Accident/Diminished Value
10-07-2018, 11:42 AM
#1
AudiWorld Junior Member
Thread Starter
Accident/Diminished Value
just trying to get some opinions and suggestions on my current situation. Almost a year ago I was rear ended with just 300 on the odometer. After all was said and done the cost of repairs was about $25,000. The rear impact the bar, bumper and trunk were replaced. Of course the bumper and trunk was painted and the roof and both rear fenders had to be blended. Took about 2 months to complete and most of if was due to the parts coming in from Germany. The shop did a damn good job at putting her back together. So I recently came across a topic in the forum regarding a "Diminished Value Report". I live in California and California is a Diminished Value State.
My car is on a three year lease and is my first Audi. I love this car and plan on financing the car once the lease is up. My question is now that my vehicle was involved in an accident (myself being not at fault), how would that affect the purchase price of my vehicle after my lease is up? It seems that the purchase price should now go down since my vehicle was involved in an accident. I'm pretty sure if I turned this vehicle back in after the lease is up, the next owner of my vehicle would pay less than what was remaining after the lease since it was involved in an accident.
I am also aware that I can still return my vehicle after three years and purchase another of the same year, make and model but hasn't been in an accident. I now have an attachment to my vehicle so I will not be going that route. I have every intention on keeping this vehicle for as long as possible.
Thanks.
My car is on a three year lease and is my first Audi. I love this car and plan on financing the car once the lease is up. My question is now that my vehicle was involved in an accident (myself being not at fault), how would that affect the purchase price of my vehicle after my lease is up? It seems that the purchase price should now go down since my vehicle was involved in an accident. I'm pretty sure if I turned this vehicle back in after the lease is up, the next owner of my vehicle would pay less than what was remaining after the lease since it was involved in an accident.
I am also aware that I can still return my vehicle after three years and purchase another of the same year, make and model but hasn't been in an accident. I now have an attachment to my vehicle so I will not be going that route. I have every intention on keeping this vehicle for as long as possible.
Thanks.
10-07-2018, 12:16 PM
#2
AudiWorld Super User
Your residual value (buyout price) is fixed. I'd get attached to a different car. $25k repair bill is crazy.
10-07-2018, 12:54 PM
#3
AudiWorld Super User
This is one advantage a lease has - your value hasn’t been affected because it’s technically not your car. Audi has suffered the loss of value because they hold title. The buyout is contracted at the inception of the lease regardless of circumstances that happen during the lease term. Under miles, over miles, fender bender, more serious accident...your contracted buyout price is established at the start.
If this was a car you financed, that might be a different story, but finished value claims can be very complicated and time consuming, situation notwithstanding.
If this was a car you financed, that might be a different story, but finished value claims can be very complicated and time consuming, situation notwithstanding.
10-07-2018, 08:16 PM
#4
AudiWorld Senior Member
Sorry but I agree with the others, you'd have to be nuts to buy out that lease.
Two other comments.
1. Legally you have no standing to file a diminished value claim against an Audi S4, because--simply put--you do not own an Audi S4 that has diminished in value. The bank does.
2. As others noted, when you signed your lease, you entered into a contract which gives you the right of first offer and refusal when the lease term is up, at a pre-determined price. You will have exactly 2 options: buy the car at that set price or say "no thanks." Sometimes you can "win" at leasing because the actuaries who set the residual were wrong and unforeseen market forces have made a car worth more at lease turn-in than your contract allows you to buy it for, and in those scenarios you can actually make money by buying the lease out and turning right around and selling it or trading in for something else at a small profit. With a $25K accident on the CarFax, this is not one of those situations.
This car is damaged goods and I suggest you enjoy the 2 years you have left, and plan on getting into either a different CPO MY2018 that hasn't been crashed for half its sticker price, or a new MY2021 once your lease ends. There is not a situation I can think of in which you will be able to keep this car without overpaying for it--except perhaps if you turn in the lease after arranging, in advance, to buy the car from the dealer at its then-current price as a separate sale. But I suspect doing even that will not be tax-advantageous for you at all.
Two other comments.
1. Legally you have no standing to file a diminished value claim against an Audi S4, because--simply put--you do not own an Audi S4 that has diminished in value. The bank does.
2. As others noted, when you signed your lease, you entered into a contract which gives you the right of first offer and refusal when the lease term is up, at a pre-determined price. You will have exactly 2 options: buy the car at that set price or say "no thanks." Sometimes you can "win" at leasing because the actuaries who set the residual were wrong and unforeseen market forces have made a car worth more at lease turn-in than your contract allows you to buy it for, and in those scenarios you can actually make money by buying the lease out and turning right around and selling it or trading in for something else at a small profit. With a $25K accident on the CarFax, this is not one of those situations.
This car is damaged goods and I suggest you enjoy the 2 years you have left, and plan on getting into either a different CPO MY2018 that hasn't been crashed for half its sticker price, or a new MY2021 once your lease ends. There is not a situation I can think of in which you will be able to keep this car without overpaying for it--except perhaps if you turn in the lease after arranging, in advance, to buy the car from the dealer at its then-current price as a separate sale. But I suspect doing even that will not be tax-advantageous for you at all.
10-07-2018, 11:38 PM
#5
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The beauty of a lease - dimished value is not your problem.
You can't claim dimished value, since you don't own the car. You're welcome to purchase it at the buy-out price when the lease ends, but that would be nuts.
You can't claim dimished value, since you don't own the car. You're welcome to purchase it at the buy-out price when the lease ends, but that would be nuts.
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