What Happens If You Crash a Leased Car?

Leasing a car comes with a lot of perks. But when an accident happens, things can get complicated. If you’ve crashed a leased car, you’ll need to know how it affects your lease and your insurance, as well as whether you’re financially responsible for damages.

So, what happens if you crash a leased vehicle? If the car is repairable, your insurance should cover repair costs. If you total the car, your insurance will pay the leasing company its market value, at which point your lease may or may not end.

If you’ve crashed a leased car, you may be feeling overwhelmed and unsure how to proceed. A Raleigh car accident lawyer can deal with the insurance companies and work to minimize the consequences of the accident.

What Happens If I Crash a Leased Car?

If you crash a leased car, you must report the accident to your insurance company and the leasing company immediately. After that, the car will either be repaired and you’ll continue making your regular payments, or it will be declared a total loss and insurance will pay the leasing company the actual cash value of the vehicle.

Most leases require you to carry full coverage insurance, which means repairs or replacement are usually covered. However, you’ll still need to pay your deductible. Without gap insurance, you could also be responsible for any remaining balance if the insurance payout doesn’t cover what you owe on the lease.

How Does an Accident Affect a Car Lease?

An accident doesn’t automatically end your car’s lease. If the vehicle is repairable, your insurance will typically cover the costs (minus your deductible). The leasing company will want the repairs done at an approved shop, and you’ll still be expected to keep making monthly payments as normal.

Another issue to be aware of is diminished value. Even after repairs, the car may not be worth what it was before the crash. Some lease agreements include provisions that make you responsible for this loss in value, so it’s important to review your contract.

What Happens If You Total Your Leased Car?

If you total a leased car, the insurance company will send the payout directly to the leasing company. That money will go toward paying off the lease balance.

In many cases, the payout will not match what you still owe. Cars depreciate quickly, and your lease balance may be higher than the vehicle’s market value. In this scenario, if you don’t have gap insurance, you’re responsible for paying the difference out of pocket.

Can You Return a Leased Car After an Accident?

If you get into a minor car accident with a leased vehicle, you can’t simply return the damaged car and walk away. The lease is a binding contract, and you’re responsible for repairing the car (or, if it’s totaled, ensuring that the lease is paid off).

Once the car is fixed and safe to drive, you’ll continue making payments. At the end of the lease term, the leasing company may inspect the vehicle more closely for prior accident damage, but as long as the repairs were done properly, you should be able to return it without issue.

What Happens If the Accident Wasn’t My Fault?

If the accident wasn’t your fault, the at–fault driver’s insurance should pay for the damage to your leased vehicle. If the car is totaled, their insurance should pay the vehicle’s current value to the leasing company.

In some cases, your insurer will pay first and then seek reimbursement from the other driver’s insurer. Either way, you’re still responsible for making your lease payments and returning the car in good condition at the end of the lease term.

What Happens If You Crash a Leased Car with No Insurance?

If you crash a leased car without insurance, you’ll be personally liable for all damages, including the repair or replacement of the leased vehicle, damage to other cars or property, and medical expenses. If you can’t cover these costs out of pocket, you could be sued. 

In addition, you could face legal penalties such as fines, points on your license, and even jail time for driving without car insurance. Lastly, since driving while uninsured violates your lease agreement, the leasing company could repossess the car and potentially sue you for remaining lease payments and damages.

Why Hire a Car Accident Lawyer?

Crashing a leased car adds an extra layer of complexity to an already stressful situation. If you find yourself in this situation, a lawyer can help by:

• Reviewing your lease agreement: A lawyer can explain what your contract requires after an accident.
• Dealing with insurance companies: An attorney can negotiate with insurers to make sure you’re not left paying more than you should.
• Handling disputes over fault: If another driver caused the accident, a lawyer can help you prove liability.
• Protecting you financially: An attorney can fight to reduce or eliminate out-of-pocket costs like deductibles or lease balances.

What to Do If You Crash a Leased Car

If you crash a leased car, it’s critical to take the following steps:

1. Call 911: Call the police and file an official crash report.
2. Exchange information: Trade contact and insurance information with the other driver. If any witnesses are present at the scene, obtain their contact information as well.
3. Document everything: Take photos of the vehicles, the accident scene, and any visible injuries.
4. Visit a physician: Get evaluated by a doctor to document your condition after the crash.
5. Notify your insurance company: Give accurate details to your insurer, but avoid speculating or admitting fault.
6. Contact your leasing company: Let your leasing company know about the accident so they can explain your next steps.
7. Talk to a lawyer: Get in touch with a car accident lawyer before speaking about the crash in-depth with the insurance company.

Consult a Car Accident Lawyer Today

Crashing a leased car can create unique challenges. If you’ve gotten into an accident with your leased vehicle, a car accident lawyer from Whitley Law Firm can step in to defend your rights, deal with the insurance company, and help you avoid paying more than you should.

Schedule a free case evaluation to discuss your situation today.