How to Handle a Car Accident When Money Is Tight

If you’re involved in a car accident and you don’t have much money available to you, it’s natural to feel a sense of panic. Will you be forced to pay for damages? Will your insurance rates go up? How much is it going to cost to fix your car, and how long will you have to find an alternative method of transportation?

A collision does have the potential to undermine your budget and compromise everything you’re working for, but before you venture into full-blown meltdown territory, there are some things you should know—and strategies you should try.

What to Do Immediately After an Accident

In the moments following an accident, money shouldn’t be your main concern. Instead, you should focus on safety and on gathering evidence. If you can, get your car to a safe position first—both to avoid further damage or injury and to prevent future accidents from occurring in the same location. Once your car is out of the way, exit the vehicle and check for injuries on yourself, on your passengers, and on any other drivers and passengers involved in the collision.

Call emergency services if necessary, and definitely call the police. It’s a good idea to get a police report after an accident, no matter what. Once the authorities have been contacted and you’ve ensured the safety of everyone involved as best you can, you’ll want to collect evidence on the accident, including:

• Dash cam footage, if you have a dash cam on your vehicle.
• Photos. Take as many photos of your vehicle and the scene of the accident as possible.
• Notes. Try to get a voice recording of yourself recounting your version of events as they transpired. This will be more reliable evidence than your memory of the accident a few weeks after it happened.
• Eyewitness testimonies, especially if you aren’t able to get photo or video documentation of the scene. See if any other motorists witnessed what happened.

After that, you’ll want to exchange information with the other driver, including their name, address, and insurance information.

What to Do in the Days and Weeks Following an Accident

After the accident, you’ll want to take care of any medical services required to get you to full health; don’t avoid medical care just because you’re concerned about the costs. If the other driver was found at fault, you should be able to contact both insurance companies to resolve how you’re going to be compensated for damages.

In some cases, you may need to take legal action—either because the insurance company is not agreeing to a fair level of compensation or because the other driver refuses to take responsibility for the accident. A lawsuit may take a long time to resolve (i.e., weeks to months), but it can help ensure you’re compensated for all costs involved in the accident, including medical costs and lost work.

If you’re the one found at fault, your insurance company should take care of the damages outright, though you may have to pay up to your deductible for some of the damages. If you don’t have insurance or if the other party is taking more serious legal action against you, you may have bigger financial problems down the road.

Managing the Aftermath

If the situation demands you to pay a lump sum of money, whether it’s for auto repairs or legal fees, or if you’re going to face higher bills in the months to come, there are some strategies that can keep you on the right track for achieving your goals:

• Take public transportation (or ride a bike). Avoid renting a car unless an insurance company is paying for it, and if your car is totaled, consider not getting a new one. Riding your bike or taking public transportation is much cheaper, especially over the long term.
• Cut unnecessary expenses. Review your current budget and try to cut any unnecessary items you can. For example, you’re likely paying for at least one subscription that you don’t truly need, and you may be able to trim costs for some of your other monthly services.
• Take on a new job. Though not feasible for everyone, many people can handle new expenses by taking on a second job or a side gig to help pay for things.
• Build an emergency fund. After this financial hit, another sudden and significant expense could devastate your finances. It’s therefore in your best interest to build up an emergency fund as soon as possible, then start paying down your debts.

A car accident can be both stressful and difficult to manage financially, but it doesn’t have to be life-ending or goal-ending. Pay careful attention to the variables as you navigate your options post-accident, and optimize your choices to give yourself the most flexibility possible.