I was rear ended in July. The adjuster accepted fault and they estimated $5500 in damage to my car. The trunk is all jacked up. The muffler is also jacked up. I've been driving it around for almost a month and a half now. I have taped the bumper and it runs fine. I owe about $6400 on it. In perfect condition, it is worth about $7500.

I just got the check for $5500 in the mail today. I have considered just putting that money on my loan and paying it off next month. Some part of me says why pay $5500 on a car barely worth that much? I can almost knock out the debt altogether. That will free up $212 a month. I could honestly care less what the car looks like. It drives fine. I look at it like, I got hit and am basically rewarded with a perfectly running car almost for free (still haven't gotten my settlement for injury).

What do you guys think? Is there ANY requirement that I do get this fixed? The check is in my name and my credit union's name. I was just going to cash it and put it directly on the loan. If my car can pass inspection, I will definitely go this route.

The vehicle has to pass inspection. In some states you can get a ticket for relatively minor damage such as a broken tail light since it is expected to create unsafe driving conditions and tickets contribute to state budgets.

Funny thing is, all of the lights work. I have been in front of cops and haven't gotten a ticket or anything. So I'm not worried about that.

I'm going to take it to get a free state inspection this week. If it passes, then it's all good. I may even use the money to put towards the loan, then try to sell the car. Most likely though, I will continue to drive it as it is. I've seen much worse looking cars on the road. LOL

But if the trunk doesn't work, how will you manage to keep the leprechaun contained?!

LOL

If you owe less than the check, I would just pay off your car loan, but if you owe more than I'd just use the check proceeds to repair the car. If you do owe on the car contractually (with lien holder)you are supposed to get it repaired.

I owe more. But after I pay down the loan with the check, I will owe about $900. I will just proceed to pay that off.

Don't you have to FIX the car per the insurance company contract???

Not sure. They just mailed me a check. No instructions. I'm guessing I can do what I want. That's why I came here.

They usually have the check written as JOE SMITH and MARK'S BODY SHOP

It is in my name and my credit union's name. I'm sure my credit union wouldn't object to me paying down the loan.

Your credit union and loan documents probably stipulate that you are required to repair the vehicle so you may need to pay off the loan (immediately) if you are not repairing it. Otherwise, you may be in technical (non-financial) default on your loan. The credit union will probably have to co-endorse the check.

Was the check from the other party's insurance? If so, sometimes they will just mail a check if it is considered a total write off where the repair costs are close to the estimated value (less salvage value). Did you have to sign a release of liability to get the check?

If you do not repair the vehicle, you may want to check with your own insurance company AFTER you have paid off the loan and have clear title. Some policies may not cover a vehicle for collision and/or comprehensive that has been "written off" but not repaired. You would save on your premiums, but the policy would just provide liability if you are at fault in a future accident.

Good luck.

Better check with your agent and/or the loan company (credit union)

The credit union would have a collateral that is of diminished value

That woudn't be an issue since he's paying the loan off.

Exactly. LOL!

I spoke with the adjuster, and he just told me they would mail me a check. I didn't have to sign anything at all. After the loan is paid off, I will definitely drop all unnecessary insurance.

Thanks for your post!

I think what WTOBM is talking about is a totaled vehicle. Wherein that case they'd need to get your title, so the check would be going to the credit union, and they'd be looking to you to pay the balance. If they are just mailing you a check, they consider the car repairable. You were close to a total, but $5500/7500 is about 73%...and if the damage is mostly cosmetic, they would not try to total loss the car. It doesn't sound like you really have any structural damage.

If you got paid by the other person's carrier for your damage, you have no contract with that carrier. So essentially, yes - you could do what you wanted with the check. If it had been your collision coverage, it would have been a little different. Basically, if you're going to send the check to the credit union and then pay off the balance of the loan, just keep your fingers crossed that you don't get hit in the same spot again before you get that title in our hands. Because then you'd have all sorts of issues with prior damage, and then the car would likely be deemed a total loss.

When you pay off the loan, are you going to get rid of your collision coverage?

Thank you SO much for the help. EXACTLY what I wanted to hear!!!

I'm not sure, would you recommend me getting rid of it? Most likely, I will get rid of it. If someone hits me again in this car, I will just think it is time to get rid of it. LOL.

Basically, I will be driving a free car. It's a very nice car with an ugly trunk/back bumper. But it will be paid for. I'm praying that it will pass inspections.

Marilie, thanks again. I really appreciate it. I hope all is well!

No problem!

Fallon might be able to better answer the question about collision coverage. But at this point, if you're not going to fix it, no sense in having coverage to take care of damage if it gets hit again. That should knock down your policy premium a little bit.

Get that inspection and then go from there!

Whether or not you keep collision coverage is up to you. When my car was paid off, I canceled the collision, but I kept the comprehensive coverage, since it is cheap and I live in hurricane country.

Yep - comp will help you with flying objects, vandalism, and those pesky deer.

+1 to that... I lost a windshield driving down 75 just by getting a little stone kicked up. Comp covered the whole thing. Well worth the small extra fee.

OK. So I found someone to do the inspection. It "passed". LOL.

I took the check to the credit union and paid the loan down. I owe about $800 now.

I dropped collision and comprehensive. I drive the car about 10 miles RT per day. It is jacked up, but it gets me around and is basically a "free" car.

So I am ecstatic!!!

Have you checked your loan to see whether insurance is required? If it is and you've canceled it, they can place their own (expensive) insurance for you.

I have insurance. I just have liability instead of full coverage. Besides, the car will be paid off in 2 months anyway.

IIRC lenders don't typically care about liability, they care about comp & collision. Suppose you total the car and end up in the hospital with serious injuries. The lender doesn't care if you'll be able to pay your hospital bills, they just care about getting back the money that's owed to them. Even though it's only two months, I'd check your loan. You really don't want to end up paying for two months of their coverage if it's required.