GSFHouston

Hi Everyone! I've searched on here and I can't seem to find much information. I have a 2013 GS 350 F Sport in Nebula Grey/Cabernet and it's a 27 month lease with Lexus Financial. Just after having a car a month, a 16yo kid ran a lights and collided with the passenger side rear quarter panel, a bit of the door, and the bumper. The total damages came to nearly $17,000 and the Westside Lexus Collision center repaired the car. They gave me a card for a company that specialized in diminished value appraisals and I'm getting an appraisal tomorrow.
Has anyone had any experience with this type of situation when the vehicle was lease?

bigblack06

iTrader: (20)

I really wouldn't worry about diminished value usually people that keep the car get that because they will have a harder time reselling it, so since its a lease Lexus will have the trouble not you. Sucks at least everyone is ok.

sgmstr

Sorry, but why did they say it needs to be done? I know Lexus will give you a hard time when returning a car with a frame damage.

NobodyHere

Lexus leases carry gap insurance. Not sure why you would need to do anything once the car has been repaired. Turn in the car at lease termination and Lexus has the issue, not you.

NobodyHere

How can they give you a hard time if the damage has been repaired? Or are you implying trying to turn it in without doing the repairs?

GSFHouston

It's already repaired. I picked it up today. There is no issue to simply keep it until the end of the lease and turn in the car. But, if I wanted to get out earlier, or buy the car at the end of the lease, it's definitely worth less after all the body work. The diminished value appraiser told me that since the title is not in my name, that the payment would go to Lexus financial at which point they would apply the amount to future payments, or apply it to the residual value at the lease end. I was wondering if anyone else had done this and what Lexus did with the payment.

SW17LS

If you turn it in you don't have to worry about diminished value.

If the money goes to Lexus my guess is you will never see it again...

jtrue28

Just keep the car, fulfill the lease and drop it off. Do NOT sell it now....you will take a bath.

sgmstr

I didn't know Lexus provides gap insurance for free of charge. Does the lease contract EXPRESSLY state this b/c i've read through the K and haven't seen it.

I had a friend who had leased Lexus a few years back and got into a major accident with frame damage. The insurance company declined to call it a total loss, so he had no choice but to fix, drive and return later. The car was fixed at a Lexus dealership bodyshop so there was no question that the car wasn't fixed right. Got a letter from Lexus itemizing the costs that he needs to pay because the car lost a significant value and one of them was frame damage. It was a surprise, but he ended up paying for it after negotiating the fees.

JDR76

GAP insurance is included in all LFS leases. I assume the costs are rolled in. I'll review my paperwork later as I don't have it with me right now.

DIMINISHED

Make sure that whatever independent appraiser you hire obtains verifiable DV quotes from at least six Lexus dealers and not auction results or formulas.

jtrue28

Either way, GAP insurance isn't that expensive, and well worth its value.

SW17LS

GAP insurance is included in every LFS lease...

LEXSTASY

GAP Insurance: In CA, it is the law. Every lease must include GAP insurance in the lease contract by law.

As far as the diminished value, here is the deal based upon the law. Your lease contract has a expected residual value included in it which is what is used to calculate your payments. The expected residual value assumes that there be no significant damage done to the vehicle and repaired. Lexus usually wants to be able to sell a car as a CPO (Certified Pre-Owned) vehcile after its lease return.

Now, usually with small accidents and minor fender benders, there are no worries here because there is no true diminished value of the vehicle so long as it is repaired properly. However, with larger scale accidents where the cost to repair is extensive or if there is frame damage, the resale value of that vehicle is diminished ebcause that accident will forever show up on the vehicle history report. Lexus can no longer sell that vehicle as a CPO, nor can they even sell that vehicle on a Lexus lot. Consequently, the vehicle will most likely go to auction to be sold after you return the lease. Therefore, Lexus will not be able to meet their expected residual value and they technically can, and usually likely will, pursue you and your insurance company for that difference in value.

So if I were you, I would get a trustworthy appraisal to appraise the diminished value of the vehicle and have your insurance cut Lexus or you a check because you could be on the hook for that money when the time comes to return the lease.

Hope this helps!

Nismo

I'm in a very similar boat as GSFHouston. My 2013 GS 350 F Sport in Nebula Grey/Cabernet was hit by a red light runner and is currently being repaired at Westside Lexus--told you it was a similar boat! One difference is that I own the vehicle, so no lease to worry about, just my own future resale value.

So where does one get a "trustworthy appraisal" from in Houston to calculate the diminished value (a.k.a. diminution in value)? I went here, but have no idea how trustworthy their information is.