This lady drove into my parked Passat GLX 4Motion and shoved it into two
other cars. KBB is $16,000 for the 2000 model (~60K miles) – quite
admirable resale value. The mechanic isn't sure yet if he can come in
under that for the repair.

If it turns out that I can have it either way, what would you recommend?
Take the money or have it repaired?

Apart from an annoying number of problems in the first weeks of
ownership, I have only had the water pump fail and the dreaded flooding
via blocked sunroof tubes - otherwise, the car has been fine and it
drives just great. I have been using synthetic oil and drive
moderately, pushing the engine rarely and only when it's warm. To me,
the car seems worth more than the 16K. The fact that I just bought a
new house and cannot really afford a loan on the ~20K difference (incl.
taxes) to a new one doesn't help, either.

Also, I have another car (a 12-year old Golf) that I would like to
replace for safety (no airbags etc.) soon, perhaps with the A3 Sportback
– which will take money in a year or so.

On the other hand, there is the nagging question how well it will hold
up after being pulled and straightened out again. And the resale value
taking the crash into account will surely drop by 2K or so.

Any thoughts?