Automotive

Lease Car Accident

  • Last Updated:
  • Sep 15th, 2020 8:44 pm
[OP]
Newbie
Sep 11, 2020
1 posts

Lease Car Accident

I had a weather related incident with my car and the damages to the vehicle were substantial- about $7500. The car is with the bodyshop (dealer’s recommended) and it’s going to go under comp coverage. The vehicle is under lease until 2024.

Out of curiosity and after the car is restored to showroom standards, can I walk away early and terminate the lease with the dealership?

Thank you
22 replies
Deal Expert
User avatar
Jul 30, 2007
27743 posts
12820 upvotes
Toronto
Of course you can, you just break the contract and pay the penalty. In the end, money talks.
Deal Fanatic
Oct 6, 2007
8192 posts
4725 upvotes
Kootenays
What's a "weather related incident"?
Member
Nov 10, 2015
293 posts
248 upvotes
Thornhill, ON
smacd wrote: What's a "weather related incident"?
Maybe the sun was in the OPs eyes?
Deal Addict
User avatar
Jul 5, 2011
1573 posts
1392 upvotes
Toronto
VTECdp96 wrote: I had a weather related incident with my car and the damages to the vehicle were substantial- about $7500. The car is with the bodyshop (dealer’s recommended) and it’s going to go under comp coverage. The vehicle is under lease until 2024.

Out of curiosity and after the car is restored to showroom standards, can I walk away early and terminate the lease with the dealership?

Thank you
Good chance you'll be saddled with negative equity if that is your plan.

The insurance claim will reduce the market value of the vehicle significantly, and that will impact your ability to walk away.

For example:

Car A - Current lease owing $30,000, market value of $29,000 - there is only $1000 negative equity

Car B with accident - Current lease owing $30,000, market value of $23,000 - $7000 negative equity

Good news is it won't impact your return as long as it's fixed right.
2013 Wins - $1320 - Woohoo!
Member
Aug 23, 2014
323 posts
131 upvotes
Mississauga, ON
This is the nice thing about leasing a car though - as long as you get it properly repaired, you should be able to just walk away at the end of your lease.
Deal Addict
Jun 26, 2009
3680 posts
2513 upvotes
GTA
smacd wrote: What's a "weather related incident"?
Hot weather causing condensation on cold beer can. You drink beer faster to minimize the condensation.
Member
User avatar
Jul 24, 2010
431 posts
182 upvotes
Toronto
You can end most leases whenever you want. Your accident will have no impact on this. However, you will owe the leasing company/dealer money if you return any leased car early. The lease price will be recalculated as if it were for the shorter period, and you will owe the difference between how much you have actually paid to date, and how much you would have had to pay for the shorter lease.

When did you start the lease? If you are leasing until 2024, I assume you very recently got the car. You will owe the dealer a lot of money... thousands of dollars.
Deal Addict
User avatar
Apr 3, 2007
1267 posts
237 upvotes
Vancouver
When are you planning to end the lease? After the car is repaired? Your going to pay big if your lease is up in 2024 you'll basically be paying 4 years for nothing.
Sr. Member
User avatar
Jul 20, 2016
686 posts
586 upvotes
Toronto
yea way too early for you to walk away. You pay the payments in a linear function while the car is depreciating much quicker in the first few years. I mean you caught a big break in that you are leasing so your total cash outlay (i.e. the amount of depreciation you pay) remains the same even tho the car is now gonna be worth less.
Sr. Member
Nov 22, 2017
612 posts
355 upvotes
What's the main reason you want to walk away from the lease so early. The car will probably get repaired and will be derivable for the next 4 years. You should actually be happy that you can walk away from the car with an accident record after 4 years.
Deal Addict
May 4, 2014
4551 posts
5445 upvotes
Toronto, ON
After it's repaired, I foresee the car running into the first lamp post outside the body shop due to catastrophic brake failure combined with another unfortunate weather related incident. Now you can termimate the lease for good and get into a new car.
Deal Addict
Jan 8, 2007
2642 posts
1148 upvotes
Calgary
er34er34 wrote: After it's repaired, I foresee the car running into the first lamp post outside the body shop due to catastrophic brake failure combined with another unfortunate weather related incident. Now you can termimate the lease for good and get into a new car.
And if he has replacement insurance, he will get all his payments back minus tax and interest. Not that I condone fraud like that...
Deal Addict
Jan 8, 2007
2642 posts
1148 upvotes
Calgary
If you want to get out of it, you simply have to think of it as a car sale. You have a payout quote on the car. Same as if you financed it. You can try and sell it privately, trade it in or sell it to a dealer. It's as simple as that.

The fact it has a big claim on it, you will be horrified by what you get offered on trade in or sale to dealer...

Best thing is to keep it until lease end and hand it back. As others have mentioned, this is one benefit of a lease. You can hand this thing back at lease end, and not worry about the carfax claim that it will have.

Top