Having your car damaged, even if it is minor, is a hassle. No one likes driving around in a beat-up ride. However, when you are leasing a car you may not be real motivated to make repairs on a car you don’t own. Whether or not you should depends on the situation.
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This week’s letter comes from Aaron who is leasing a Mazda6; he found his car in a parking lot with a giant scratch and now isn’t quite sure what to do.
Somebody hit it and left a very noticeable scratch/scrape in the fender. I don’t know if I should get it fixed or just turn it in and take a penalty. Will the dealer charge me an arm and a leg if I give it back like that? Should I just put a claim in through my insurance? I don’t want my rates to go up because someone hit my leased car.
There are a couple of ways Aaron can handle this and it all comes down to timing.
If Aaron has awhile to go before he has to give his car back his best bet is probably just to get it repaired. As for the concern about his rates going up, if indeed he found his car like that in a parking lot, most insurance companies would not raise his rates due to the fact that he was not at fault for the damage.
However, if the real story is that he was practicing his drifts and oversteered into a guardrail, the insurance company may look at this differently. But I think it’s safe to assume Aaron is a careful driver and some bonehead needs to learn better parking skills. In which case, he should be fine as far as his premiums go.
Now if Aaron is pretty close to turning in his Mazda lease, say within 30 days or so, he has a few options to consider. The first option is to give the car back with the damage and take whatever damage penalty the dealer and leasing company will charge him.
He should check his lease contract to see if he purchased a “damage protection” plan, these have various names, but essentially they are an insurance plan on a lease that protects you against minor damage done to the vehicle so you won’t be responsible. Most of the time, the dealer will offer this on top of the payments you were quoted. If Aaron does have such a plan he would need to read the details on what it does and does not cover, usually minor scrapes and dings are within the boundaries.
Since Aaron probably did not pay extra for a lease protection plan, here is what I recommend he do. Take the car to a Mazda dealer for an inspection and ask them how much the penalty will be if he doesn’t fix the damage. Sometimes dealer would rather fix these types of things in-house because if the repair is not reported to insurance, there is a change it won’t show up on the CarFax making the car easier to resell. Of course, if the dealer’s fee for returning the car damaged is more than Aaron deductible for repair, then he should just process the claim through the insurance company.
One thing Aaron should be aware of when going the insurance route is to make sure he keeps all the records of the repairs and insurance claim. If for some reason the dealer does not find the repair to be satisfactory and tries to charge him anyway, which is unlikely, he has sufficient evidence to make the case that he processed the claim and made the fix correctly.
While all of this sounds like a pain, and it sucks to have someone damage your car, there is some good news for people that are leasing and get into an accident. Normally, once you submit a claim through insurance that accident shows up on some kind of vehicle history report. Once there is a recorded accident, no matter how minor, it impacts your resale value on the car. If you are leasing you don’t have to worry that your trade-in value is now lower due to a collision. As long as the car is repaired, you just give it back and walk away.
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