2016 Scion iM (rebranded as Toyota Corolla iM since start of lease)
Lease end in June 2019
Car will have 36,000 miles
In June 2016, four days after driving the leased car off the lot, I was in a major accident. Luckily I walked away and the car was not totaled; I did not buy gap insurance. Toyota Collision Centers restored the car. The other driver paid for everything. Insurance adjuster told me I was within $1,000 of the car being deemed as totaled. Car runs perfectly. If you weren’t told it had been in an accident, you would never know.
In June 2019, the car will be turned in for end of lease. The contract states the buy-out and close out costs.
My question is:
Does the accident reduce the value of the car, in which case I should (try to) negotiate buying it for the adjusted value, not the buy-out amount listed? I would only want the car if I was getting a deal because it was in an accident and doesn’t have as much value to the dealer.
I would not even worry about until the time you actually turn it in . My feeling is that the contract turn in fees will not change . The leasing company will decide what to do with the car and frankly I would not want the car .
Just wondering though, if you think it is worth less because of the accident, wouldn’t the dealer also think it is worth less, and therefore charge you for the diminished value? Under a lease, you are responsible for excess wear and tear which a near total accident seems to be. I got charged for a windshield chip, tear in the seat and a tire worn unevenly. I even went to court and lost.
If there was no title transfer as a result of the accident, and the vehicle was never declared a total loss, then it still has a clean title, and its factory warranty remains in effect. Its value should not change, and a prospective buyer should have no way of knowing that it was ever involved in an accident.
You don’t need a title transfer to tell a car has been in an accident. A car that was damaged to within $1000 of a total will have many many tell-tale signs of work done that can be found during an inspection. You simply can’t do major body work and make it look like it did from the factory. We don’;t know though if it was front end, rear end, side impact or what to go into details.
Our leased car got rear ended, and repaired, sure it diminished the value of the car but we did not owe anything when we turned it in. I was not interested in buying the car.
This kind of condition is very likely to be on a CarFax report.
Regarding its value not changing, let me pose a question to you that I used on a judge in small claims court more than 20 years ago, before people were in tune with “diminished value” judgments. He asked on what basis I felt entitled to monetary compensation for loss of value. So I posed this question-
Your honor, if you had two exact same cars to choose from, one with normal wear and tear and the other repaired after a major accident, which one would you choose?
I won and was awarded the money for diminished value that I had requested.
It’s interesting that Toyota Collision Center repaired the car. Is that a section of the Toyota dealership? If the dealer fixed the car how can that same dealer tell you the car has diminished value? Is their work poor?
Another point. The liable party is also responsible for diminished value. If you have not already closed out the claim, follow up there.
This is a leased car so the owner is the dealer or Toyota. The person leasing the car would have no claim for diminished value, but Toyota might but it’s been several years it sounded like. At any rate it was the OP that wanted to use diminished value as a way to buy the car at a discount. It would seem a little risky to me to bring it up and if I were the dealer I’d say “yeah it is worth less now so I guess you owe us a couple thousand”. Shoot yourself in foot.
Diminished value has different laws and regulations in all 50 states plus DC. Here in Florida, DV can be granted to a lessor.
My SIL was hit in the rear of her leased CVR last fall. The liftgate was replaced. All repairs paid for by other party’s insurance. Her car is 2 1/2 years old. She wants to downsize to one car and asked the selling dealer to buy her leased car for the payoff. They refused. The Honda dealer and my Acura dealer estimate the car is worth 20% or $5000 less because of the previous accident.
My SIL has filed a DV claim against the other party’s carrier. The sent her their forms. I’ll post the results.
Because any potential owner after the accident will view the car as being less valuable due to the major accident it was in. Market value is not necessarily tied to reality. Perception is everything. Would you buy a flood car that has been “restored”? Or a house? Would you expect to pay less even if it was “professionally” restored?
I understood the question from the OP to be about whether the dealer would reduce the value of the car at the termination of the lease. He wanted to negotiate a lower price for the car because of its diminished value. What I was saying is that the dealer could easily refuse to do that by saying there was no diminution of value because the work was done by Toyota itself and of the highest quality, etc. Of course, that would give the opportunity for him to hold the dealer to the agreed value in the lease, with no deduction for the consequences of the accident, and simply turn in the car.
If the dealer wants to deduct for diminished value, the OP will have to pay for that at the end of the lease, so even if he gets a deal on buying the car, he will still be assessed for the loss of value, and he loses anyway.
And of course the holder of a leased car can claim loss of value. He’s liable for it, so its his loss and he can try to get it from the other driver’s insurance company or the driver himself.
All of this has nothing to do with the reality that a repaired car has less value. @TwinTurbo is right, it’s all what people feel.