If the overall condition of your siding is in good shape, and the damaged area is somewhat hidden from plain sight, you may be able to get away with just repairing your siding. The issue here is whether the new replacement siding will match the current siding. Most likely your current siding has faded over the years, which will make it nearly impossible to find an exact color match.

If the damaged siding is in plain view, it may not be worth spending the money to replace that section. New vinyl siding will carry a lifetime warranty on all labor and materials, so if it were ever to be damaged, it would be covered under the warranty. If affordable, you may want to look into the cost to replace your houses siding. You will reduce your energy bills because of the added insulation, and you will never have to worry about damaged or faded siding again.