Should We Repair or Total the Car?
My wife and I received an estimate from our insurance company for the damage to her car. The adjuster indicated it’s on the verge of being totaled, giving us the choice to either total it or proceed with repairs (assuming no further damage is uncovered at the auto shop). We’d really appreciate your input on what to do next…
- The car is a 2021 Tucson with 55,000 miles.
- The estimated repair cost is around $7,500, but it could increase, and if it goes up by about $4,000 more, we would have to total it regardless.
- The visible damage primarily affects the left rear quarter panel and bumper, and there may be some alignment issues.
- The insurance company values the car at approximately $17,000, and since she still owes about $7,000, we would receive just under $10,000 if we choose to total it.
Our main concerns include:
- The market outlook in 4-5 years when we might want to trade it in (including factors like the economy and tariffs on foreign cars).
- The impact of these repairs on the car’s future value.
- Essentially, is taking the $10,000 now better than holding onto it for a few more years, enjoying no payments until the warranty expires, and trading it in later?
We’d greatly appreciate any insights or advice you can offer!
It sounds like you’re in a tough spot, but here are some factors to consider that might help you make your decision:
Repair Costs vs. Vehicle Value: With an estimated repair cost of $7,500 and the potential for additional costs, you’re already approaching the threshold where insurance companies typically consider a car totaled. If repairs exceed around $11,500, it may not be worth keeping the vehicle. On the flip side, if you total it, you’re looking at about $10,000, which could provide you with positive equity, especially since you owe $7,000.
Future Resale Value: Cars that have been in significant accidents often have lower resale values, even after repairs. If you choose to repair and then trade in or sell the car in a few years, you might find the value impacted due to its accident history. This could affect your bottom line when it’s time to move on, especially if the market shifts negatively.
Financial Considerations: If you total the car, you’ll have approximately $10,000 to work with, with no future repair costs hanging over your head. This could allow you to pay off the remaining loan and possibly look for a more reliable vehicle or one that better meets your needs. Conversely, if you enjoy a couple of years without payments and the car remains reliable, that could also be a suitable option.
Peace of Mind: Consider your comfort levels with potential repairs. If you go with repairs, having that uncertainty may be stressful. If you total it, you at least have a clean slate to work from.
Market Conditions: You mentioned concerns about future market conditions. While it’s hard to predict, typically newer vehicles (like your 2021 Tucson) depreciate more slowly initially. Should you decide to keep it, consider how long you plan to keep it and if it aligns with your financial goals.
Warranty Considerations: Since a warranty generally covers many repairs, if the car becomes less reliable after the warranty ends, it could lead to expensive repairs that you might not feel confident in addressing.
In summary, weigh the potential hassle and costs of repairs against the peace of mind and financial return of totaling the car. If you prioritize a clean financial slate and avoiding potential depreciation from being a damaged vehicle, totaling might be the way to go. However, if the car is otherwise reliable and meets your needs, and if you are ok with some risk regarding future repairs, fixing it could be worth it. Ultimately, it depends on your financial situation, risk tolerance, and long-term plans with the vehicle. Good luck!