to your insurance company how much value your car has lost, so before selling your car, you should have it professionally appraised to learn how much its value has dropped. When making your case to your insurance company, look up your vehicle’s pre-accident value using a resource like Kelley Blue Book and compare the pre-accident value to your appraiser's new cost estimation of your car.
However, car insurance companies may have their own way of calculating diminished value claims, so filing a diminished value claim might not always result in getting paid what you think you are owed. You can still sell your car while you have an unsettled diminished value claim, but you’ll want to be sure you took all the necessary steps to determine how much value it lost before you sell it.
How long your car insurance claim takes to settle depends on a variety of factors, like what state you live in and how the damage occurred.
A few other common factors that may slow down your claim settlement include:
Who was involved in the accident, including passengers
How severe the damage is
If there were any injuries
Who was at fault for the accident
Typically, states require insurance companies to reach settlement within 30 to 45 days of accepting a claim. Selling your car after the damages have been assessed and the repairs have been made is usually fine, even if your claim hasn’t settled yet.
You should contact your insurance company to learn how long their claims process generally takes, or check out resources like J.D. Power to learn how efficient different insurance companies are when it comes to claims.