​Leasing a vehicle means renting it for the duration of the lease. At the end of each lease, you have the option to purchase the car or lease a brand-new car. If you damage your leased vehicle, there are several things you will face, but don’t panic! The process is not very different from what you would do if you owned the vehicle. We will go over what to do if you get into a car accident and what to do for minor damages like a cracked windshield and scratches. We will also discuss what you should consider before returning your leased vehicle.


Can I Return a Leased Car with Damages?

The most common question asked is, “Can I return a leased car with damages?”. The answer to this question is more complex than a simple yes or no. Many people think they have the negotiating power with the dealership if they want to get into a new lease with the same dealership. They believe the damages will be looked over because they will continue to give the dealership more of their business. Although you might not pay out of pocket for the damages when you return your leased vehicle, if you do lease another car, the tradeoff is worse than the actual damages. The damages cost plus interest will be rolled into your new lease for you to pay off over time. Not only will you eventually be covering the cost of your own damages, but you will be paying extra in interest. No matter what a car salesman tells you, someone has to pay for the damages, which will most likely be you!

What Happens When You Damage a Leased Car?

Leasing a car can be a great way to get behind the wheel of a new vehicle without having to pay the full sticker price. What happens when you damage a leased car? You fix it! The good news is the process for fixing a damaged leased car is not any different than fixing a car you might own. Since the company you’ve leased from expects you to return your vehicle with a normal amount of wear and tear, damage beyond this will result in fees and extra charges at the end of your lease term.

If your car is involved in an accident and needs significant repairs, those costs will be passed on to you, the lessee. Therefore, it’s essential to read the lease agreement carefully and understand what is and isn’t covered before signing anything. Don’t hesitate to ask your leasing agent if you have any questions. By understanding what’s expected of you when leasing a car, you can avoid any unpleasant surprises down the road.

What to Do if You Get into an Accident with your Leased Car

Contact your insurance provider

If the damage is minor, you are not required to contact your insurance provider. Many people simply pay for the damage themselves, especially if it is under their deductible amount. Minor damage can often be repaired without too much trouble and without getting insurance involved. On the other hand, if the damages exceed well beyond your deductible, it’s worth it to contact your insurance. When you contact them, give them all the details of the accident so your insurance agent can start the claims process. After the claims process, you will be able to hopefully repair your vehicle to how it was before the accident. For more information on what to do after you are involved in an accident, please read our article HERE.

What About Minor Scratches, Dents, and Cracks in my Windshield?

When it comes to your leased vehicle’s windshield, a crack or chips would need to be repaired before returning it. As stated above, it’s better to fix it before returning it because windshield repair at a dealership is more expensive than doing it on your own with a repair company. Most windshield repair companies drive to your home or work, making it an effortless transaction. When leasing, always jump to fix a chip in your windshield before it turns into a large, expensive crack.

Depending on the vehicle you’re leasing, minor dents, dings or scratches could be covered under the lease agreement’s “normal wear and tear”. This is something to double-check, so you don’t get stuck with extra costs. For example, Ford allows up to 3 minor dents or scratches per panel up to 4 inches. They also allow up to 15 paint chips per panel. Not all companies will be as generous, so make sure you understand your lease agreement’s normal wear and tear.

When you turn in your leased vehicle, part of the process is getting a pre-inspection done. This includes a full assessment of the vehicle damages beyond normal wear and tear. If any damages are found, they won’t come as a surprise to you when you get the bill at the end. After a pre-inspection, you will have the opportunity to fix these damages or roll the price of the damages in your next lease. As discussed above, it’s better to fix the damages right away if possible, so you don’t have to pay additional interest in your next lease.

How Does this Effect the 2022 Car Shortages?

In 2021, used car values rose rapidly because of high demand due to limited new car inventory at car dealerships. According to Cox Automotive, at the end of 2021, the average used car in America sold for $28,205 which is 28% higher than in 2020, and 42% higher in December of 2019. Because of a lack of inventory, car dealerships are trading in used cars and paying more than normal. Additionally, people returning their leased vehicles are getting top dollar on the return, which is unique to our day and age. Because of this, perhaps the consumer can negotiate damages on the vehicle and will have more leverage than they did in previous years, just so the dealer can have more inventory. Another factor that is unique to this time is that it’s cheaper to buy out your lease at the residual value than to return it to the dealer. This is because dealers are often willing to eat the costs just to add to their inventory. If you’re returning a leased vehicle, be sure to ask your dealer about these costs and what discounts they may be able to offer you on top of any incentives that are currently being offered because of the high demand for vehicles.

These top five things to consider if you damage your leased vehicle is a simple process that does not have to be stressful. You can return your leased car with damages but be prepared to pay the price later. It’s better to return your leased car as you received it, and remember, normal wear and tear is ok!