what happens if you total a leased car

What Happens if you Crash a Leased Car

Leasing is the most cost-effective and hassle-free method to obtain a new vehicle and is a widely used service among consumers. Let’s look at what leasing a vehicle means and what should happen if you were to crash a leased car.

What is a Leased Vehicle?

Leasing a vehicle is a common form of vehicle finance that enables you to “rent” a vehicle from a dealership for a set period and several miles. Once the period ends, the lease ends.  The maintenance expenses are typically lower as the vehicle is under manufacturer warranty throughout the lease. When leasing a vehicle, you are required to pay a deposit, followed by regular monthly payments for a set period, normally two or three years. These payments are typically less per month compared to other forms of vehicle finance.

But what happens when you are in an accident? How does the fact that the leased vehicle is not “legally yours” change your liability after the situation?

if you total a leased car what happens

What Happens If You Crash a Leased Vehicle?

When your lease vehicle is totaled or damaged in a crash, the vehicle is transported to a body shop for an inspection. The mechanic will draft an estimate of the cost of repairs. The insurance company scrutinizes the report and determines whether to approve the repairs or if the leased vehicle should be written off.

How to Get Compensation After a Leased Vehicle Accident?

You can either utilize your insurance to settle the outstanding debt owed to the leasing company or pay it with your own money. If you have GAP insurance, your insurer will pay the difference between the market value payout and the remaining balance on your lease.

You won’t likely receive any compensation if you total a leased vehicle in an accident. There are a few exceptions to this rule, but in general, if your rented vehicle is totaled, you are still liable for the lease’s outstanding balance.

Who is Responsible for Damages in a Leased Vehicle Accident?

You will be responsible for paying for any repair work or the excess on your insurance policy if your insurer covers it unless you are in an accident where another motorist was at fault and caused damage to your vehicle.

Do I Have To Report an Accident on a Leased Vehicle?

Yes, you are required to report an accident to your leasing company as well as the insurance company. It is important that you familiarize yourself with your leasing contract and understand the terms and conditions. Failure to report the accident could result in penalties and additional costs. The leasing company may have requirements for the repairs, which is one of the reasons it is crucial to report the accident.

Remain on the scene and wait for the police to file a police report and gather information, such as photographs of the accident and contact details of those involved as well as eyewitnesses.

What If the Accident in the Leased Vehicle Was Not My Fault?

What transpires in the event of an accident involving a leased vehicle depends on the degree of the damage, who caused the collision, and your insurance coverage. If the other motorist caused the accident, that driver’s insurance company should be liable for the losses and is responsible for paying your insurance claim for the repairs or the vehicle’s market value if totaled.

If the other insurance company disputes fault, you should get in touch with your insurance company to discuss repairs covered by your insurance policy.

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Frequently Asked Questions (FAQs) – Leased Vehicle Crashes

What Happens if You Total a Leased Vehicle?

The leasing firm will ask for the remaining lease payments if an auto accident results in the entire loss of your leased vehicle. Up to the policy limits, the liability coverage from your auto insurance will cover this. However, the only amount your insurance will pay out is for the vehicle’s fair market value.

Who Can Repair a Leased Vehicle?

You will have to contact your lease company to provide you with the list of approved garages before booking and paying for repairs.

Does an Accident Affect a Vehicle Lease?

When your vehicle lease expires, the leasing company will inspect the vehicle. If you had an accident and paid for the repairs -either out of pocket or with the help of your insurance provider- the leasing company can still penalize you for the accident. The leasing company may charge you for the new repairs if they decide that the repairs were not performed properly and that they should be redone.


Have you been in an accident with a leased vehicle or wondering how to receive fair compensation? Schedule your consultation with Coluccio Law today to obtain a free consultation.

The legal experience of Coluccio Law allows us to handle even the most difficult accident claims.

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