Why You Should Think Twice About Buying a Car with Hail Damage
In the ACT, new car sales have remained remarkably resilient amid the COVID-19 lockdown. One of the driving forces behind the steady showing has been the significant hail storms that damaged a large amount of cars earlier in the year.
Since then, new car sales have been up year-on-year throughout February, March and April in the nation’s capital. Such an event raises an interesting consideration for many – that is, whether it is a wise decision to buy a car with hail damage. While the prospect of saving thousands in dollars can be appealing, there are definitely troubles that you can run into.
What issues come with hail-damaged cars?
In the event that an insured vehicle costs more to repair than the value of the car itself, it will be written off by the insurer. The reality is, if the economics don’t stack up, then the car, even if in otherwise functional state, will face obstacles making it back onto the road.
This is because the car will be added to the government’s list of vehicles deemed repairable. While this is better than it being declared a statutory write-off, the process still requires a myriad of inspections, certifications, paperwork and hoops to jump through. Importantly, some lenders won’t provide money for a hail-damaged car.
Assuming you are fortunate to receive loan approval, in terms of insurance coverage thereafter, you will also need to declare the damage as part of the vehicle’s existing condition. In some instances, insurers won’t provide coverage for cars with pre-existing damage, or will extend limited coverage such as third-party, fire and theft.
Arguably the biggest hurdle you’ll likely face in terms of buying a car with hail damage is down the line when it comes time to part ways with the car. If it hasn’t been repaired, you are going to face an almighty struggle to find a buyer who is prepared to purchase the car.
On the other hand, fork out money for repairs and you probably won’t see any return at all. This of course will depend on which route you pursue in terms of repairing the damage, be it panel replacement, panel beating or paintless dent removal. This sort of work is also highly technical, so not only is it costly but you need to find the ‘right’ person for the job.
Final thoughts
At the end of all this, it’s worth asking yourself – do the up-front savings justify the inconvenience and burden later on? With a wide range of dealers currently trying to clear brand new stock in perfect condition at large discounts, don’t be fooled by the promise of additional savings from hail-damaged cars in the second-hand market.
Level 2, 9 Help Street