A more immediate course of action which might help you is to do some telephone work. Sounds like the other driver is not entirely unreasonable. See if you can find a place that CAN buff the scrape out or give a much cheaper estimate to do the work. Then see if the guy will go there. If you were insured for another car when you bought this used one, quickly check your policy, because you might have had 30 days to to report a new car to them, and can cover it retroactively.
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