There was a hailstorm during my husband's afternoon commute last week that dented the car, an '04 Honda Civic with 65,000 miles, all over. When we finally were able to get to the insurance company's appraisers on Wednesday, they agreed- by their estimate, there were dents on every body panel. The hood, top, and trunk of the car would need to be replaced. The rest of the dents would need to be popped out. The cost of these major repairs? $5,500. They gave us a check for that amount, minus our deductible.
Here's the thing. Our car, according the Kelley Blue Book, is worth about $8,000 if we tried to sell it. From my understanding, the insurance company totals the car if the damage is 70% of the value. So what would have been our magic number? $5,600. Just $100 short of their estimate. Go figure. But I digress.
So, we have a $5,000 check and a hail-damaged car. What to do? The choices we have:
- Fix it. The obvious one. But, do we really want to put cosmetic work into a car we're not absolutely in love with, to the tune of 70% of its value? Also, some of the dents would be popped out rather than the pieces being totally replaced, and those could rust more easily in the future.
- Don't fix it, and keep it. So, we'd be driving a hail-damaged car, and we'd have $5,000 in the bank towards the next one. The car was mechanically very sound, so it should be fine, as long as we can get over the weird stares.
- Get a new(-to-us) car. This isn't in the plan for about 3 years, but, as we said, we're not in love with this car. We've already discovered it's difficult to fit some car seats in, which is a concern as our family grows. (Not growing yet, but we're talking the future here.) Also, we don't have a car that can carry both people and stuff- the truck carries stuff, but only two people. The cars carry 4 people comfortably, but we can't take 4 people (or two people and a dog) camping at all.
We have a small car emergency fund saved up. With option 1, we'll end up spending the insurance deductible plus the check to fix the car. With option 2, we'd save the check, probably putting it in the "Replacement" fund. With option 3, we would be shopping for a car with a price at or below the insurance check + our deductible + the trade-in value of our damaged car.
Which would you do?
Which would you do?