Is "less bad" correct usage of the language?

If an outcome is not as bad as the alternative. Is it correct to use "less bad" to conclude a comparison?

A: I've got bad news, her brother was in a car accident.

B: Is he hurt?

A: No, but the car is in bad shape.

B: Less bad.

edit

@RegDwigнt The car being broken is less bad/worse than the possibility of her brother having gotten himself hurt or dying. In Portuguese we say "less bad" as a conclusion and I wonder if it applies to English.

Your edited question suggests that "Less bad." is a comment in itself, as and end to the conversation. That really wouldn't be understood in English. I think the closest equivalent (at least in British English) would be "Could be worse."

Yes, you can use it, but I wouldn't use it in your example. Even "Better" sounds kind of rude in that situation.

Thinking about it, I might use "Less bad" when commenting on two explicit courses of action, both of which have negatives. But only in a very informal setting. "Better" only says that one option is better than the other, "less bad" also adds that neither option is desirable.

"We are out of half and half for coffee. We could use skim milk instead.

"Ugg".

"Or we could use cream".

"That would be less bad".