Five things to do if you damage your leased vehicle

First, it’s important to clarify a few things surrounding leasing, and the damages incurred when in a car lease. Unlike buying a car, leasing a car means you are renting the vehicle for the length of your lease, with the option to purchase at the end, which most of the time never makes any financial sense, but that for another article.

If you damage a leased vehicle, its important to know the truth about what will be forgive if you get into a new lease, what’s covered, and ultimately what to do. 

Can I return a Leased Car with Damage?

This is probably one of the most common misconceptions. Many people think they have negotiating power when it comes to the damage incurred during the lease, because they believe the damage will be waived if they get into a new lease. Will they forgive your cars damage if you lease another car with that dealership?

No, nothing in life is free, especially on a car lot. Although you may not have to pay out of pocket for your damages if you lease another car with the same dealership, but the tradeoff is much worse.

Instead, the damages will be rolled into your new lease and you will pay for them throughout the life of your new lease and on top of it you will now be paying interest on your damages. No matter what they tell you at the dealership, someone is paying for the damages, and you can bet it wont be them. The tactic is simple. Raise the price of the vehicle to cover the damages.  So instead of you getting $2,000 below invoice, you are not getting invoice on a car, or they use some of the incentives on the car and not pass those along to the customer but instead use them to cover the damages.

I cracked my windshield on the car I’m leasing, what do I do?

When it comes to cracked windshields, this needs to be repaired prior to turning your lease in. The average cost of windshield repair is around $300, but at a dealership, especially a luxury car dealership, the price can easily exceed $700.

Minor chips in the glass can be replaced for $30 if the crack is caught early enough. When your leasing, always jump on repairs to windshields ASAP and you will save yourself hundreds on repair bills.

What happens when I scratch my Leased Car?

Depending on what type of vehicle you leased, everyday scratches will be covered as normal wear and tear on your car. Ford for instance allows up to 3 dents, dings, or scratches per panel with diameters up to 4 inches, and up to 15 paint chips per panel. 

It is important to get a lease pre inspection prior to turning in your lease, because if you don’t, you are in for a surprise bill, or the monthly payment on your new lease just went up.

Here is what you should do if your damage your leased vehicle.

1. Contact Your Insurance Agency

If, and only if the damage is sufficient, should you contact your insurance agency. Insurance on a leased vehiclein Orange County, as in most areas, is designed to protect the vehicle and compensate for any depreciation of the car’s value. For this purpose, limits are usually higher than on purchased vehicles.

The standard requirement for insurance on a leased car is 100,000 bodily injury and 300,000 total bodily injury per accident.

It is important to note that ALMOST every single new lease comes standard with GAP insurance. If your vehicle is damaged more than the total worth of the vehicle, GAP insurance will make up the difference. It essential bridges the difference between the value of the vehicle and the lease payoff. This way you won’t have to make up the difference out of your pocket. This is vital for cars that have been totaled.

We always recommend you obtain a full and comprehensive policy, especially with a luxury or high-performance vehicles. A comprehensive policy will cover collisions, natural disasters, vandalism and theft.

2. Read the Service and Maintenance Clauses

Go back and review the service and maintenance clauses in your lease agreement. Some repairs are covered under a lease agreement, depending on what options you added to your lease. In addition, the vehicle’s warranty and a covered maintenance plan may lessen the cost of repairs.

If the damage occurred on a part that was supposed to be covered by warranty, you can get it repaired by the dealership complimentary.  Bumper to bumper warranties are a benefit to most leases. For instance, BMW not only covers your car 4 years or 50,000 miles comprehensive, but they cover you 3 years or 36,000 miles for maintenance (Excludes things like tires, brakes etc)

3. Make Sure Original Equipment Manufacturer Parts Are Used in Repairs

Most vehicle leases will require that any repairs use only original equipment manufacturer (OEM) parts. An entire industry exists using non-OEM parts, but you could void your lease agreement by using these parts in any repairs made. Comprehensive insurance and service contracts can help you avoid these pitfalls. Make sure you instruct the body or repair shop or that only OEM parts are acceptable.

Just because your vehicle needs to be replaced with OEM parts doesn’t mean that the repairs need to be made at a dealership.

Many people think that repairs at a dealership are necessary. If you are replacing or repairing parts that were not covered under warranty then you should always get multiple price quotes from various body shops.

4. Get a Pre-Inspection

When you turn in a leased vehicle, part of the process includes an assessment of vehicle damage beyond what is considered normal wear and tear. If the damage to the vehicle is only cosmetic, consider having a body shop make the repairs. It may lessen the bottom line when you turn in the vehicle.

If you decide you do not want to repair the vehicle and would rather roll the price of the damages into your new lease, something I highly discourage. You want to still get a pre-inspection prior to getting your new car, so you have an estimate of what repairs will be covered as normal wear and term, and what the estimated costs for those repairs are. Then you can negotiate the new car lease down, then mention your repairs after you have agreed upon am price and then the payment should only go up the difference of the repairs spread out over your lease term.

The same is true for a cracked windshield or nicked up tires. Car buyers, even for used vehicles, are looking for something that is as close to pristine as possible. How the car looks will affect any damage assessments and the valuation of the car if you are trading it in for another leased vehicle.

5. Negotiate Repair Bills

As we have mentioned all throughout this article. Every step of the process, you should be negotiating. Shoot, you can even negotiate the $30 windshield crack repair down to $25 if you want. If you are looking to lease another vehicle from the same dealership they will not be forgiving, so come prepared and do your homework. It will save you a lot of time and money.

To learn more about negotiating your car leases, give us a call or hire us to handle your next lease or purchase.