I have a 2004 Hyundai Sonata LX that I bought about two years ago for $4000. I live in Massachusetts and the car has a bit of rust on it (okay quite a bit of it) but I’ve been pretty happy with it otherwise. Recently, my car was hit by a hit and run driver while the car was parked outside my house. Luckily, the neighbors got the person’s license plate number and so I’m in the process of filing a claim under her insurance. The adjuster came out and looked at my car and estimated the repairs to total $1500, but he did note that there was rust on the car, and I imagine the insurance company might try to give me a bit less for that reason. The part of the car that is damaged is the rear bumper and quarter panel (that panel is completely rust free-- The rust is all on the bottom and a few spots around the sunroof that I’ve tried to cover up but have only managed to slow down the spread…)
As I said, I’ve liked the car so far, but it does seem that there are some problems developing. It’s about time for new brakes; there are some suspension issues developing (front and rear driver’s side are both quite noisy all of the sudden-- the front passenger side especially just started squeaking pretty much every little bump or turn in the road), and of course there is the rust. Given that the car is now 11 years old, has 165k miles on it, and has a rust problem that is only going to get worse, I feel like it may be time to jump ship. Putting the $1500 into the car for body repairs seems dumb given that it is about half of the value of the car in good condition. I really want to make the most of my investment in this car however before moving onto another car. What do you recommend? As far as I see it, I have the following options:
Fix brakes and whatever is absolutely necessary for the suspension to get me through the winter. Buy a used car for $5-7k outright or put a substantial down payment on a newer used car and finance the rest. Sell current car for whatever amount I can get or use as leverage for a trade-in.
Abandon ship immediately. Don’t put another penny into this car. Buy used car / try to sell damaged car for whatever I can as in #1
Put money into maintaining the Sonata. Potentially even fix body damage.
Doing a repair which costs more than the value of the car still make sense. The valid comparison is: how does it affect your wallet doing it that way vs buying another car? Its going to cost $$ either way.
The insurance companies pretty much rule the roost after an accident. They’re required to pay no more than the value of the car before the accident. And that might not be enough to pay for the repairs. A lot of cars get an early trip to the recycler b/c of that.
They’re probably going to total the vehicle because of it’s mileage/age/condition. This means they’ll cut you a check for a certain amount and the insurance company is going to take the vehicle.
Or! What you can do is retain salvage on the vehicle. This means once a fair price is agreed upon for the vehicle, money is deducted from that price. So for example if $2000,00 is what the insurance company offers, but in order for you to retain salvage, you get $1500,00 and the car.
This way you still have a vehicle to drive while looking for a replacement vehicle with $1500.00 in your pocket.
Also, the insurance company has to tow the vehicle away and pay storage. That’s money!
The car is definitely still driveable. To be honest, I was surprised that the estimate for repairs was as high as it was. The quarter panel is bowed in and scratched quite a bit, there is a big dent in the bumper, and the bumper is a little bit unattached from the frame on the side, but it’s entirely cosmetic and somehow not really that noticeable unless you’re looking for it. My girlfriend actually didn’t even see it until she looked really closely for it. Once you see it though, it’s obviously damaged.
The issue of how it impacts my wallet if I put the money into this car vs. getting another car is exactly what I’m trying to determine. I agree that it will cost money either way and so what I’m trying to determine is really what is the best thing to do with the car I have. I feel that no matter which option I choose, the actual value of the car won’t be that high. If I put the $1500 into repairs, I think I would still only be able to sell it for slightly more than that as a private sale if I were to go that route. Then there is the cost of the outstanding maintenance to the car I’m trying to factor in. What I’d really like to determine is if the car is a money pit at this point and I’m better off cutting my losses.
Regarding the car being totaled, I really didn’t think that would be a possibility. It didn’t look like that much damage at all and I just received the estimate of the damage. Even after seeing the estimate, I didn’t think it would be totaled until I read your opinions here and checked the KBB current value for my car (about $2000, though cars in my area often go for more than KBB value). Is there a certain percentage of value at which an insurance company will total out a car? I really didn’t even consider that this might actually happen until you guys mentioned it to me.
I would take the insurance money and drive the car as is/as long as it is safe. Fix important stuff like the brakes as needed and when the car stops, buy another one.
At the meantime, you should put the insurance check and a monthly $$$ toward your next car.