Should you repair or replace your vehicle after a collision?

vehicle collision

After a wreck, you’re entitled to have your car repaired or replaced. What should you do?

Unfortunately, this decision is up to the insurance company. If they choose to repair your vehicle after a collision, and they do it to industry standards, then that’s what you’re entitled to – and that’s all they are obligated to do.

If you’re in that situation, you’re entitled to diminished value. Now that your car is wrecked it’s worth less money because of that. You have to hire an expert to prove up diminished value damages.

If your car sustained serious damage, most of the time insurance companies are going to elect to total it. That means they’ll owe you fair market value for your vehicle, not Kelly’s blue book value, not NADA value, but fair market value.

You need to go to the sales market and do some research to find your fair market value. Auto Trader and Cars.com are good places to reference. Find out what like vehicles with similar mileage and options are selling for; that is your fair market value.

If you owe more on your vehicle than it’s worth, then you’re upside down, there’s a gap. Texas offers GAP insurance. That’s usually done when you’re financing your automobile.

If you don’t have gap insurance and you’re upside down, I’ve been able to work with clients to find creative options where they are still able to buy a new vehicle and then pay-off the amount they’re upside after their case is settled.

This is done by:

  1. buying a new vehicle and rolling the negative debt into the new financing.
  2. Then when your motor vehicle collision case settles, which will include your diminished value compensation, you can use that money to pay down your negative equity.
  3. Then you can refinance the new automobile to get the payment lowered.

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Mullen & Mullen Law Firm
1825 Market Center Blvd #200
Dallas, TX 75207
(214) 747-5240
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