What Happens If You Wreck a Leased Car?

What Happens If You Wreck a Leased Car?
pexels.com

If you’re ever involved in an accident in a leased car, there are a few very specific things that you need to do. The first step is to call 911, even if it’s a relatively minor accident, you still need to report it to the police. That’s because insurance companies need the police report to resolve disputes about who’s at fault.

The second step is to notify your insurance company. Regardless of who’s fault it is, your insurance company will help you file your claim against the other driver. And if the other driver wasn’t insured or underinsured, your insurance company will pay for the damage, as long as your policy covers such things.

The third step is to notify your lease finance company, especially if the car was declared totaled. Since they definitely would want to know if one of their cars got destroyed and will need to talk to the insurance company.

If the vehicle can be repaired

If your car wasn’t declared totaled and can be repaired, it’s very crucial to have the work done by a professional body shop which has been approved by your insurance company. It’s also helpful if the shop is authorized and recognized as a repair shop for your particular make of the vehicle. Talk to your dealer about finding an authorized shop.

When repairing your vehicle, it needs to be done in a way that restores it to a like-new condition and uses only OEM parts. If you use substandard parts or repair shops, you run the risk of being charged at the end of your lease for any re-repair costs that will be needed to bring your vehicle to an acceptable condition.

If the vehicle is totaled

If the necessary repair costs exceed 70% of the vehicle’s value, that it will be considered a total loss. In this case, the insurance company will pay the market value of the car to your lease finance company.

If you get lucky and your lease buyout balance exceeds the payout from the insurance company, the lease company may possibly refund the difference to you. But this rarely happens with leases.

Majority of the time, the payout from the insurance company is less than the lease balance, which leaves a deficiency that you will be responsible to cover. The good news is that most lease contracts require GAP insurance, which would cover that deficiency.

So where does this leave you?

If your leased vehicle can be repaired and you have the repairs done then proceed with your lease as normal and return the car once the lease ends. There’s one note of caution, however. Whenever a vehicle is involved in an accident, the trade and resale value gets reduced. Sometimes the insurance company may give you or the lease company a “diminished value” payment.

If your leased vehicle is totaled, then your basically left without a car, the same as if you returned your car at the end of a lease. If your car was over the mileage limit when the accident happened then you will still be charged for the extra miles as you normally would at the end of your lease. Might not seem fair to you but the lease company see’s it otherwise.

If you’ll need a replacement car

If the leased car gets totaled and you need another vehicle, you will need to start over with a new car lease or simply buy another car.

Summary

So, if you ever get into an accident in your leased car, first call 911, then your insurance company, and your lease company last. What happens next will largely depend on the severity of the accident, repair costs, and your insurance coverage policy. And it’s possible that you might end up owning more money to the lease company.

Similar Articles

Car accident

Find the right car insurance by learning about coverage types, factors affecting rates, and tips for choosing the best provider while lowering your premiums.

car

Have you ever considered giving your car a fresh look without the hefty dealership bill? A DIY car painting project might be the creative solution you’re searching for. Not only does it offer a cost-effective way to change your car’s color, but it also presents an opportunity to customize your vehicle in a way that truly reflects your style.

14 Essential Tips for a Smooth Car Trip Across the US

Exploring the United States by car is an amazing experience. With so many stunning places to see, from national parks to charming small towns, you’ll want to make the most of your road trip. To ensure your journey is enjoyable and hassle-free, follow these practical tips for traveling around the US by car.

PPF Installation

In as much as one would want to protect the paint of their car, Paint Protection Films (PPFs) are a worthy investment. From the glossy finishes to the satin paint protection film, it is essential to choose the right product and installation. PPF manufacturers offer a range of products to meet the various requirements of the market and consumers

car

DUI is a very serious offense and comes with huge legal and monetary punishments. Besides the major legal hassles, a DUI charge could have a huge implication on your car insurance premium. It is very crucial in managing other financial responsibilities and making plans for the future

car interior cleaning

If you have just passed your driving test with flying colours, your thoughts will naturally be turning to buying your first car. This is a milestone in anyone’s life and a celebration is in order! Once you have done that, you should know that car ownership comes with a price; you are responsible for the vehicle and also any damage that might be caused.

Custom car cover

If you are bored with your old car covers, now time to go with custom car covers. Check out some of the benefits of custom car covers here.

The Many Reasons To Never Get Behind the Wheel Drunk

Driving under the influence of is a serious offense that puts not only the driver's life at risk but also endangers the lives of others on the road. Below, we delve deeper into the ramifications of drunk driving and earnestly discuss why one should never get behind the wheel after consuming.

windscreen sun shades

It costs a lot of money to purchase a car, so once bought, it is extremely wise to look after it and give it the best possible care and attention. It is only sometimes when a vehicle is out of action for some reason that the owner really appreciates its value.