I think that you'll want to hang onto the vehicle as it's a tangible asset, unlike an insurance claim or promise from the town to pay, which are really worth only the paper they're written on. The reason the rozzers want the Jeep is to sell it at auction, so-called "asset forfeiture" has become such a lucrative cash cow that even the most corrupt AG in history is considering revoking their license to steal.
Do everything that you can to keep them from getting their filthy mitts on quite possibly the only recompense that you'll see from this unfortunate incident.