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The Financial Fallout from the Wreck


So we had a wreck. And now I have to deal with the aftermath…The facts are:

  • The balance due on my car loan is $4,400.
  • Insurance will pay out $6,241 for my totaled car.
  • We have two other operational cars between the 3 drivers at home, with no balances due on them.
  • Because I work from home and Princess volleyball season is over, there are no regular driving commitments for me other than getting Princess to school everyday at 7am. (She rides a bus home.)
  • The twins don’t ever leave the house before 7:30am and that depends on their work schedules.
  • Sea Cadet leaves for his Americorps FEMA commitment at the end of July. And he will not be taking his car.
  • Oh, and we live in a tiny town and have 2 operational bikes.

I’m betting you can get where I’m going with this.

At this point, after over a week to think about it as I awaited word of the fate of my wrecked car, I think the best financial decision for this time is to NOT BUY another car. At least right away. This will eliminate the monthly car payment for a while as well as reduce our auto insurance costs.

Thoughts on this plan? Have I missed anything?

Down the road, there are a several of factors I will have to consider:

  • Princess will return to volleyball practice for the fall season at some point. Depending on the twins’ school and work schedule, it may become necessary for me to have a car. But I might be able to borrow my grandmother’s car, again depending on the schedule.
  • Our original plan was to sell one of the twins’ cars when Sea Cadet left (year long commitment) and put that money away towards the purchase of another car when he returned. While he has already offered to let me keep his car…well, I don’t want to mess up his plan.
  • It looks like my boyfriend may be moving here from Florida in the next couple of months, and this will be a null issue as we have already talked about being able to live with one car as a long term plan.
  • Princess will be driving in a year…yikes! And I had hoped to save enough money to buy her a car next year. (I bought the twins’ first car for $1,900 and cars are cheaper here.)

As you can see there are lots of variables and I’m really trying to make the best financial decision here. Please give me your feedback…good, bad and other!




  • Reply Angie |

    I think that’s an awesome idea! While you are trialing a one-car household, I’d recommend continuing to “pay” your car payment towards a savings fund. That way, if it turns out in a few months it isn’t working and you do need to buy a car, you will already have a hefty amount saved to possibly buy one in cash. Put any excess from the insurance payout in this account too.

    Aren’t you glad the extra payments on the car loan paid off? The accident would have been even worse if you were upside down and the payout didn’t cover the loan.

    Glad everyone is alright.

    • Reply Cwaltz |

      Yep. I was thinking the same thing. Since the car loan will be getting paid off that clears $400 a month to go towards car replacement. The insurance company is paying out essentially a $1859 down payment. If Hope were able to hold out for a year she could have $6659 to place on a car replacement. That could be a decent sized down payment on a car.

  • Reply Angie |

    Another thought…

    I would look into having all drivers in your household take a defensive driving course. Call your insurance and see if there is one that will also discount your premiums. It will cost a little bit of money upfront. But I think it would be a good experience and hopefully balance some of the insurance increase.

  • Reply Lisa |

    I think you’ve made a wise decision. The pieces are in place for you, and that is another blessing. Use what you have available, don’t incur additional debt, and see where you are when you need to make some decisions about adding another vehicle. When does Princess start driving? She doesn’t need her own transport until school/volleyball, though, right? You can work it out, multiple drivers with one vehicle…two is even better. Go, Hope!

  • Reply Laura |

    I think holding off on buying a car is a good idea. Get some time to get back on your feet.

  • Reply Reen |

    Glad the numbers are in your favor. Is the payout before or after your deductible? How much is your deductible?

  • Reply Walnut |

    Definitely use bicycles and Sea Cadets car. I don’t recall if he bought the car himself, but if he did, then buy it from him for KBB pricing. There’s no point in selling his car and then buying a different one.

  • Reply Megan |

    I think it makes perfect sense to try out for a while. It may that you don’t end up needing another car or it may be that things change in 6 months. But either way you are eliminating some expenses for a while. It is a win even if this choice isn’t a forever choice.

  • Reply Constance Farris |

    I think it’s a great idea to continue to save your car payments toward a new car and to buy Sea Cadet’s car from him for the time being. I’d also give a call to your insurance company to see what your premiums are going to do with two accidents on your driving record. It may be that there is little or no impact; it may be that your rates will increase 25-50%. It will depend on how the insurer looks at fault. Unfortunately, sometimes when there is no second car to blame, (ie – the car that caused you to wreck was able to drive off), they will blame you and your rates will suffer. Just something to find out about.

  • Reply andree |

    take the car payment, and stick it into a no fee savings account. Sounds like it’s likely you’ll need another car not too far in the future. build up your funds so you have cash available when you next need a vehicle. And stick the extra money from insurance into that same account.

  • Reply Katie |

    This is a solid plan. I’ll echo what others have said and save the car payment/difference in insurance so you have a decent down payment when you need to buy the next car.

  • Reply Kate |

    I think this sounds like a great plan. I’d love to see a debt update when you have time. One thought, though, is that I wouldn’t buy a car for Princess any time soon. You just can’t afford it.

  • Reply Cara |

    This all sounds great! Definitely look into your current insurance coverage for any potential savings. Maybe hold onto Sea Cadet’s car in case (emergencies, maybe the one-car thing doesn’t pan out…), but ask your insurance company about a discount since you won’t be driving it regularly and miles will be minimal.

    And shop your auto insurance – you can change companies anytime. Loyalty doesn’t always mean savings anymore 🙁

    Good luck!!

So, what do you think ?