In the first rally of 2017, the 2017 Monte Carlo Rally, Paddon crashed out on the first stage, losing control of his Hyundai. A spectator was killed in the incident having been hit by the right rear of Paddon's car. Although Paddon's car was not severely damaged and could have continued, the Hyundai team withdrew Paddon from the rally as a mark of respect. Prior to round 6 in Portugal, Paddon's long-time co-driver John Kennard decided to retire through injury, and he was replaced by Briton Sebastian Marshall. Overall, Paddon endured a frustrating season, picking up just two podiums in Poland and Australia. He led round 7 in Italy, until retiring late on day 2 after hitting a bank and breaking his right rear suspension.