What Happens When You’re In An Accident In A Leased Car?

In many ways, a car accident in a leased vehicle is not treated that much different than if you owned the car outright. There are a few things that do make it a bit of a different case, however. For instance, if you are at fault, then it’s like any other accident in which you have to worry about a personal injury lawyer getting involved that has had settlements in the millions.

When you are not at fault, then you can make a claim just as you would in any other situation.

The problems lie in dealing with the dealership that leased you the car and the financing company that loaned you the money. This is going to be a bit different than if you owned the car outright. In this article, I will go over everything you need to know about what happens if you get into an accident in a leased car.

Is the lease affected?

When you are in a car accident in a leased car, you still have to pay the remainder of the lease as if nothing happened. The lease itself has not changed at all. Where it gets dicey is when you have payments left to make and your car is totaled, but we will get into that more later.

What this means is that you still have a contract with X amount of dollars left to pay on it and that hasn’t changed. You can’t get out of your payments left if you have been in an accident even if it isn’t your fault.

Now, if you’re at fault and still owe money on the car then you will have to pay off the rest no matter what. There is a thing called gap insurance that you can pay for that will help cover all of the payments or at least a portion depending on your coverage. Gap insurance isn’t a requirement to lease a car and many people don’t end up taking it on.

It is helpful to have in this situation, however, especially if the car is declared a total loss.

What about damage to the car?

If the car is damaged but not totaled then the damage to it will have to be reported to the lease company. In fact, any accident needs to be reported regardless of how much damage is done and who is at fault.

In this situation, the repairs to the car should be paid for by the insurance company of the other driver if they are at fault. Make sure to coordinate with the dealership as they may have certain requirements for how the repairs are done so that the car can be returned in the same condition as when you took it off of the lot.

When you’re at fault, then you have to pay the repairs out of pocket so that the car is not damaged when you bring it back at the end of your lease.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes