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A third party damaged my car but doesn't want to go through insurance - can I keep the cash?

Just because you have car insurance, you’re not obliged to use it in every situation. If you have an accident with a third party and they want to settle in cash, this is perfectly legal. However, there are a few things you need to consider.

Firstly, you will need to tell your insurance company of the collision regardless of whether or not you are making a claim. If you neglect to inform them, then you risk voiding your insurance.

It’s also important to take into account the better service you will get going through your insurer. If you claim, you should get a full inspection of the vehicle with any damage taken care of. Sorting out repairs yourself with money from a third party might not address all of the problems. This could result in more serious issues down the line and an unnecessary headache for you.

Accepting cash from a third party in lieu of a claim might make sense for smaller collisions. Often, smaller, cosmetic damages are not worth claiming on when you take into account the no claims bonus you would lose plus the excess you need to pay.

*51% of consumers could save £518.14 on their Car Insurance. The saving was calculated by comparing the cheapest price found with the average of the next five cheapest prices quoted by insurance providers on Seopa Ltd’s insurance comparison website. This is based on representative cost savings from June 2025 data. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.

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