Automotive

Lease Question - Depreciated Value Due to Accident (Can you get charged for this?)

  • Last Updated:
  • Jun 5th, 2018 11:03 am
[OP]
Member
Jun 15, 2016
224 posts
125 upvotes

Lease Question - Depreciated Value Due to Accident (Can you get charged for this?)

I'm currently in a lease, that needs to be returned at the end of this year. The vehicle was involved in a minor accident last year, however the repairs were in the excess of $8000+.

The vehicle was repaired with all new OEM parts.

My question is, will I be dinged by the manufacturer when returning the vehicle now that the car depreciated due to the accident showing on the VIN?

The reason I ask this, after reviewing the lease agreement, I noticed a clause in there that states the following:

"You will indemnify us for any loss or damage to the vehicle and for all claims, losses, damages, injuries and cost that we may suffer or pay or may be required to pay including legal expense, in connection with

i) condition (including any reduction in the value of the vehicle as a result of an incident involving the vehicle, even if any damage cause by such incident has been repaired)
Last edited by Mikenello on Jun 4th, 2018 5:19 pm, edited 3 times in total.
14 replies
Deal Guru
User avatar
Jul 12, 2003
10673 posts
3006 upvotes
Toronto
AFAIK, you need to repair the car at their authorized shop, not a garage ABC.
Never heard of being penalize because it's been accidented during the term of the lease. At the most you insurance company will cover it if you are at fault, or the at fault party's insurance cover it for it if they are 100% at fault.
Retired Forum Moderator February 2009 - June 2015
[OP]
Member
Jun 15, 2016
224 posts
125 upvotes
MP3_SKY wrote: AFAIK, you need to repair the car at their authorized shop, not a garage ABC.
Never heard of being penalize because it's been accidented during the term of the lease. At the most you insurance company will cover it if you are at fault, or the at fault party's insurance cover it for it if they are 100% at fault.
Sorry, to be more clear, it was already repaired last year at reputable auto body shop.
Deal Addict
User avatar
Jul 5, 2011
1416 posts
1166 upvotes
Toronto
In almost all major manufacturer leasing programs, the residual value is guaranteed by the manufacturer.

This means it is independent from market conditions, accident history, true value, etc.

The only thing you would be responsible for is a) unrepaired damaged b) excess mileage c) excess wear and tear or d) poorly repaired panels (ie. paint drips or peeling / mis-matched colors).
2013 Wins - $1320 - Woohoo!
Deal Guru
User avatar
Jul 12, 2003
10673 posts
3006 upvotes
Toronto
Mikenello wrote: Sorry, to be more clear, it was already repaired last year at reputable auto body shop.
Reputable and authorized is different.
They can be reputable but not authorized.

Upon the lease return, if the inspector have problems with the repairs, they can add this to your final bill or you have it get it repair again at their standard .
Retired Forum Moderator February 2009 - June 2015
Deal Addict
Sep 8, 2017
3005 posts
3111 upvotes
GTA
I would hope that an $8000 repair was claimed on insurance and done through the dealer's body shop.
Deal Addict
Sep 1, 2004
4690 posts
3169 upvotes
Diminished value on lease returns, if you have that clause in the contract, you may get charged.

Lease return Inspection will tell you if you owe anything.

Some leases do have that clause, some don't. If you don't agree with their assessment, you can always buy it out and try your luck on the used market. This is why when you lease, you gotta have access to credit or cash ready to buy it out in the end. Or sometimes dealers will offer to end your lease early to get into another car, see what they can do about it.

It's hard to get diminished value on claims. There are quite a few threads on this already. While unethical (but I'm sure most do it) is just claim maximum you can get out of soft tissue injury, may be that will cover some of that diminished value.
derass wrote: I would hope that an $8000 repair was claimed on insurance and done through the dealer's body shop.
That's the best way to deal with a lease accident. Don't do anything outside of dealers, so when something not up to spec, it's never your fault.
[OP]
Member
Jun 15, 2016
224 posts
125 upvotes
To make my initial post more clear, I'm not worried about the repairs or work done. The insurance companies preferred shop was used for the repairs, the auto body shop guaranteed the work, if there is any issues they will fix it to Hyundai standards.

I'm inquiring if the diminished value due to the vehicle having a claim on it will affect the return of the lease.
Deal Addict
Sep 1, 2004
4690 posts
3169 upvotes
Mikenello wrote: I'm inquiring if the diminished value due to the vehicle having a claim on it will affect the return of the lease.
Yes, I have known people who got charged on this on return but not enough data on how often and which brand more likely to do this.

Again, it depends on if Hyundai set residual low enough to cover the diminished value in wholesale market. High residual brands will likely go after you for diminished value if you don't buy it out. The only case I know is MB.
Deal Guru
User avatar
Jul 12, 2003
10673 posts
3006 upvotes
Toronto
Mikenello wrote:
I'm inquiring if the diminished value due to the vehicle having a claim on it will affect the return of the lease.
I don't think so, ( I could be wrong)
From my understanding, the beauty of a lease comparing to a finance is you can just return the accident and repaired car back to the dealership, then get a new one. VS financing, the depreciating of an accidented car impact the resell value of your own car.
Retired Forum Moderator February 2009 - June 2015
Deal Addict
User avatar
Jul 5, 2011
1416 posts
1166 upvotes
Toronto
What's the brand OP?
2013 Wins - $1320 - Woohoo!
Deal Guru
Jan 15, 2006
13449 posts
10238 upvotes
Richmond Hill
MP3_SKY wrote: I don't think so, ( I could be wrong)
From my understanding, the beauty of a lease comparing to a finance is you can just return the accident and repaired car back to the dealership, then get a new one. VS financing, the depreciating of an accidented car impact the resell value of your own car.
Yup I've never heard of anyone getting dinged for diminished value due to an accident. As long as the car was repaired with original parts and to the satisfaction of the lessor there shouldn't be any "extra" charges.
Deal Expert
User avatar
Jul 30, 2007
25726 posts
10769 upvotes
Toronto
$8000+ on the repair on a Hyundai .. should have been written off Smiling Face With Open Mouth And Smiling Eyes

Hyundai FS will likely get rock bottom $ at wholesale when it gets this car back.

Hopefully, you have informed the leasing company of the accident (as most likely required if damage is >$ x ... check your lease agreement) and the repair process (before/during/after). You sure don't want to give them any loopholes to come after you when they are doing lease end inspection.
Deal Addict
User avatar
Jul 5, 2011
1416 posts
1166 upvotes
Toronto
Mikenello wrote: Hyundai.
Best bet is to call Hyundai Financial Services and ask them.

I can tell you at almost all major brands, you are only responsible for excessive wear & tear / existing damage / excess mileage over your allowance / missing items.
2013 Wins - $1320 - Woohoo!

Top