Buying a New Car After an Accident
A car accident is traumatic no matter what—even if it was a small one. However, a large car wreck that has done major damage to your car is worse, as you now have to deal with a car that is a total loss.
Take a deep breath and know that this is a marathon—not a sprint. Nothing is going to happen overnight, so just be thankful that you don’t have any serious physical issues associated with the accident. Take it step-by-step and all will be okay. Wondering what the process will look like? Read on for what you need to know when buying a new car after an accident.
Understand Your Insurance
Your car has been declared, “totaled” by insurance. Now what? First, you need to understand how the insurance adjuster will assess the value of the car that was in the accident. He will evaluate the condition of the body of your car, the interior, and tires. He’ll take note of the mileage and assess any parts that you’ve added to your car (receipts would be helpful).
The adjuster will then compare it to other models of that car that are for sale in the area. He will use these assessments to come up with the ACV, or Actual Cash Value. You can also collect the cost of the sales tax if you live in one of the 34 states that allow for this. Know that you can challenge this value and can recommend he compare your car to another car for sale in your area.
Find Out if Insurance Will Get You a New Car
This all depends on your car and type of coverage. As this Insurance.com article notes, “If your car is very new—say, less than three months old—most major insurance companies will replace it with a new car. But beyond that point, some companies offer guaranteed replacement coverage at an extra cost, so you don’t have to worry about how much you’ll be paid—it will cover a new car.”
The article goes on to point out that if you don’t have this kind of coverage, your insurance company is still required to “make you whole” however this is defined in your policy. In other words, your company will pay you the ACV of your car minus the deductible. Because there is often a large amount still owed to the lender, many people add gap insurance. This helps you pay off the balance due to the lender.
Know How to Negotiate
Once you have the money from insurance, it’s time to buy the car. This might be something you hadn’t counted on doing any time soon, and you might even be a bit rusty when it comes to negotiation. Knowing what you can afford should be fairly straightforward, as it will likely be what insurance has paid you (unless you wanted to use your savings to go for a better car).
Don’t give the car salesperson the monthly amount you want to pay but, rather, a lump sum. That’s because some car dealerships will use this monthly amount to manipulate the numbers, making your loan longer to get more money out of you.
Bring in price quotes from competitors for leverage. Know your credit score beforehand, as a dishonest salesperson might lie to you about your score, telling you don’t qualify for a certain loan. And know when to walk away, as this is a legitimate negotiation technique that has paid off for many car buyers. Ultimately, you want to make sure you’re going to a dealership with a good reputation. If you’re looking for a new Audi in Orlando, do your due diligence on dealerships in that area.
Shop at the End of the Month
Whether you feel like you got the right amount for your car or not when it comes to the ACV, you want to get the most bang for your buck. And because most dealerships are working to meet their numbers by the end of the month, you have a better chance at getting a good deal.
Pro tip: if you get in an accident don’t buy your new car while you’re overseas. The cost of shipping your new vehicle back home after a festival or vacation may cost you more than the vehicle is worth.
You didn’t ask for this car accident but there’s no getting around the aftermath. As long as you are prepared for buying a new car after the accident by working through these details, you’ll be on the road again soon enough—and hopefully, in a car you love.