By Jordan W. Charness
“I’m going to save you a lot of money!” were Ken Selcer’s first words to me when he took a look at my wife’s van. She had leased the vehicle four years previously and was set to return it in about a month. Ken owns a company called ACCDirect, which exists for the sole purpose of conducting lease return vehicle inspections for consumers. This is a relatively new industry that is starting to take hold in Canada, and Ken is one of the pioneers.
Deciding whether to purchase or lease a vehicle is always a complex decision. The major difference, at least from a legal point of view, is that although in both cases you end up driving your new vehicle away from the dealer, you are only the owner if you purchase it. Leasing, on the other hand, is basically a long-term rental.
Many people choose to make monthly payments on their new vehicle. Those payments can either be directed towards buying the car in a purchase contract or are simply a form of rent in a leasing contract. If you buy the car, you have the right to maintain it in any condition you desire. As long as you make your finance payments and do not drastically reduce your vehicle’s value until you pay off a finance company, the car is yours to do with as you please. This can include choosing to ignore or postpone repairing collision damage.
People who lease their cars, on the other hand, are essentially driving someone else’s vehicle. Although you may have your name listed on the registration, you’ll note that you are only listed as a long-term lessee. The finance company is listed as the true owner of the car.
It is this legality that created a need for a company like Ken’s. Hidden deep within the leasing contract is a clause that requires you to return the vehicle in the same condition that you got it in when you picked it up from the dealer with the exception of normal wear and tear.
Unfortunately, in most cases the term “normal wear and tear” is not defined in the contract. This leaves it open to the finance company to decide whether or not your car has been returned with excess wear. If so, they have a right to charge you to repair the excess wear and tear at your expense.
Different car companies have different guidelines for what they will accept as normal wear and tear. For some a small scratch is considered acceptable while for others a scratch of the same size may be something they will decide to charge you for. In most cases, you can obtain a copy of the guidelines either on their web site or from the manufacturer or finance company, but the details can often be confusing for an amateur.
Ken used to be hired by the car companies to verify vehicles being returned to see whether or not a charge could be made for excess wear and tear. Now he has developed his own company and has switched sides. He now tells consumers what to expect when returning their vehicle.
How can this type of inspection save you money? Your contract and the law only require you to return the car in good condition. Nowhere in the law does it say that you must have the dealer or the car company repair the scratches, dings and dents. When a car is returned, the car company will charge you according to the book value of the repair. Taking the car to a private body shop to get it fixed can often save you hundreds of dollars over the book value.
Having someone like Ken tell you what damage needs to be repaired and what can be ignored will also save you some extra bucks when going to the body shop. The body shop still has to do a decent job in a repair so that the car really is returned in the condition you promised to return it in the contract. The car company is satisfied as well because they are receiving the car back in the condition provided for in the contract.