update: They took the car back & put me in the higher trim for the same price, nothing out of pocket
if body work will pass inspection (I assume it would since you purchased it) and you otherwise happy with the car, just milk them and improve your TCO.
That’s the nice part of leases - no diminishing values.
Not sure how Lemon Law works in your state, but in CA, replacement is an option if you swapped cars now and that turns out to be a Lemon (for concerns about losing $7500 EV incentive for future car).
I don’t know NJ law, but a lemon case usually applies to manufacturing defects. An issue caused by a collision repair is not a defect, so Toyota is under no obligation to buy it back. Any case is you versus the dealer, which is what is happening now. Now if this is covered by a lemon case, then you can most likely do a collateral swap, where they just switch the VIN on the contract. Everything else remains the same.
If the dealer is letting you out of the car now, that is the route I would go. A lemon case will take months and is no gaurantee. You can also ask them for an alignment and compensation.
You have all the leverage. ENJOY!
THANK YOU FOR YOUR ATTENTION TO THIS MATTER!
If the dealer can make sure everything is now installed correctly, I’d just take the monthly payments but counter their offer (have them add another month or two?)
Since it’s a lease I wouldn’t sweat the body work too much if it’s just cosmetic since they are giving you a deal to compensate. If you purchased that would be a different story.
You’re making the problem bigger than it needs to be. Focus on this lease — after all you leased a depreciation anchor from Honda built by GM, if you had any illusions of buying it out (or that it would keep you out of Honda service for 2-3 years).
If you are leasing and returning this Prologue, and you have the one that checks all your boxes - have them put you in a loaner and fix it and figure out a comp at the end. It’s goodwill on a non-warranty repair, treat it like a ex Service Loaner and get the lowest TCO.
If this is going to bother you because it will never be right (it won’t but the repair has no impact on that) then ask them to locate a car you can live with and have them swap it. Don’t expect a penny of comp if you do, but get a new one if that’s all that will make you happy (the new one will have its own issues).
Grab a pry bar and good luck.
I don’t see a big dilemma. Do you want a car with previous damage with a color you love or a car without damage with an ugly color and $1000 on top?
Since it’s a lease, I would take the $$$ and keep the car.
But if you don’t want to do that, you can ask the dealer to DX (dealer exchange) one of their inventory units with another dealer that has a color that you would accept.
But if you can get Toyota to buy back the Honda dealer’s Prologue, I would be really impressed. 
Knowing the above already, the bigger question aside from the color, return, swap it out, TCO, etc: what made you want to lease a Prologue to begin with?
Rolled in some crazy negative (2022 Tesla victim) and still lowered my payment by hundreds! Not to mention better range and features
Bow tie has a message for the TCO crew.
Is he wrong though?
Aside from Dougie Fresh’s take that customers on LH are somehow hurting the Mercedes brand and de-valuing the products through bargain leases… I generally agree with him.
I think he’s exaggerating when he says most people cycle cars every 3 years though. Maybe the luxury brand new car buyers cycle every 3 years. But IIRC the data from vehicle and light truck registrations still has the average duration of ownership for a given vehicle around 6-7 years.
If someone wants to lower their TCO to the absolute lowest possible, they’d just get a bicycle or used shoes from Goodwill and walk everywhere. The problem with reducing costs is that it’s a zero sum game. The maximized solution just converges to zero where you sit there and stare at the wall.
There’s a lot of factors to consider however at the end of the day it really boils down to what your time is worth and what motivates you to keep going. For some people, leasing and swapping out of leases multiple times per year is the play. For most, it’s buying a gently to rough used car and driving it until it’s no longer reasonable to do so.
One thing I do like about LH is how easy it makes getting a new ride.
The absolute pain of trying to get a decent deal on a new vehicle keeps a bunch of folks out of a showroom or dealer purchase. The old franchise dealer model was built on 100 years of bait and switch tactics, high-stress negotiations, and beating people up to extract maximum margins.
LH for the most part is the opposite; basically a bunch of spoon fed deals with zero stress.
Assuming the auto industry at its core is a volume play, being able to get out of an old vehicle and into a fresh ride with zero stress would increase the velocity at which people churn their rides. And they’ll likely be happier as a result since they won’t be in rust bucket 15 year old Toyotas and Hondas.