The hardest part of the repair is tracking down the replacement panel. So many manufactures out there and they are all usually changing their panel "profile" or texture and colors, and even if you find the exact siding, after a few years (fading) in the sunlight, the repair sticks out like a sore thumb! Unless this (minor) damage is right by the entry door for all to see, I'd caulk it with the best matching color that you can find and walk away. If you do have a scrap pc. stick your siding tool into the bottom of the panel above the panel to be repaired. this is the easiest to do at a seam (vertical) where 2 panels lap together. Pulling down while sliding the tool horizontally will "un zip" the bottom of that panel. While holding (bending) that loosened panel upward, remove the nails from the top of the damaged panel to be relaced. A general rule is to keep your seams as far apart from each other as you can for appearance. You can cut the damaged panel to this legnth to avoid replacing the whole panel. Once you replace and nail the damaged panel, use your tool in reverse, pulling down and hooking the panel above. This will be easiest to do on a warm day in the sun. Older vinyl can get kinda brittle, esp. in the cold. You'll make the repair (legnth) from the damaged area to the closest existing seam, left or right. You'll also have to cut the height to match the repaired pc. This will come off the bottom of your replacemet panel, just measure or match up with the old. The bottom pc is called J channel, I'd just caulk that up! Use a common pair of snips and a razor knife for cutting. Good luck, once you get it apart it's obvious.
