What does a total loss vehicle mean?

[VanJoel]

A total loss vehicle refers to an insured vehicle that is completely destroyed or severely damaged to the point where it has no repair value, and the insurance company will declare it as a total loss. After obtaining approval from the insurance company, total loss vehicles can be traded. The disposal method for such vehicles typically involves auctions, and most total loss vehicles end up in the used car market. In cases where the insured object is not completely destroyed and can be repaired or recovered, but the cost of doing so would exceed the value of the salvaged object, making it not worthwhile, the insurance company may abandon further efforts and compensate the insured with the full insurance amount, which is known as a constructive total loss. According to Chinese law, vehicles that have reached their scrapping age must be scrapped, meaning they are legally prohibited from being driven on the road.