How Would You Pay for your Collision Deductible

[greeryan]

Hi Everyone,

I just have a question for everyone. Right now the average American has only $620 in their Checking Account and Negative Savings. If you or someone on your insurance policy had an at fault accident today How would you pay for your Collision Deductible?

Which option would you choose?

1) Use a high Interest Credit Card or Short Term loan

2) Beg for money From a Family member or Friend

3) Leave your car broken

4) Use what little money you have and try to make ends meet


I have been asking this question to a lot of people and wanted to see what people in other areas of the USA would do.

Thanks for letting me be part of the forum

Ryan

[kork13]

Hi, welcome to the forums. One thing you'll find around here, however, is that the factoid below applies to surprisingly few members on these boards.

Originally Posted by greeryan

I just have a question for everyone. Right now the average American has only $620 in their Checking Account and Negative Savings.

Myself, I would have to choose "Option 5: Use some of my emergency savings to pay the deductible." That is exactly the sort of expense that I've got the money saved for. Honestly, I can't imagine the frustration of having a significant, unintended expense that I cannot pay for... I've never had it happen, and I'm doing everything I can to make sure it never does.

Assuming that I did fit your description, and really did have zero savings, I would probably pay as much of it as possible from the money I had, and if necessary, borrow any remainder from family. In most cases, the car is a necessity for people to get to work, so you can't simply ignore it. Also, to somehow put it on a credit card or pay it with a loan only proliferates the problem, and it's going to bite you in the butt even harder later on down the road.

[disneysteve]

I'd pay out of my savings, not one of your choices.

[Joan.of.the.Arch]

What a loaded question. I expected to see a link to an insurance company at the end of the post, just so I could be informed that I really could and should have low cost collision insurance.

Where'd you get this info about $620 in checking? I've never read that number. How old is your info on "negative savings" (debt)? Have you not been paying attention to the personal economic news that USAmericans have turned their savings rate back into the positive numbers?

And why only those choices? Even if I were in debt with no savings, I might have other options. For example, why might I choose to put new debt on a high interest rate card? Perhaps I would put it on a moderate interest rate card. Perhaps I would leave the car in the garage for a few months while I save for repairs and in the meantime drive my other car. Maybe my brother and I would do the repairs on the weekends and in return I'd help him build the rock wall around his terraced back yard.

I get your point that you would like to see people think about how unexpected expense come up that they should make provision for ahead of time. Good idea, I agree!

Sometimes on this forum I think we act --and I include myself in this-- as though the average person is irresponsible with their money. In reality I think most people do okay. Those who habitually overspend, buy too much house or finance it in indefensible ways, drive their cars uninsured, fail to pay their utility bills, etcetera are the minority. People who think about the future, live within their means, take vacations only when they can afford it, etc are the majority. That doesn't mean that all unexpected misfortunes can be covered at all times, but most people really are always looking to be prepared, I believe. Maybe sometimes they get caught having to make-do or put off a goal while they work on an unplanned expense, but most people are fairly responsible.

[maat55]

#1

If I were in that boat. But I would quickly sell unnecessary items, cut my budget to the bone(cells, cable,eating out, dingdongs etc.), save an emergency fund, pronto.

[tripods68]

None of the above. I'd pay using my Emergency Fund.

[Cassandra]

If I were in that position, I would pay by a combination of asking money from family and selling whatever I needed to to get the money.

But, like just about everyone else who has posted, in reality I would just take that money out of my EF. That is why I have it.

[disneysteve]

Originally Posted by Joan.of.the.Arch

What a loaded question. I expected to see a link to an insurance company at the end of the post

Same here. I immediately thought this was spam since it was a new poster, but decided to answer anyway.

[cooliemae]

Personally, I'd put the deductible on my credit card, thus earning rewards, then PIF at the end of month out of savings.

[kork13]

Originally Posted by cooliemae

Personally, I'd put the deductible on my credit card, thus earning rewards, then PIF at the end of month out of savings.

I've never yet had to file an insurance claim (knock on wood), but this surprises me... can you actually pay for stuff like that by credit card? Some things (like insurance deductibles, utilities, donations, and so on) all seem to be things that wouldn't accept CC payment (nor have I personally seen it as an option). I was happily surprised when I found out that I can put my rent on my CC, but thought it was a rare exception. I mean, it's great for those who do so responsibly, but if you can't pay it off quickly, that quickly becomes dangerous (financially)...

[disneysteve]

Originally Posted by kork13

I've never yet had to file an insurance claim (knock on wood), but this surprises me... can you actually pay for stuff like that by credit card? Some things (like insurance deductibles, utilities, donations, and so on) all seem to be things that wouldn't accept CC payment (nor have I personally seen it as an option). I was happily surprised when I found out that I can put my rent on my CC, but thought it was a rare exception. I mean, it's great for those who do so responsibly, but if you can't pay it off quickly, that quickly becomes dangerous (financially).

You don't pay your auto insurance deductible to the insurance company. You pay it to the body shop doing the repairs. Of course, they take CC. Besides, I pay my auto insurance premiums by CC anyway. As for utilities, we pay the phone, cell phone, cable and alarm company by CC. We also make most donations by CC.

[SnoopyCool]

Originally Posted by disneysteve

As for utilities, we pay the phone, cell phone, cable and alarm company by CC. We also make most donations by CC.

Do those companies have a surcharge to use a CC to pay? I tried to pay our electric by CC and there was a $4 charge to do so. Obviously I didn't go that route.

I'll have to look at the phone to see if we can pay by CC for free.

[disneysteve]

Originally Posted by SnoopyCool

Do those companies have a surcharge to use a CC to pay? I tried to pay our electric by CC and there was a $4 charge to do so. Obviously I didn't go that route.

I'll have to look at the phone to see if we can pay by CC for free.

No. I don't pay any surcharges for using a CC. Our local municipal taxes charge a fee for CC payments so I send them a check.

[isthisused]

Originally Posted by greeryan

Hi Everyone,

I just have a question for everyone. Right now the average American has only $620 in their Checking Account and Negative Savings. If you or someone on your insurance policy had an at fault accident today How would you pay for your Collision Deductible?

Which option would you choose?

1) Use a high Interest Credit Card or Short Term loan

2) Beg for money From a Family member or Friend

3) Leave your car broken

4) Use what little money you have and try to make ends meet


I have been asking this question to a lot of people and wanted to see what people in other areas of the USA would do.

Thanks for letting me be part of the forum

Ryan

I don’t fit your scenario, my wife and I have built a good emergency fund and we have a credit card that has 8% interest we could use, but we would probably put it on our heloc.

[Goldy1]

ditto, I have to send a check for local taxes. It would depend on my situation (if I was in those shoes). Maybe borrow half the money from family? charge half. If I charged it, I would try to get it paid off in a payment or two, not let it linger on.

[creditcardfree]

Doesn't apply. I'd use our EF, that's exactly what it is there for!! Because we have an EF, we chose high deductibles for auto and home insurance, thus lowering our premiums. Works for us.

[adam_c]

Shop around and find a better deal. Depending on your insurance company, some will require you to use a preferred vendor to do the repairs, others will simply estimate your damage and write you a check for the estimate less your deductible.

I damaged my car and took it to a friend who does body work on the side. He said expect a $2,500 quote from a body shop, but he could do it for $1700.

My adjuster called and asked if I had any idea what the damage would be, I told him $2,500. We have a $1,000 deductible. He wrote an estimate for $3,500, applied the $1,000 deductible and sent me a check for $2,500.

[maat55]

Originally Posted by SnoopyCool

Do those companies have a surcharge to use a CC to pay? I tried to pay our electric by CC and there was a $4 charge to do so. Obviously I didn't go that route.

I'll have to look at the phone to see if we can pay by CC for free.

You have to check with them individually. I pay my home gas, cell, telephone, internet and cable by auto draft to my CC. I pay my electric by checking account auto draft because they charge for CC.

[greeryan]

Wow what a great response, I am glad to see that so many people have already set up a reserve account, those on this forum are definitely the minority when it comes to financial preparedness.

Here is a fun savings fact for you if everyone in the USA that had a Collision Deductible of $500 or less raised it to $1000, It would free up $60,000,000,000 a year in savings to the american public!

Now that is what I call a stimulus package!

lets keep this thread moving!

thanks Ryan

[disneysteve]

Originally Posted by adam_c

My adjuster called and asked if I had any idea what the damage would be, I told him $2,500. We have a $1,000 deductible. He wrote an estimate for $3,500, applied the $1,000 deductible and sent me a check for $2,500.

Are you saying the adjuster based his estimate purely on your word and that he padded that estimate by $1,000? Did the adjuster examine the car? Did he require a written estimate from the body shop? What if you had told him the repairs would be $3,500? Would he have made the claim for $4,500?