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Hail Damaged Cars: Are They Worth It?
●February 25, 2021●4 minute read
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Purchasing a hail damaged car may seem like an easy way to save money. A few dents may seem like no big deal at surface-value; however, there are many other factors to consider before you decide to buy a hail damaged car.
Will the car still be under warranty?
If you are purchasing a near-new, hail damaged vehicle, will the car still be covered by the manufacturer’s original warranty? The answer to this question can get complicated and can vary between dealerships.
The question of when the warranty starts is raised: is it insured from when the hail damage occurred, when the insurer paid out the dealership, or when it was sold to you? This is if it is covered by the warranty at all. With many manufacturers offering warranties of up to 7 years, it is important to consider whether it is worth giving this up just to save on the initial purchase price.
Rust can cause major issues
Hail damage can be so impactful that it breaks the surface of the paint. If this is the case, you may not be able to assess the full extent of the damage just by looking at the car on the outside. If rust has affected what is under what appears to be a sealed surface, there is a good chance that even if you maintain the manufacturer warranty, you will not be covered for rust damages.
You may not be able to get comprehensive insurance
Depending on the insurer, you may only be offered third-party, fire and theft cover. This is because some insurers will not offer cover to cars with pre-existing damage.
Car insurance companies will not cover you for hail damage if your car is already damaged. Even if more damage is incurred after you purchase it, insurers will not take the risk of insuring your vehicle with existing hail damage.
Financing it may become difficult
Many lenders require that you have fully comprehensive insurance for the duration of your loan term. If you are unable to obtain this, you may not be able to use car loan finance. This leaves the only other option as cash, which may not be realistic.
Some financial institutions, particularly traditional lenders like banks and credit unions, may not lend money to buy a car that has existing damage; this includes hail damage.
How much cheaper is a hail damaged car?
With the idea behind purchasing a hail damaged car being to save money, it is important to know just how much cheaper a hail damaged vehicle is than one that is undamaged and brand new. Below is an example using the Hyundai Elantra to clearly illustrate the difference:
|Hail damaged vehicle
||Brand new vehicle in perfect condition
- 2018 build
- 2018 model
- $23,990 driveaway
- 2019 build
- 2019 model
- $25,365 driveaway
So, for a difference of $1,375, you could have a brand new car with a guaranteed warranty and no existing damage.
Can you fix a hail damaged car?
There are three ways to conduct hail repairs.
You can replace whole panels and have them painted to match the rest of the car, but if the car is older or is metallic/pearlescent in colour, the paint will need to be blended.
Traditional panel beating involved hammering out the dents and a thin layer of filling being applied. It will look fine at first but will develop cracks, crows-feet and other imperfections as it gets older.
Lastly, you can use Paintless Dent Removal (PDR) in which a technician can find a way behind the damaged panel and press out the damage.
In each of these techniques, the costs will vary depending on the extent of hail damage. It may not be worth fixing the hail damage if it is too severe, as you may not save any money and would be better off purchasing a brand new car instead.
Jacaranda Finance car loans
Jacaranda Finance offers car loans from $5,000 to $35,000 for both new and used cars. While we cannot offer car loans for hail-damaged cars, we can offer refinance options if you already have an existing loan with another lender.
We offer flexible repayment terms, from 1 to 4 years, so you can repay your loan at your own pace, in your own time. We are a completely online lender, so you won’t need to fill out piles of paperwork or spend time in a branch. It could take less than 8 minutes to apply and you could have a same day loan outcome (if you apply within our business hours).
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Written by Jacaranda Team