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.

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]

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]

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]

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]

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]

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]

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.