I think you should ask for the lower estimate of $1030 whether you fix the car or not. He's willing to pay that amount to have the car fixed and if you have decided not to, you may change your mind at some point then wish you would've taken the money. Your time is worth something as well plus aggravation, neither of which he's being charged for. You did have a car that was fine and now, through no fault of your own, you have a damaged one. It was nice of the guy to leave you a note but he should still pay for the damages regardless if you intend to fix them or not.

Cheers,

Bill