Ogier's demise allows championship rival Thierry Neuville to make up serious ground on the Ford driver although the Belgian struggled to set fast stage times on the opening day. Neuville became the first driver on the road after Ogier exited and suffered with less traction than following drivers.
The Hyundai driver is eighth and almost a minute behind the leader.
Paddon's mistake was costly. He had been in the top three and was demonstrating good pace before he ran wide and hit a rock.
"There is no margin for error in Finland, and so that has proven today," Paddon said.
"We started well and showed some encouraging pace on the opening stages. Then, in SS4, we ran slightly wide on the same corner several other drivers did. Unfortunately, a rock hit back and we broke our suspension. It wasn't a huge amount of damage but enough to end our day prematurely.
"Still, the speed of the car is good and we were competitive; when you go just a tiny bit too fast here in Finland, there can be a heavy price to pay.
"We'll be back under Rally 2 on Saturday."
Standings
Esapekka Lappi (Toyota)
Jari-Matti Latvala (Toyota) +4.4s
Teemu Suninen (Ford) +19.0s
Craig Breen (Citroen) +33.0s
Juho Hanninen (Toyota) +39.1
Mads Ostberg (Ford) +45.0s
Elfyn Evans (Ford) +45.1s
Thierry Neuville (Hyundai) +58.0s