The Total Loss Trap: Why “Saving” the Car is Killing Your Business
by Chasidy Rae Sisk
Imagine this: A 2022 SUV rolls into your lot. It’s got a heavy hit to the front, the bags are deployed, and the customer is standing there with tears in their eyes, pleading with you to “save” their baby.
You’re looking at your production board; things are a little light this week, and your technicians are starting to sweep the floors just to stay busy, so you think to yourself, “If I can just keep this estimate under 65 percent of the ACV, I can keep my guys working. Maybe I’ll hold off on that expensive sensor calibration until the supplement, or I’ll source a few more alternative parts than usual.”
Stop right there!
That mindset – the “hero complex” where shops try to resuscitate a vehicle that the math says is already dead – is one of the most dangerous traps in the modern collision repair industry. In an era where total losses are skyrocketing, trying to “save” a total isn’t just a headache: it’s a recipe for liability, reduced profitability and a “race to the bottom” that nobody wins!
It may seem like more cars are totaling than ever before. That’s fair; analysts are predicting that up to 30 percent of shop work could be deemed total losses in 2026 due to lower insurance thresholds, AI-driven claims, rising parts prices and higher salvage payouts. The industry is currently dealing with a perfect storm of economic factors.
“During COVID, used car prices went sky high because you couldn’t get new ones,” explains Mark Olson (Vehicle Collision Experts). “Now, the market is normalizing. Dealers are offering rebates and zero-percent interest on new cars, which kills the used car market because it lowers their actual cash value (ACV). At the same time, salvage pricing has increased, and repair costs have exploded, largely due to ADAS; a simple bumper repair could require a $3,000 camera replacement and hours of calibrations.
“When you look at the total loss formula and take all of that into consideration, the cost to repair is more likely to exceed the ACV,” Olson breaks it down. “Insurers are always going to do what’s in their best interest financially, and with repair costs up, it’s often cheaper to replace a policyholder’s vehicle.”
Acknowledging that the increase in total losses has caused many shops to panic because this trend is simply not sustainable for their businesses, David Luehr (Elite Body Shop Solutions) cautions against resorting to drastic measures like “writing an estimate that won’t total, knowing that you’ll need to add costly supplements later. That’s a dangerous game, and I don’t recommend playing it.”
Luehr understands that “when fear sets in and we’re desperate for work, people do what they have to do to eat,” but his advice is pretty straightforward: Don’t give in to the fear and uncertainty. “I’m not going to tell a shop how to run their business, but your number-one priority has to be a safe, quality repair,” he warns. “Trying to prevent a car from totaling could jeopardize the integrity of the repair, but if a shop can shave a few dollars off a repair and still perform a quality repair, that may be a valid business decision that allows you to continue operating – as long as you aren’t cutting corners to do it.”
Rather than trying to save total losses, Luehr believes shops should focus their energy on attracting more sales by identifying their Unique Selling Proposition (USP). “There are still a lot of cars out there that aren’t getting repaired; you just need to figure out how to convince customers to bring them into your shop.” (Learn more about how to identify your shop’s USP via this month’s cover story in New England Automotive Report at grecopublishing.com/new-england-automotive-report-march-2026.)
Olson points out that trying to save a car from totaling because of a low workload creates a lose-lose situation. “Why would you want to save a car? You’re likely lowering your price or your quality just to keep the lights on, but your fixed costs remain the same. It’s killing your profitability.”
Still, he understands that there are some situations that may warrant additional consideration. “Sometimes customers are upside down in financing – they have a gap or no gap insurance – and you might have a conversation about that, but if you would never try to repair that vehicle under normal circumstances, trying to do it just because you’re slow is probably the wrong answer. If it’s worth talking to the customer about, it’s likely going to turn into a dollar conversation, so I recommend being well-versed in Right to Appraisal since that might offer a legitimate way to prevent the vehicle from totaling.”
Fortunately, a total loss doesn’t have to be a “loss” for your shop. In fact, when handled correctly, a total loss can be a highly efficient, high-gross-profit center. “Shops can make $4,000 to $6,000 on a total loss if they understand how to leverage their business,” Ryan Taylor (BodyShop Booster) recently noted. The key is to stop treating the total loss as a failed repair and start treating it as a professional service.
So, how can shops do that?
“Identify it quickly,” Olson urges. “We often know it’s a total right away, but if it’s questionable, pull all the OEM procedures and write a thorough repair plan. And if it’s a total, let everyone know up front. Don’t try to stretch storage just to make a buck. If you hang onto the car to rack up fees, insurers will be even more apt to bypass your shop in the future.”
Another key to approaching total losses professionally starts with the paperwork. “Be clear about what you’re charging – storage, administrative fees, teardown and research – by disclosing it in your contracts and posting it on your walls,” Olson stresses. “You deserve to be paid for the work performed, but you want to be transparent about those costs from the very beginning.”
Shops may be frustrated by a total loss, but just imagine how heavily these situations weigh on the vehicle owner. Become the hero who saves the customer instead of the car. “Customers get caught in the middle between the shop and the insurer in a scenario that they typically have never experienced before,” Olson laments. “Don’t make the experience even more traumatic.”
While total losses can be profitable, there is a fine line between professional billing and gouging, he points out as he recalls a Washington shop that held a vehicle for three years, eventually suing the customer for a $400,000 bill after the insurer abandoned the car. The shop won a settlement, but they lost their reputation and eventually went out of business. “Imagine the Yelp review on that!” Olson says. “Total losses can be a profit center, but don’t try to make your entire year’s profit on one car.”
Instead, focus on making the best of a bad situation by delivering a great customer service experience. Help the customer navigate the total loss and offer guidance to help get them into their next car.
The industry’s pushback against “saving” totals is rooted in one thing: Safety. As difficult as it may be to accept, the shop doesn’t determine if a vehicle is a total loss; the car does. The damage sustained dictates the repairs needed – ignoring damage, skipping steps or using cheaper parts just to keep the repair under a certain dollar amount jeopardizes vehicle safety and puts families at risk.
The hard truth is that the market is shifting. Between lower thresholds, AI-driven triaging, skyrocketing parts prices and increased salvage payouts, shops are left with a simple choice: fight the math or master it. Instead of fearing the total loss, embrace it as a vital part of the shop’s business model. Get contracts in order, charge for research, and focus on the customer relationship.
When you stop trying to “save” that 2022 SUV by cutting corners and instead start focusing on performing a proper, professional assessment, it changes your odds; you’ll no longer be engaged in the race to the bottom. Don’t let a light production board trick you into a “hero complex” that puts your customers – and your business– at risk.
Want more? Check out the April 2026 issue of Hammer & Dolly!