If you lease a car and get into an accident, you might be wondering: Can I claim diminished value? Many drivers assume that diminished value only applies to owned vehicles, but that’s not entirely true. While the process is different for leased cars, some lessees may still have a right to compensation—if they meet specific conditions.

In this article, you’ll learn:

  • What diminished value is and how it applies to leased vehicles
  • Who has the right to file a claim—you or the leasing company?
  • The key factors that determine whether your claim can succeed
  • How to check your lease agreement and state laws for eligibility
  • Why speaking with a professional auto appraiser can save you time

By the end, you’ll have a clear understanding of whether you can pursue a diminished value claim on your leased vehicle—and the exact steps to take next. Let’s dive in.

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Understanding Diminished Value and How It Differs for Leased Vehicles

Diminished value refers to the loss in a vehicle’s market value after an accident, even after repairs. If you own your car, you can typically file a diminished value claim against the at-fault driver’s insurance—and in some cases depending on the state, against your own insurer.

📍 Want to check your state’s laws? View diminished value laws by state.

But what happens when the vehicle is leased?

Leased vehicles present a unique challenge because you don’t own the car—the leasing company does. That means insurance payouts typically go to the lessor (leasing company), not the lessee (you). However, that doesn’t always mean you’re out of options.

Can You Claim Diminished Value on a Leased Vehicle?

It depends. In our 20+ years of experience, we’ve seen less than 40% of diminished value claims on leased vehicles succeed.

While diminished value affects leased and owned vehicles alike, insurance companies generally compensate the loss payee—your leasing company. However, you may have a case if:

  • Your lease agreement penalizes you for the car’s lower resale value.
  • You plan to buy the vehicle at the end of the lease.
  • You intend to sell or trade in the car before the lease expires.
  • The leasing company is not pursuing a separate claim with the insurer.

Who Has the Right to File a Diminished Value Claim?

Since the leasing company owns the vehicle, they have the first right to file a diminished value claim. However, many lessors don’t pursue these claims because they’re not financially impacted—they either sell the car at auction or charge lessees penalties for excess wear and tear.

For lessees, diminished value can still be a financial burden. If your lease agreement requires you to cover the vehicle’s reduced value, you may be able to argue that you should receive the diminished value compensation.

That’s why, as a lessee, it’s crucial to proactively engage with your leasing company following an accident. Informing them promptly allows them to fully assess the situation and decide on the best course of action regarding a diminished value claim.

Why Diminished Value on Leased Vehicles is Rarely Discussed

  • Most lessees don’t realize they can claim DV.
  • Lease agreements often bury details about post-accident value loss.
  • Insurance companies avoid disclosing DV claim options to limit payouts.

How to Find Out If You Qualify for a Diminished Value Claim

Not all leased vehicle owners can claim diminished value, but it’s worth checking. Here’s how:

  1. Review your lease agreement – Look for clauses about penalties for reduced resale value.
  2. Understand your state laws – Some states are more lenient than others when it comes to DV claims.
  3. Check with your leasing company – Ask if they plan to file a claim.

There are also some factors that might disqualify you from filing a diminished value claim, including:

  • Your vehicle does not have a substantial market value (cars under $7,000).
  • You’ve already signed a release of liability form.
  • The accident caused minimal damage (usually under $500).
  • The vehicle has excessive mileage (more than 30K miles per year).
  • Your vehicle is too old (typically 10 years or older).
  • Your vehicle has a branded title (salvage or rebuilt).
  • Your vehicle had multiple previous accidents with greater damage.
  • Your vehicle was declared a total loss.
  • The statute of limitations has lapsed.

What Should I Do Next?

Since diminished value claims on leased vehicles fall into a gray area, the best course of action is to contact a licensed car appraiser. Every appraiser offers a free claim review, allowing them to closely evaluate your specific case and determine if your claim is worth pursuing.

If you’re curious, click the link below for a free claim review, and we guarantee:

  • No commitment – Just honest advice.
  • Save time – Avoid chasing a claim that won’t succeed.
  • Get expert guidance – Know your options before making a decision.

👉 Free Claim Review

Conclusion

While pursuing a diminished value claim on a leased vehicle isn’t always straightforward, it’s not impossible. The key is understanding your lease agreement, your state’s laws, and whether your situation qualifies for compensation.

Most lessees don’t realize they might be responsible for the car’s reduced resale value after an accident. If your lease agreement includes financial penalties, or if you plan to buy, sell, or trade in the vehicle before the lease expires, you could have a valid claim.

However, since these cases fall into a gray area, getting professional guidance is essential. A licensed auto appraiser can review your case for free, saving you time and ensuring you don’t chase a claim that won’t succeed.

If you’ve been in an accident with a leased vehicle, don’t leave money on the table. Click below for a free claim review and find out if you’re eligible for compensation—with no commitment and no risk.