Save Big Buying a New Car with Hail Damage


Everybody loves having a new car.  For one thing, they are new and shiny and pretty with no cosmetic flaws.  They have no wear and tear on them. With every part brand new, you can expect to drive your car several years before it starts to break down.

The problem with new cars of course is the cost. Since everybody wants to have a pretty new car, new cars sell for quite a premium over used cars. But what about new cars with hail damage?

Since they aren’t perfect and pretty anymore, they lose much of their appeal to new car buyers, and because nobody wants a new car that isn’t pretty, car dealers are sometimes willing to give large discounts to people willing to buy new cars with hail damage.

How much can you save?

Back in 2008, a large storm with baseball-sized hail hit my hometown, and a couple of car dealerships on the West side of town got the very worst of it.  Their entire inventory was severely damaged with huge dents in all their cars.  The dealerships had no choice but to offer big discounts on their cars, and my wife pounced on the deal.

Having a reliable car was more important to my wife than having a pretty car with no flaws, so she got a heck of a good deal.  A new vehicle that normally cost $23,000 she was able to snag for $17,000.  That’s a discount of $6,000, or over 25%.

The downside was she had to drive a car that was pretty rough looking.  She also had to answer questions about what had happened to her car wherever she went.  Several years later, when she was able to save up a little extra money, she had some — but not all — of the damage repaired. 

The worst of the damage was to her hood, so she had the hood replaced completely.  The roof was also badly damaged, but because that isn’t as visible as the hood she left the roof all dented up.  Other parts of the car had smaller dents, but she decided she could live with those.  She also had the body shop apply touch up paint to dents that were big enough the paint had cracked inside of them to prevent rust from developing. 

After these repairs the car still wasn’t as nice looking as your typical brand new car, but it was a considerable improvement.  These repairs cost her about $800, so she still saved over $5,000 over the normal price of a new car.

Problems with rust

Sure, you can save money buying a car with hail damage, but there are also several potential problems you should consider.

First of all, there is the potential for rust.  Not only is rust ugly, but it will eventually eat away more and more of your car until the damage is severe.  Look closely at the hail dents and search for cracked or missing paint on the surface of the car.  If you see any such cracks in the paint you should have touch-up paint applied to those dents to prevent any future rust damage.


The financial downside of a hail damaged car

You should consider the diminished value of your vehicle.  Just like you wanted a big discount to buy a car with hail damage, so will any future buyers of the used car you want to sell.  This won’t be a big deal if you are going to keep your car for the majority of the car’s life because when you are selling a very old car buyers will be more interested in getting a good deal than they will be worried about some cosmetic damage.

If you plan on driving your car for just a few years before you sell it though, then diminished value will be a significant concern.  You should figure that when you go to sell your car you will get several thousand less than you would have if you were selling a car without hail damage.

Getting a loan on a hail damaged car may also be more difficult than normal.  Because the collateral will be worth less than normal, financial institutions may be hesitant to lend money for a car with hail damage.  You should visit with your lender before you visit the dealership to see if they will be able to make you an auto loan.

Insurance companies may also be concerned about insuring a car that is already damaged so you should visit with your agent to see what their policy is.

Problems with the warranty

A car with hail damage may not come with the standard factory warranty as other new cars do. Ask the dealer what the warranty will be on your new car.  In my wife’s case, there was no standard manufacturer warranty, but the dealership gave her their own warranty for 10 years or 100,000 miles, which was the equivalent of the manufacturer’s warranty.  (Editor’s note: Be sure any warrant you consider is the manufacturer’s own, not through a third party.)

The downside to having the warranty through the dealership is that my wife can only take her car in for service at that one dealership , while most buyers of new cars can take their car in for service at any dealership in the country during the warranty period.


So while your car may not look pretty, and there are plenty of downsides, the bottom line is that buying a new car with hail damage can be a great deal.  So what do you think?  Next time a hail storm hits your city, is it going to be time for you to do a little car shopping?

About the author: Andy Prescott is the owner of, where he attempts to put dents in your spending with his weekly articles on cutting costs.

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