Car Replacement Decisions After An Accident

by Don Elliott on October 1, 2012

The accident happened so fast. One minute you are driving down the road and the next minute your car is smashed along the side of the road. Assuming that you don’t have to suffer the complication of injury, determining what to do with your damaged car and then finding a ride home, to work, to the grocery store and to take the kids to school comes next.

In most cities, when police are dispatched to an accident scene, towing agencies are also alerted to tow away any disabled vehicles. Unless you direct otherwise, your car will be towed to the towing company impound lot. It will sit there racking up outrageous daily fees until you and your insurance company decide what to do with it.

Point #1 – Unless you are cited for a crime when you are involved in an accident, you can call your own tow truck and have your car moved to wherever you would like to take it. Talk to the police officer to determine your options.

If your car is repairable, both the auto shop and your insurance company are motivated to get it fixed right away. If your car is a total loss, and no auto shops can complete the necessary repairs, you will need to beginning searching for a replacement vehicle.

Point #2 – Summarize your finances to determine your options. Assuming that you have collision coverage, your insurance company will settle your claim at somewhere close to the actual retail cash value. Check Edmunds.com or KBB.com for a quick idea of retail used car values.

Theoretically, you should be able to replace the car that was wrecked with a similar car in the same condition. Many people in this situation choose to use any settlement money to upgrade to a newer car.

Point #3 – If you owe money on your car, the debt at the bank, finance company or leasing agency will have to be paid as part of the settlement. In most states, the lien holder also holds the title. If you have the title to your car, you will have to surrender that to the insurance company to receive your payment.

It will take at least two weeks to receive any money from the insurance company. If you are at fault, your settlement will be reduced by the amount of your deductible. Many insurance companies provide rental car coverage until the results of the accident are figured out. However, driving the rental car won’t last any longer than the insurance company considers necessary.

Point #4 – Take some time to find the right car, even if you have to continue renting a car at your own expense for a short period of time. Buying a car is a big investment. Avoid making a bad decision on your next car by weighing all your options.

Finally, check with your insurance company to determine whether your rate will change as a result of the accident. If your driving record is otherwise good, particularly if the accident was not your fault, it is likely that your insurance will not change. Most insurance companies will do all they can to keep a good customer, even if you have been in an accident.

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