Last month, we got into a little car accident when we were in California for Christmas. That was a drag because we haven’t been in an accident in years. We met up with a friend for a playdate and went to grab lunch afterward. Unfortunately, this parking lot was terrible. There were a bunch of cars trying to find a spot and people making u-turns to get out of the tiny parking lot. I was driving down the lane when I noticed a car backing straight toward us. I honked, he kept going, and bang! Fortunately, it was a low speed collision and nobody was hurt. Mrs. RB40 was shaken up, though. Our car got a good size dent on the rear quarter panel and the bumper.
Anyway, this was the guy’s first accident and luckily he had insurance. He was shaken up too and didn’t want to move the vehicles until he talked to his insurance company. We were blocking traffic for about 20 minutes while he tried to get a hold of his agent. Eventually, we exchanged information and went on our ways. His car was a pretty new 2015 Toyota.
What to do when you have a car accident
- Make sure no one is hurt.
- Take a deep breath and stay calm.
- Turn on your hazard lights and put up cones or flares if you have them.
- Do not admit fault. Do not discuss the accident with the other party at all if possible.
- Call an ambulance or the police if needed.
- Get witness information.
- Exchange driver license and insurance information.
- Take pictures.
- Call your insurance company immediately.
Actually, I put off calling my insurance company until after we had lunch and got back to my brother’s house. I described the accident and gave them all the information. The other party’s insurance company called me soon after and I went over the accident again. Basically, it’s your fault if you back into another car. Now I need to figure out if I want to go with my insurance or his insurance.
- $1,000 deductible. I’d have to pay $1,000 out of pocket for any repairs. My company would go after the other company and send me a check if it works out.
- No rental car coverage.
- My insurance company has my best interest at heart. (That’s what my agent said anyway…)
- They can work with the body shop or send me the check directly.
- I don’t have to deal with the deductible.
- Keeps my record at my insurance company clean.
We established that the accident wasn’t our fault so I decided to go with their insurance company to start with. If I ran into any problems, then I’d get some help from my insurance company.
We had an uneventful drive to Portland and took a few days off just to rest. I went to a local body shop to get an estimate and both insurance companies sent an estimate guy to take a look at the car. Here is what we’d get if we choose the cash out option.
- $100 – Kid car seat replacement. Apparently, the car seat needs to be replaced when you have an accident. This was just a small fender bender, but they still need to cover the cost of replacement. We agreed on $100.
- $1,946 – The cost to repair the damage.
- $175 – The body shop estimated that it would take 7 days to fix the damage. The cash out option is $25 per day.
That’s a total of $2,221.
Here is a close up of the dent. It looks worse from certain angles.
Should I fix the dent?
Now the question is – Should I fix the dent? It was a low speed collision and it’s just surface damage. Our car is a 2010 Mazda5 and it is in good shape. Let’s go through both cases.
Fix the dent
- Our car will be spotless again.
- Maintain resale value.
Leave the dent
- We get to keep $2,221!
- The dent isn’t very noticeable. I hardly see it anymore.
- I’ll need to clean it up and put some touch up paint on.
- The car is over 5 years old and we plan to drive it into the ground. The car wouldn’t be worth much in 10 years anyway.
- We plan to move to our rental home in a few years. The home is in a very crowded part of town and there will be no dedicated parking spots for us. We’d have to park on the street and I’m sure we’ll pick up a few more dents there.
Right now, I’m leaning toward not fixing the dent. The car isn’t new and it is bound to pick up more dents soon. I could use the money to shore up our cash position and invest when the market is low. Maybe that would be a good experiment. We can see if the investment will be worth more than the car at some point in the future. Lastly, we paid for the car with cash so we don’t have a car loan on this vehicle.
What do you think? Would you fix the dent or pocket the money?
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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