What to do about my loan that has collateral against it?

You could go to a car lot and see if they will take it in on a trade and roll the amount you still owe into the new loan. The problem is that few dealers will take a damaged vehicle and like you stated the car is worth less than what you owe. Since you loan is secured by the CD and not the car itself your credit won't be damaged but if you stop paying on the loan, the bank is able to take money from the CD to pay off the loan. You may also have a penalty for liquidating the CD before the term expires. If you have insurance on the car get it fixed. The benefit will be greater to you have a car in good shape vs. its value damaged.