Should I repair my car’s damage or pocket the cash?

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This article is brought to you by Your Car Credit.

If you’re like the vast majority of automobile owners, there will come a point where your vehicle is damaged in an accident. These can range from a minor fender-bender to a total loss of the vehicle, but the majority of cases wind up being rather small in nature.

Your insurance company will provide a determined amount of money for repairs whenever you file a claim – technically, you do not have to use the money provided to repair the vehicle. Because finances can often be tight and there are times where replacing the vehicle might be a better idea, many people wonder whether they should have the repairs performed, continue driving the vehicle as-is or procure a new one altogether. Below, we’ll attempt to shed light on the choices you have so that you can make the right decision.

Advantages of repairing

Car repair may be the best optionIf you plan to keep the vehicle for a while, then repairing it may be in your best interest. Especially true if functionality is impaired, the money that the insurance company will provide ensures that your vehicle can be brought back into working order.

The lack of repairs can decrease the value and resale potential of your automobile as time goes on, so newer vehicles – regardless of whether you plan to keep it or not – should be repaired to protect this aspect. Your mind will also rest easy in knowing that any damage sustained has been repaired and that no further complications will arise from the damage in the future.

Advantages of not repairing

Minor car damage may not be worth repairingIf the damage is minor and not compromising in any way the day-to-day operation of the vehicle, then pocketing the cash from the claim can come in handy. There are obviously a number of things you could do with this cash: you could save it for a later date, spend it on some other task that you’ve been putting off or even (not recommended) go on a shopping spree.

Many people struggle from paycheque to paycheque, however, which means that you probably need to catch up on bills if you’re considering this angle. A small crack in the fender or scratches in the paint don’t significantly impact performance or resale value, so this too is something to consider.

Advantages of financing a new vehicle

When faced with damage to your vehicle and a potential cash infusion, you may be thinking it’s time to trade in the vehicle for a new one. With the car still running and cash in hand, you can decide that trading the car in today and using the claims money as an additional down payment may be the best solution. If your car is older, then you don’t want to sink a lot of money into it – it may be time to bite the bullet, trade it in and finance a new one. Depending on the extent of the damage, you may have enough on-hand to make a hefty down payment on a new ride. Remember: the more you can pay down at the beginning, the less the new car will cost over time.  With lower interest rates these days, it has never been more affordable to finance a vehicle through the right lenders.

The decision to repair the vehicle or pocket the difference will depend on your personal circumstances. If you have an older vehicle and the damage isn’t severe, then you’re probably better off pocketing the cash or trading the vehicle in for a new one. If the damage is more severe, the car is newer or you still owe on it, then it’s generally a better idea to have the repairs performed. With this information, you can be sure to make the right decision in any of these situations.

Your Car Credithttps://www.yourcarcredit.com
This article was provided by Your Car Credit, providers of car finance for people with bad credit and quality used cars.


  1. A great blog! But it totally depends on the condition of your car… if it has a major damage then either go for claiming or else switch to new one…if you feel its not repairable.

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