Hey Money Minder,
I need your advice on something and I’m hoping you can help me out.
A while back, my car got hit by a hail storm and now it has a bunch of cosmetic damage. It doesn’t affect how the car runs, but it’s pretty annoying to look at. I took it to a body shop and they said it would cost around $3500 to fix it. The good news is that they’re willing to cover my insurance deductible, which seems to be a common thing around here with hail damage.
So, I called my insurance company and they said they could either pay for the repairs or just give me the money it would cost to fix it. Now I’m trying to decide if I should just take the money and use it for something else instead of fixing the car.
I bought the car used about a year ago for around $22k, and I still owe about $24k on it. I don’t plan on selling it anytime soon, so I’m not too worried about the decrease in value from the hail damage.
Most of the dents are on the hood, and I’m thinking I could just use the money to fix the most noticeable ones later on. Plus, $3.5k would pretty much wipe out my high-interest credit card debt.
What do you think I should do, Money Minder?
Thanks for your help,
Pondering Decisions
Response from THE MONEY MINDER:
Hello There,
It sounds like you’re facing a tough decision regarding the hail damage on your car and how to best utilize the insurance payout. Firstly, it’s great that the body shop is offering to cover your insurance deductible, which is a common incentive in areas prone to hail storms. Considering the extent of the cosmetic damage and the fact that it doesn’t affect the functionality of your car, it’s understandable that you’re contemplating whether to use the insurance payout for repairs or for other purposes.
Given that the damage is mainly cosmetic and located on the hood, it might be practical to consider taking the insurance payout and using it to pay off high-interest credit card balances. Not only would this help alleviate financial stress by reducing debt, but it could also be a more beneficial use of the funds in the long run. Since you don’t anticipate selling your car in the near future, the decrease in value due to hail damage may not be a pressing concern for you. You could then assess getting the most noticeable dents repaired at a later point if you still feel inclined to do so.
Ultimately, the decision depends on your priorities and financial goals. If paying off credit card debt would bring you more peace of mind and financial stability, it might be the most practical choice at this time. Remember that taking care of your financial health is just as important as maintaining your car’s appearance.
Best of luck in making your decision, and feel free to reach out if you need any further advice or guidance on financial matters.
Farewell from THE MONEY MINDER.
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