Owning a car can be a massive hassle, with payments and insurance and the responsibility of actually owning a car. What if there were a way to drive your car without having to own the car at all? That’s what leasing a car means, and it works pretty well, until you get into an accident, and that’s where it stops for most people.
How does an accident affect a car lease? The leased car is not ‘legally yours’ so how does that change things? How do you get a handle on the accident then? The answer is similar to what happens if you crash a rental car. That’s what this article tries to answer, but first, we need to delve deep into a lease.
What Is A Car Lease?
Well, a lease is a form of car financing where you do not buy a car from a dealership. Instead, you rent the leased car for a period of time and make monthly payments on the vehicle in exchange for being allowed to drive it by the dealer. Once the lease period is over, you can either return the vehicle to the dealership or buy out the lease to become the owner of the previously leased car.
How Car Leases Work
Car leases have very low payments, lower than a car loan, but you are only paying for the privilege of driving it. Most lease terms take about 2 to 4 years, and then you can give the car back or purchase it. Car leases are a great way to test out a new vehicle, and it is right for you if you want to drive new vehicles without owning a vehicle for yourself.
What Do You Need For A Car Lease?
Just because you are leasing a car doesn’t mean that you don’t need insurance. If you are leasing your vehicle, you should try and make sure that you have the insurance you need in case accidents do happen. You should have the minimum requirement for a lease in your state, collision coverage to cover you, the coverage outlined in your lease agreement, and gap coverage insurance. It should be enough to cover the value of the vehicle.
If you have that insurance, then you are good to go! Car leases are a win-win for everyone until you get involved in an auto accident, and then not a lot of people know what to do. How do car leases work in a car accident?
Dealing With A Car Accident
One of the first things that you need to do is to make sure that you and everyone else involved in the accident were not injured in any way. Make sure you are all safe and then call the police to get them involved. The officers document what happened and should file a report, also determining who caused the accident in a leased car if there is a culprit during the car accidents. The police can work with you and your lawyer to present all the facts of the case without any trouble.
No matter what driver is at fault during the accident, you should talk to the police after the crash and after you ensure that you have no bodily injury.
Talk To The Other Driver
You should also exchange your information with the other driver, and take photos of the damage on the leased car if needed for your own report as it happens. Finally, you should inform both your car’s insurance company and the vehicle leasing company/dealership of this as soon as possible, no matter who was at fault. They need to know about this, and the leasing company should give you more information after your car accident about where to take the vehicle when an accident happens.
If the leased car is damaged during the car accident, you should either take it to a car repair body shop or go and see the claims adjuster from the leasing company who assesses the damage of the vehicle. Finally, call a lawyer and think about taking a free consultation to defend your claim. The law is on your side with this, and you need to defend your claim.
Keep Track Of Your Lease and Leasing Company
The next few steps can all be dependent on your lease, where once the damage of the car is assessed, they either declare the car a loss or have it fixed. If the leased vehicle is a total loss, then the insurance company should pay the leasing company for the value of the vehicle. Depending on the terms of your lease, you might still be eligible to pay the remainder of the lease payments. If you have GAP insurance, it could cover this payment for the vehicle lease contract.
Gap Insurance
If the value of the vehicle doesn’t cover the damage taken in the car accidents, and you still have to keep making payments for the rest of the lease, then you might need to use gap coverage to cover the payments. The gap insurance can make up the difference of the lease contract and is used by drivers who don’t want to spend a large amount of money after an accident on the leasing company vehicle.
Taking Care of Damage
If the leased car is only minorly damaged, you should still get the damage and repairs fixed by a body shop before turning the vehicle in. Most leases hold the driver responsible for any damage to the vehicle, so it is important to get it fixed up. The insurance company can recommend a body shop for you, or you need need to find one for yourself. Then the company can make a claim estimate of what the repairs are going to cost from your car accidents, based on the value of the vehicle. Then you should figure out what your insurance company pays for, and what you are going to pay.
Calculating the Payment
The estimate is what the insurance company pays you based on the limit and your deductible. For example, if the vehicle needs $3,000 worth of repairs, and you have a $500 deductible and a $10,000 dollar insurance limit. The total cost is subtracted from your deductible and the company pays $2,500 in repairs for your vehicle. They should contact and notify you about what the insurance looks like before you have to pay.
Now, if the leased car gets totaled beyond repair during the crash, the insurance company can call the car a total loss without making repairs. The insurance company can pay you for the value of your car, and you need to keep paying the leasing company back until the end of the lease.
What If The Accident in A Leased Car Was Not My Fault?
If the leased car accident has been proven to not be your fault by the law, you can still collect insurance from the insurance company on various items depending on how bad leased vehicle accident was. Insurance coverage covers the following items that you might owe.
What Is Covered Under My Insurance Company?
First is the insurance coverage for your medical bills, which can be covered up to 100%. The compensation can cover both ongoing and temporary medical injuries. If the car accident gives you a future disability that needs to be paid with medical bills, the coverage can cover any future payment that the at fault driver pays you too. If they owe you a payment. then you can be sure that they are going to notify you and pay! You may have to contact your insurance company with questions.
If you miss work due to the leased vehicle personal injury, you can also receive a lost wages bonus, and any lost wages can be covered over the long term. Long-term pain and suffering, both emotional and mental can be given a monetary value and then added to your account as well.
After The Leased Car Accident
If the leased car is damaged and totaled beyond all repair, then you are still eligible for all of the lease payments without gap insurance. If the car is drivable, it is typically repaired and then you can drive the leased vehicle again and continue as if the accident never happened. The rules of the lease from the leasing company can continue as normal, and that’s that until the end of the lease agreement.
The other driver might be charged with negligence if it was proven that they caused the accident in a court of law, and they might have to pay for the damages to the car during the accident. The value of the vehicle is going to be taken into account during this report, and that can change what they owe under the law for compensation.
Do I Need An Attorney?
If you are unfamiliar with leased vehicle crashes in general, let alone leased car crashes, then contact a personal injury attorney. They can help you understand your rights and what you owe, help prove negligence from the other driver during the accident in a leased vehicle, and also make sure you can fulfill the rights of your lease even though the leased vehicle is damaged. Most personal injury attorneys offer a free consultation to get you started with their insurance policy and get you on the road to a compensation agreement.
If you feel like you need a free consultation, then start hiring an attorney and get them in your corner as quickly as possible. They’ll be able to help you out, and they can certainly answer the question of how an accident affects a lease?! Typically, hiring an attorney as early as possible is something that you need to do when you have an accident in a leased car. The leasing company can work with you and your attorney to make sure that everyone is happy.
How Does An Accident Affect A Car Lease?
Having a minor or major accident inside of a leased car has no difference from being involved in a car crash inside your owned car. You just need to make sure that you have the correct insurance policy, and that you keep the dealership in the loop as everything goes on. Then you need to understand how the damages to the leasing company are going to be paid for, and talk to our attorneys and call us for a free consultation.
How To Handle A Leased Car Contract
The best way to make sure that you can handle the slight difference between leased car crashes and regular car crashes, is to call a responsible lawyer and have them walk you through the process. We can figure out who pays whom, what you owe, and the cost of getting the vehicle repaired with the different companies.
If you want to lease a car from a leasing company you need to make sure that you are prepared to handle the risk of a crash, as well as what comes from it. Keep all that knowledge and the insurance you need in mind, and pray that you never need to use it!