Should we repair the car or opt for a total loss?
My wife and I’s insurance company has finally assessed the damage to her vehicle. The adjuster indicated that it’s on the verge of being declared a total loss and offered us the choice between pursuing repairs or totaling it (assuming no further damage is found by the auto shop). We could really use some advice on how to proceed.
Here are the details:
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The car is a 2021 Tucson with 55,000 miles.
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Estimated repair costs are around $7,500, but it could increase, and if it exceeds an additional $4,000, our decision would be made for us.
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Most of the visible damage is to the left rear quarter panel and bumper, and there may be some alignment concerns.
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The car has been valued at about $17,000, and since she still owes approximately $7,000, totaling it would net us just under $10,000.
Our main considerations in making this decision are:
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The future market conditions over the next 4-5 years, including the economy and potential tariffs on imported cars.
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How repairs might impact the vehicle’s resale value down the road.
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Ultimately, would cashing out $10,000 now be more beneficial than holding onto the car until the warranty runs out, enjoying a couple of years without payments, and then trading it in later?
We would greatly appreciate any insights or advice!
It sounds like you’re weighing some important factors in your decision-making process. Here are a few points to consider that might help you decide between repairing the car or having it totaled:
Financial Implications: You mentioned the insurance would give you just under $10k if you total it. If you choose to repair it and the repairs go over the initial estimate (which they often can), you could end up spending more than you were planning. Consider your budget for potential repairs and whether the lower monthly payments on a repaired vehicle outweigh the immediate cash from totaling it.
Car Value Impact: Typically, a vehicle that has been in a significant accident, even if well repaired, can lose resale value. This is known as “diminished value.” You may find that your 2021 Tucson, after being repaired, won’t hold its value as well compared to one that hasn’t been in an accident. If you plan to trade it in in a few years, this is something to think about.
Market Conditions: The used car market can be unpredictable, but given your car’s current valuation at $17,000 and its age and miles, it may still have good resale value in the coming years if kept in good condition. However, keep an eye on the trends regarding availability and demand for vehicles like yours, especially since economic factors can fluctuate.
Future Reliability and Satisfaction: Think about how comfortable you feel with the potential repairs. If you’re concerned about long-term reliability after repair work, it might be worth leaning toward totaling it. A new vehicle (or one without a significant accident history) could provide more peace of mind.
Personal Use and Needs: How crucial is the vehicle to your daily life? If you can manage without it for a while, or if purchasing a different vehicle is an option, it might influence your decision.
In the end, the choice may come down to your financial strategy and how much you value peace of mind versus immediate cash. If you choose to repair, be sure to get multiple estimates and consider asking about warranties on the repairs. If you total the car, you can also use that $10k as a down payment toward a new vehicle. Whatever path you take, make sure it aligns with your overall financial goals and comfort level!