I would most definitely let Motability’s insurers deal with this. If you have gone into the back of a car then you are at fault (unless it’s a deliberate pull in front of you and slam the brakes on to claim a whiplash injury fraud). I am therefore suspicious as to why the driving instructor wants to avoid insurers when he / she isn’t at fault. At best they will just pocket the money (maybe the scratch was already there before you bumped into it) or, once you agree to that route, he / she can start coming back with all sorts of spurious claims, hence why you need the protection of an insurer. Besides, isn’t the excess the maximum amount you pay, not the minimum, so you’d only pay £300 if the combined work to both cars was at least this value (which I guess it almost always will be).