Hail Damage Sales, Are They Really Worth It?
When hailstorms hit, imagine the carnage they cause at any dealerships that are unlucky enough to be in their path!
With hailstorms hitting Sydney and Melbourne in December last year, there have been a large number of cars showing up at dealerships for prices that seem too good to be true … until you see all the hail damage.
When cars are hail damaged, the dealerships will usually make a mass claim on all the cars and be paid out for at least their cost price. Then the insurance company is looking to recover as much as possible from the claims, so they look to move as many cars as possible via the most efficient method available when we’re talking such large volumes … auction.
Some dealers have a real appetite for hail damaged cars, so they’re likely to snap up as many as possible at the auctions in order to host a large “Hail Damage Clearance Sale”. Some might see this as a great opportunity to snap up their dream-car for a bargain price, but it could quickly turn into a nightmare! Let’s have a look at what you need to be aware of to keep your head above water before you dive in the deep end of the “owning a hail damaged car” pool.
Is the car going to be covered by the manufacturer’s original warranty? Even if it is, what date do they count as the start date? Was it when the hail damage occurred? When the insurer paid out the dealership? Or when it is sold to you? With some manufacturers offering 5 and 7 year warranties now, that’s a lot of mechanical and electrical “peace of mind” to give up!
Even if you are lucky enough to retain the manufacturer’s warranty, there’s a good chance that you won’t be covered for rust. Hail damage can be so substantial as to completely break the surface of the paint. You may not be able to see the damage to the paint’s protective layer with the naked eye, but it can soon turn to disaster as the rust takes hold under what appears to be a sealed surface.
Can you get insurance to cover your new purchase? Obviously, an insurance company won’t insure you against hail damage if the car is already damaged! And don’t think that they’ll cover you for new hail damage but not the existing hail damage, they simply won’t take the risk. In fact, most insurers will require that the car has no pre-existing damage at all.
And before you think of “just not telling them about the hail damage”, it’s important to remember that if you fail to disclose any and all relevant information to your insurer, then they often reserve the right to not pay any claims and keep the money you paid for your premium!
Most forms of finance on a car will stipulate that you are required to maintain full comprehensive insurance for the duration of the finance term. So if you aren’t able to get comprehensive insurance, then you simply won’t be able to get finance to buy the car meaning your only option is cash.
There goes the deposit you were saving for your first home, that overseas holiday or engagement ring for your girlfriend. At the very least, it might mean re-drawing on your home loan and running the risk of owing money on a car that might get stolen or written off with no insurance to cover your debt.
How Much Cheaper Are Hail Damaged Cars Anyway?
“Buying Cheaper” is often thought to be “Buying Smarter” but when you’re buying a hail damaged car, for all the reasons listed above you run a very real risk of “Buying Regret”. It could very well end up being the most expensive money you’ve ever saved.
To be quite frank, we don’t believe that hail damaged cars are anywhere near cheap enough to even consider buying them over a brand new car that is not old stock but is the most recent model in perfect condition with full warranty.
Instead, we can get you an amazing deal on a brand new car without you have to leave your seat! Take the Hyundai Elantra as an example of what we’re talking about …
- Hail Damaged
- 2018 Build
- 2018 Model Year
- $23,990 driveaway
- Brand New Perfect Condition
- 2019 Build
- 2019 Model Year
- $25,365 driveaway – $23,059 excl GST
So for only $1,375 more, you have a brand new car where you’re the first owner and complete peace of mind with no doubt as to whether Hyundai’s 5 year warranty will cover your car in every regard.
Actually, the story gets even better when you buy it with a Novated Lease. Because we can claim back the GST for you, that means you’re financing 10% less on the purchase price … effectively you’re only paying $23,059 for the brand new car on a novated lease, that’s over $931 cheaper than the hail damaged old stock model!!
If you would like to find out more about ProNovate’s new car pricing and discounts, give us a call on 1300 000 PRO (776) or click here to submit an enquiry