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My leased vehicle was in an accident – what are my options?

If you lease a vehicle and are in an accident, do you need to report it to your leasing company? My insurance is covering the cost, less the deductible. – Grant

Honesty might be the best way to deal with the lease of your worries. Car companies often require you to turn yourself in when you turn your car in.

"A customer is required to disclose [any accidents] when they turn the vehicle in – it is part of the turn-in report," said Thomas Tetzlaff, spokesman for Volkswagen Canada, in an e-mail. "We require this information because we, in turn, are required to disclose this information to the next customer."

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Check your lease to see whether you have to tell them if you've been in any crashes even if you've had it all fixed, experts said.

"Some leasing companies send out an inspection team to review the car to allow for accident records to be obtained prior to the car being returned," said Sharon Lucas, a sales manager with Lease Busters. "They will also advise any abnormal wear and tear to allow the person to either correct it themselves – or they will send them a bill for the dealership to repair."

Is the crash already out of the bag?

Even if they don't ask and you don't tell, they may find out anyway.

"If fixed by insurance, or even estimated at a body shop, an accident will more than likely will show up in a CarProof vehicle history report irrespective of any declaration," said George Iny, president of the Automobile Protection Association (APA), in an e-mail.

Plus, the insurance company may have informed the car company, too.

"If a cash payout was made for repairs or a total-loss, then the leasing company would be added as a payee," said Pete Karageorgos, director, consumer and industry relations for the Insurance Bureau of Canada. "The leasing company is the owner of the vehicle and they have an insurable interest in the vehicle."

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Fix the dings, or get dinged again

So what will they charge you when they find out that you drove into a minivan in the Costco parking lot? As long as the repairs were done properly, probably nothing. "We do not charge the customer provided it has been properly repaired," Tetzlaff said.

And if they don't think the repairs were done properly?

"If the lessor [the leasing company] determines the repair was not performed to an acceptable standard, they could assess a penalty equivalent to the value of reconditioning the vehicle to their standard," Iny said. "Even thought they rarely undertake the actual reconditioning."

For example, you could be charged if you put on tires that are of lower quality than what was on the car originally.

If the car is now worth less because of the collision, it's the car company's problem, not yours – you don't have to pay for that loss, Iny said.

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"Loss of value after a major repair completed to a commercially acceptable standard is assumed by the lessor," Iny said.

This is all assuming that you're giving back the car – if you're buying it, the car is yours, in all its diminished value.

Ready to wear?

Even if you haven't been in a serious accident, you're responsible for excess wear and tear at the end of the lease. The leasing company often gives a list specifying what that actually means.

"The lessee may be considered about other damage to the vehicle that has not been repaired, like small dents, bumper damage – that is a totally different question related to normal wear and tear," Iny said. "In that situation, the lessee should have the work estimated independently about a month before the end of the lease, consider which repairs, if any, to perform, and document the condition of the vehicle."

Often, leasing companies will sell you an excess wear waiver which covers dents, paint scratches and worn tires.

Have a driving question? Send it to Canada's pretty big, so let us know where you are so we can find the answer for your city and province.

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