Total Loss in Arkansas: The 70% Threshold and What Your Car Is Worth
Arkansas uses a 70% threshold: a car up to seven model years old is a salvage vehicle when its damage equals or exceeds 70% of its average retail value, as listed in an approved pricing guide. Arkansas’s insurance rules also set how your settlement must be calculated. Here is how the rule works, how taxes and fees are handled, and what to do if the offer looks low.
Quick note: this is about total loss, when the car is not being repaired. If your car was repaired but is now worth less, that is diminished value, a different process.
Start The Total Loss Appraisal Process
If your insurer’s offer does not look right, do not rely on guesswork. DVAC can review the valuation, identify problems, and provide an independent total loss appraisal to help you challenge a low settlement offer.
No obligation required.
A+ Rating on BBB | Servicing Clients Nationwide
Key takeaways
- Arkansas uses a 70% threshold: a car is a salvage vehicle when its damage equals or exceeds 70% of its average retail value in an approved pricing guide.
- The rule covers cars up to seven model years old at the time of the damage.
- A cash settlement is based on the cost of a comparable car in your local market area, or at least two quotes from qualified dealers or appraisal services.
- Taxes, license fees and transfer fees are included when they are actually incurred, so keep your receipts if you buy a replacement.
- If the offer looks low, an independent total loss appraisal gives you a documented Arkansas market value to challenge it.
What is Arkansas’s total loss threshold?
Arkansas’s threshold is 70%. Under the state’s salvage rule, a vehicle is a salvage vehicle if it is water damaged or has any other damage equal to or exceeding 70% of its average retail value, as listed in the most current issue of a pricing guide approved by the Commissioner. The rule does not cover vehicles more than seven model years old before the year of the damage. (Source: Arkansas DFA Rule 2007-8, implementing A.C.A. 27-14-2301. General information, not legal advice; confirm the current rule for your situation.)
Arkansas total loss at a glance
Item | Arkansas |
Threshold | 70% or more |
Applies to | Cars up to 7 model years old |
What counts | Damage to the vehicle |
Compared with | Average retail value in an approved pricing guide |
Water damage | Salvage regardless of the percentage |
Valuation | Local comparable car, or at least two quotes |
Taxes and fees | Included when actually incurred |
What you are paid | Cost of a comparable car, less your deductible |
How they decide if your car is totaled in Arkansas
The insurer estimates the damage and compares it to your car’s average retail value in an approved pricing guide. For a car up to seven model years old, once the damage reaches 70% of that value, it is a salvage vehicle. For example, if your car’s average retail value is $20,000, damage of $14,000 or more makes it salvage in Arkansas. A water-damaged car is salvage regardless of the percentage.
Because the whole decision rests on your car’s value, getting that number right matters. It is worth understanding actual cash value versus fair market value.
How Arkansas requires your payout to be calculated
Arkansas’s settlement standards for auto claims are in Section 10 of Arkansas Insurance Department Rule 43. On your own policy, the insurer must either:
- Offer a specific comparable car available to you, with taxes and fees paid at no cost to you other than your deductible; or
- Pay cash based on the actual cost, less your deductible, of a comparable car in your local market area, or, if none is available locally, on at least two quotes from qualified dealers or appraisal services.
If the insurer settles on another basis, it must document your car’s condition, and any deductions, including for salvage, must be measurable, itemized and specified in dollars. The basis for the settlement must be fully explained to you.
Does an Arkansas total loss payout include sales tax?
Partly, and the details matter. Rule 43 includes all applicable taxes, license fees and other fees actually incurred to transfer ownership of a comparable car. In practice, that means these amounts are tied to an actual replacement purchase, so keep your bill of sale and tax receipts if you buy another car. Also note that the Arkansas Department of Finance and Administration says an insurance settlement does not count as a sale for its used-vehicle sales tax credit.
How your total loss payout is set
Your payout should equal what it would cost to buy the same car again today in your local Arkansas market. Insurers often use a third-party valuation report, such as a CCC valuation, that compares similar vehicles, then adjusts for your car’s details. Here is what moves the number, and for a closer look, see what your totaled car is worth:
What affects your payout | How it moves the number |
Mileage | Lower miles raise value; a wrong higher reading lowers it |
Condition | Clean condition raises value; heavy deductions lower it |
Trim and options | Factory options and higher trims add value, if counted |
Local market | Prices for the same car in Arkansas set the baseline |
Comparison cars | The vehicles used for comparison can pull the number up or down |
Can you keep your totaled car in Arkansas?
Often, yes, if your insurer agrees. If the insurer pays the claim but does not take the title, it must notify the state that the car is a salvage vehicle, and the title will be branded salvage. The salvage deduction must be itemized in dollars, so ask for it in writing before you decide.
What to do if your Arkansas total loss offer looks low
Ask for the full explanation of the settlement Arkansas requires. Is the comparable car from your local market area? If quotes were used, are there at least two? Is every deduction itemized? Look for the wrong mileage, missing options, or comparison cars that do not match yours.
If your research lands above the offer, ask for a corrected valuation. Then check your policy for an appraisal clause, a provision many policies include for resolving a disagreement over value, and see how to dispute a total loss settlement offer step by step.
How an independent appraisal helps in Arkansas
Arkansas’s rule allows quotes from appraisal services when no comparable car is available locally, and a documented appraisal is the clearest way to show an Arkansas car’s real value. Our total loss appraisal service values your vehicle using comparable vehicles in your local market and gives you the documentation to challenge a low offer. You stay in contact with your insurance company, and we advise you on what to say and what to do next. If the appraisal clause is invoked, DVAC negotiates and resolves the value with the third-party appraiser the insurance company hires.
Look at a sample total loss appraisal report to see what the insurer receives.
Arkansas total loss questions
Is Arkansas a 70% total loss state?
Yes, for cars up to seven model years old. They are salvage when damage equals or exceeds 70% of average retail value.
What value does Arkansas use for the 70% test?
The average retail value listed in the most current pricing guide approved by the Commissioner.
Does my Arkansas insurer pay sales tax on a totaled car?
Rule 43 includes taxes and fees actually incurred to transfer a comparable car, so keep your receipts if you buy a replacement.
What does an insurer pay for a totaled car in Arkansas?
The cost of a comparable car, less your deductible if you claim on your own policy, and less the salvage value if you keep the car. Learn more in total loss settlements: what you need to know.
Get a free Arkansas total loss appraisal consultation
If your Arkansas offer feels low, start your appraisal or call (877) 879-0101 for a free consultation, and we will give you a documented market value to support your claim.
Real Reviews, Real Results
Total Loss Appraisal Report:
Wondering what’s in a DVAC appraisal? Take a look at this recent appraisal we completed for a client.
