Car Finance: Collisions and the Costs — Repair or Write-off

You find yourself involved in an accident; this is not how you imagined your day would go. It is dreadful, confusing, and you are afraid. But thankfully no one is injured physically.

This the best-case scenario when cars collide, but there will be damages of some kind, barring an absolute miracle. In this scenario, there are damages to your vehicle and one other. No other property sustained any damages in the accident.

Yes, accidents happen, and even though legally you might be held responsible, an accident is unintentional. Yes, you might feel guilty for having that involuntary break in your attention, your mind having wandered due to the stress of being late, being tired from a lack of sleep, or it’s been a really hard day and your brain is ‘fried’. 

Or, you might not be deemed responsible and another party involved in the traffic collision made liable. This will relieve your conscience, but it does not change the immediate circumstances, being that you were just in a car accident.

Assuming that no one is injured in this unfortunate event, and assuming said damages above, there will be insurance claims involved, oh yes.


Third-party car insurance is the legal minimum requirement in the UK to put a vehicle legally out on the road which will cover injury or damage for any person, animal, vehicle or other property involved in the accident. But the minimum standard will not cover you if you are responsible for the accident.

Comprehensive car insurance will cover you whether you are at fault or not, and it will cover any third-party claimants as well. It may seem like it will be the more expensive coverage, but if you do your homework and shop around, you might find that it is the less risky option, therefore the less expensive.

Guaranteed Asset Protection (GAP) insurance is an add-on that will usually be sold to you by your car finance broker when you purchase a vehicle. Hopefully, you splurged on this because it can really help you out in a predicament.


You are not injured physically, and that is the best news, but you find that are injured financially. Your brain starts to panic when you realise that you may not have a car for a little while or the foreseeable future, but your whole life seems to rely on owning a road-worthy car to get around. How long is it going to take to get back on the road?

What if you have just purchased your vehicle on car finance? You have only made 6 months of payments and you still have 2 and 1/2 years left on your contract? What is this accident going to cost you?

Write-off or Repair

First you will have to wait for the determination of the insurance investigation. They will need to assess the damages against the current car valuation to decide if your car is economically salvageable as a repair. If it is not, then your car will be a write-off. 

But you have grown attached to your car in the last 6 months. It has become more than just a way to get from here to there. No, she is a friend, well on her way to be classed as family. Her name is Gerta, and you are very fond of her.

If ‘Gerta’ is an insurance-classed ‘write-off’, there may be a glimmer of hope. There is something called — well, it is called car insurance write-off categories — and depending on how bad the damages are, the car will be classified (A, B, S, N, . You might be able to save Gerta from the graveyard/scrapyard). You will, of course, need to know how to or know someone who can repair her on the cheap to make it worth your while, unless you love her that much.

Or is Gerta a repair job? If so, you might be without her for a while, and this might be terribly inconvenient with organising your life around public transport, carpooling and other lifestyle strife.


Perhaps a more serious and potentially debilitating lifestyle trauma is more likely to be that of exorbitant, unbudgeted costs and an empty wallet. Remembering that the ink on Gerta’s ‘adoption’ is only 6 months old, and car adoptions are costly, what are you now up against?

  • Insurance excess
  • Inflated insurance premiums
  • Continuing car loan payments
  • Potential new car purchase and contractual terms
  • The remaining balance of the damaged car, a.k.a. Gerta
  • Car depreciation deficit created by insurance valuation and settlement
  • Public transport costs

In Conclusion

Based on the insurance outcome (yes, insurance again!), you might have to lay Gerta to rest and purchase a new vehicle, which would be a hefty financial burden, as noted above. If you disagree with or wish to query the insurance settlement, you should consult your policy and the company to discuss your concerns.

Also, speak with your finance company to see what your options are based on your current situation, layout your worries, questions, possible solutions and all on the proverbial table. You might find that they will be very understanding of your plight, knowledgeable of the tricks of the industry, and offer you helpful, excellent service (FCA regulation) to get you back on the road with a new ‘ride’ (maybe just don’t name your car for a while if its too painful) as soon as possible. Happy trails.

Editorial Team

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