I never really put much thought into this question. I always figured that since you are renting, you just get the car repaired, drive it until your lease expires and return the vehicle. That is, at least, the more logical approach. Well I get this letter from my bank yesterday that really got me thinking…here is what it says:

“Has your leased vehicle been in an accident that resulted in frame damage? The at-fault party (or their insurance company) may owe you for diminished value. It is important that you work with your insurance company or at-fault party to understand how this may impact the value of your vehicle and the money you may owe the bank for excess wear and tear charges at the end of your lease term.”

Well, that’s a rather shocking revelation since I had always treated leases as rentals…you drive, fix and move on to the next. Granted, I do understand where they are coming from (if you crash a car, its residual will drop, and they basically want to make me responsible for that difference). In my case, that happened 4 years ago and I have switched insurance companies since. Even thought it wasn’t my fault, I don’t even remember the insurance company of the at-fault party…I am really hope this doesn’t end up being a huge hassle.

I’m a true believer of “learning by example” So I’m hoping folks out there learned something today via my example.