What Happens If You Crash a Leased Vehicle?

The process of handling things when you crash a leased vehicle a bit different from when you own or finance a car. Typically, you want to take the following three steps when involved in a car accident with a leased vehicle.

  • Call your insurance company.
  • Notify the dealer or leasing company.
  • Document damage and get an estimate on repair costs.

Call Your Insurance Company

Like any other car accident, calling your insurance company is your first step. Report the accident to the insurer, but do not agree to a recorded statement until you speak with S. Burke Law.

The State of Georgia mandates minimum car insurance coverage. However, leasing a car is a bit different than owning one outright. Leasing companies may require you to carry certain types of insurance beyond the minimum to protect their property in the event of an accident. The leasing company may require you carry collision and comprehensive coverage, for example.

Depending on the type of insurance you have, your deductible determines how much you can receive to repair your vehicle. For example, let us say your car sustained $2,000 worth of damage, and your collision coverage deductible is $300. Your car insurance company will pay the remainder of $1,700 to repair the vehicle.

Notify the Dealer or Leasing Company

Though you’re driving the car every day, you are required to notify whoever you lease from because they own the vehicle.

Even if you are financing your car, you would call your insurance company to notify them that you were in an accident. The insurance company would either send over an adjuster, or you would provide them with an estimate from a body shop.

But in leased vehicle accidents, the leasing company may specify certain requirements to fix the vehicle. In some cases, car dealers will require that the repair be made using the manufacturer’s parts, not secondary parts.

Check with the leasing company or car dealer before you make any repairs, as failing to comply with their requirements could leave you on the hook for penalties for violating the terms of the lease.

Document Damage and Obtain an Estimate on Repair Costs

Once you call your insurance and leasing company, you are ready to document the damage and learn how much repairs cost. In most cases, this is a straightforward process similar to when you repair a vehicle you own outright.

The insurer may deal directly with the party performing the repair, such as the car dealer itself, and provide reimbursement for the repairs directly to the repair company.

Gap Insurance When Your Lease is a Total Loss

Insurance companies may consider a vehicle a total loss if the repair costs exceed a certain percentage of the vehicle’s value. You might find yourself in a precarious situation if there is a gap between the value of the totaled vehicle and what you owe on the lease.

Most leasing companies require you to carry gap insurance as part of the terms of the lease. Gap insurance covers the difference between what the insurance company is willing to pay for a totaled vehicle and the remaining balance on the lease.

Call an Atlanta Attorney Today if You Crash a Leased Vehicle

If you or someone you care about was involved in a car accident with a leased vehicle, we encourage you to speak with a personal injury attorney.

Call S. Burke Law today for legal guidance. Our team can walk you through what to expect with a free consultation. Call us at 404-842-7838 today to schedule your free case review.