How does hail damage affect car value?

Question

I have a car with hail damage. I got an estimate and a check to cover damages. I will probably keep the car for another 4-5 years before trading it in. Is it smarter to keep the $3000 (approx) and put it toward payments or put the money into repairs? I'm assuming as the car depreciates, so does the damage cost. In other words, $3000 in damage now will not be the same amount for a significantly older car later down the road at trade in time. Thanks for your help

The car is a 2005 accord sedan and the hail damage, while noticable on inspection, is not really anything you would see just casually looking at the car.

Answer 1

At a certain point, a car will lose almost all value. You do not say how old the car is now, so it is a little harder to give informed advice. Assuming that the car is 3 years old now, and you are talking about keeping it another 4-5 years, you are going to be trading in a 7-8 year old vehicle with most likely a lot of miles on it! At that time the value of the vehicle is going to be determined by the condition it is in, and the market value of that make and model car.

While the costs of repair may go up over the years, with an older vehicle, the dealer is not going to look at repairing it. They are going to look at the market value of the vehicle in the condition it is in! For example if the car has an average wholesale value of $4000 and a rough value (average and rough are ratings) of $2500, the dealer is not going to say that the car is average but needs $3000 worth of damage repair so it is worth $1000. They are going to rate the vehicle as rough, and pay about $2500.

If you are going to keep the car, and do not mind the way it looks now, put the $3000 in the bank. Let it earn interest, and use the money to help pay for your car in five years.

Answer 2

what rege said is true, you can keep the money and put it towards the car payment and pay off your car earlier, or you can take it and have the damage repaired, either way you will come out ahead, either on the front(paid for car) or on the back(more trade in value). The choice is up to what you want to do and how long you plan on keeping the car. If, for instance, you keep the car for another 10 yrs, the value on you car will be appx. $1-1500, but if you trade your car in 3yrs, your trade value will be appx 1/3 actual car price and the lower you owe left on it will give you more towards your trade value. You can check out Kelly Blue Book to see what your car is worth. Good luck.

Answer 3

It depends on the damage.
If the damage is severe, you might want to get it fixed.

If the damage is small enough, and you plan to keep the car for several years, It might be of your benefit to keep it the way it is. at that time, your car will show a number of dings anyway. the paint might need replacement anyway too. The depreciation slows down and almost stops with the years.

Answer 4

The value of any vehicle is determined by market value minus the cost of unrepaired damage.
If it costs $3,000 to do repairs today, it might cost $4,000 to have the repairs done in five years. The value of the car continues to depreciate, but the cost of repairs is likely to increase.
You will not come out ahead by keeping the money. If you have repairs done, you will have a better looking car for the next five years.