Repairing leased vehicles

Avoid post repair surprises…

Most of you have heard the advertised advantages of leasing a vehicle. Access to more expensive automobiles with affordable monthly payments and walking away from the vehicle after the 2-4 year lease term makes leasing an attractive alternative to purchasing.

The most commonly known downsides to leasing are paying for excess kilometers over the allowance at the end of the lease term and being charged for unrepaired damage that is not considered acceptable wear and tear.

However, there is another aspect you should be aware of when leasing. While you, the lessee is required to insure the vehicle, the leasing company still owns it. The lease agreement may require any damage to the vehicle be reported to the dealership. Some dealers may ask that the vehicle be fixed at a repair facility approved by the manufacturer or dealer.

Let’s assume you don’t notify the dealer and have the vehicle repaired. When you return the vehicle at the end of the term, the dealer will ask whether the vehicle was in an accident and inspect for damage to determine whether there have been repairs done.

In some cases, even if repaired at a manufacturer or dealer approved facility, the leasing company will still claim reduced residual value and ask for additional payment when you return the vehicle. If your vehicle has been repaired by your insurance company as per approved industry standards, this becomes a matter between you and your leasing company.

However, this problem is less likely to occur if repaired at a facility the dealer specified. It is important to read carefully all the terms and conditions of your lease and if in doubt, clarify with the dealer any wording in the lease pertaining to damage and repairs.