Rather than owning a car, many drivers these days prefer to lease one. Cheaper car payments and a brand new, more expensive vehicle every few years sounds appealing enough, right? What’s more, there are typically lower maintenance expenses because the vehicle is under manufacturer warranty throughout the duration of the lease. These are only a few of the benefits of leasing a car compared to owning one. But what happens if you crash a leased car?
Automobile accidents involving leased cars are comparable to all other types of vehicle accidents in many ways. To begin with, no matter the type of vehicle, traffic accidents are always stressful. There is generally no way around that fact. Further, what happens if you crash a leased car is the same as it would be after any type of vehicle accident. You should still share all relevant information with the other motorist, and you have the right to sue the other driver for monetary damages. However, things can get tricky when insurance companies become involved.
In this post, our Shreveport personal injury attorneys at Gordon & Gordon will explain in detail what happens if you crash a leased car.
What Happens if You Wreck a Leased Car?
When you’re in an accident in a leased vehicle, you should pull over to the side of the road and stay put. If anybody received injuries, contact emergency medical services immediately. You must also follow all regulations regarding police reporting of the accident. As such, call your local police station and request an officer to come file an accident report.
Of course, you must also notify the leasing company and your insurance provider of the accident. From here, you must make a decision regarding the car’s damages. You may either fix it and keep the lease, or you may cancel the lease, depending on the extent of the damage. Your auto insurance policy and gap insurance—if you have it—should cover the losses. Thus, if you are able to fix the car, your insurance company should pay for any necessary repairs, minus your deductible.
What Happens if you Total a Leased Car?
If you total a leased car, you still owe the leasing company the value of that vehicle. When the vehicle is a total loss, your insurance coverage should reimburse you for its current worth. You’ll end the lease when the current value of the car equals the remaining balance of the lease and you break even.
Unfortunately, you will most likely still owe the leasing company money. Gap insurance, on the other hand, could be able to pay the difference. You could also be able to roll the amount into a new lease. Check to see whether you have gap coverage included on your policy if you have an outstanding lease payment following an accident.
Who is Responsible for Damages in a Leased Car Accident?
What happens when you wreck a leased car depends on the extent of the damage, who is responsible for the accident, and your insurance coverage. If another motorist is to blame for the accident, that driver’s insurance company should be liable for the losses. Their insurer would be responsible for paying for your leased car’s repairs or, if totaled, the vehicle’s market value. In this case, the payment would go straight to the leasing company. All additional losses should be reimbursed directly to you, just like any other automobile accident claim when the other motorist was at fault.
However, if the other insurance company denies liability on behalf of the driver, you may need to contact your own insurer to negotiate repairs covered by your policy. Leasing companies require you to have comprehensive and collision coverage, just like a lender would if you bought the vehicle with a loan. If your insurance company covers the repairs, it will file a claim against the other driver’s insurance company if the other motorist was genuinely at fault.
If your leased automobile is wrecked and you weren’t at fault, you also have the right to sue for your losses and obtain reimbursement from the guilty party who caused the accident. Whether you lease or own your car, you have the same right to file a compensation claim, which may be the only way to pay for the damages to your leased car. The Shreveport personal injury attorneys at Gordon & Gordon can help you in filing your claim and obtaining the compensation you deserve after a car accident that is not your fault.
How Does an Accident Affect a Car Lease?
A car lease is not affected by an accident. When you experience an accident, you still owe the leasing company the vehicle’s worth. Repairs, on the other hand, may be covered by your insurance coverage. You may also get gap insurance, which pays the difference if you owe the leasing company the full value of the car.
Turning in a Leased Car with Damage
Some people falsely believe that when it comes to their leased car, any damage will be waived so long as they go into a new lease. However, this is not the case. Regardless of what the dealership tells you, someone will be responsible for the damages, and it won’t be them. Even if you lease another automobile from that dealership, the damage will not be forgiven.
Though you may not have to pay for your damages out of pocket if you lease another car from the same dealership, the tradeoff will be considerably worse. Damages from your previous vehicle will roll into your new lease. As such, you will be responsible for them for the duration of the new lease, as well as paying interest.
The strategy is straightforward: increase the vehicle’s price to compensate for the damage. So instead of getting $2,000 off the invoice, you won’t get an invoice on a car. It may also be that they utilize some of the incentives on the new car lease to pay off the damages on the previous vehicle rather than passing them on to you.
Do You Pay Insurance on a Leased Car?
Whether you buy a car, take out a car loan, or lease a car, you’ll almost certainly be required to purchase car insurance. Although each state has its own set of minimum standards, most states require drivers to have bodily injury and property damage liability insurance. Many states also mandate personal injury protection in addition to uninsured motorist coverage.
When it comes to leased cars, you are typically required to have higher levels of insurance than the legal minimum. As the legal owner of the vehicle, the leasing company will want to safeguard their investment in case of an accident. As a result, you’ll likely need to acquire additional insurance.
This often includes collision insurance, which protects the car in the event of a collision with another vehicle or an object such as a telephone pole or other structure. Comprehensive insurance will also likely be required. This covers losses not caused by an accident, such as those caused by theft or fire. Purchasing a more comprehensive coverage will result in a higher vehicle insurance premium.
See our blog: Is it Illegal to Not Have Car Insurance?
Wondering What To Do After You’ve Crashed a Leased Car? Call Gordon & Gordon Right Away!
If you’ve been involved in a car accident of any kind, including one in a leased vehicle, be sure to contact Gordon & Gordon right away. Our Louisiana car accident attorneys have been helping people in the Shreveport, Bossier, and Mansfield areas for decades, and we can help you too.
If you have any more questions like “What happens if you crash a leased car?” let us help in answering them. Give us a call at 318-716-HELP or send us a message about your case to request a consultation at any of our convenient locations in Northwest Louisiana. If it’s compassionate legal counsel and peace of mind you’re looking for, get Gordon & Gordon today!