Is residual value less if car was in an accident?

Question

I am currently leasing a 2011 hyundai sonata. I was in an accident Dec 2011 and there was 14k in damage. It was all fixed and paid by insurance. The lease ends in Sept 2013. The residual value is $13,400. I was wondering if since it was in such a bad acccident if that makes the residual value less now. I read somewhere that cars in accidents decrease in value by around 30%. If that is the case I would be willing to buy the car at the end of the lease for around $9500 from the dealer.

Is that possible or reasonable?

Anonymous · Accepted Answer

No, the residual value was negotiated and agreed upon at the time the lease was signed. You don't get a do-over.

Uncle Bo · Answer

You're correct.   It's called diminished value.

One big benefit of you leasing the car is you will not take the financial hit from the diminished value.   The leasing company will.   

Will they sell it to you for a lower price?   Maybe.   You'll have to call and see if you can negotiate that.   Don't be surprised if the lender takes the hit when the car goes to auction.

I'm not sure why you would want it.   It's a wrecked car.   Look at it this way.... let's say you were shopping for a nice 2-3 yr old sedan.   You found this one on a dealer's lot.   When you check the CarFax, it shows a major accident listed.   Still want to buy it?   If the answer is NO, then that is exactly what the next potential owner will say to you when you try to sell it in a few years.

If it were me, I'd let it go back and move on to the next (not wrecked) car.   But that's me.

Gary · Answer

Residual value should be the same. Make sure that it is repaired properly or that will cost you. Call Dick Edwards and they will answer any questions that you may have. Visit http://hyundaidealerkansas.com/

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Is residual value less if car was in an accident?

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