What Happens If You Wreck A Leased Car?

Updated October, 2020
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Wrecking a leased car comes with additional steps compared to if you bought the car. You need to contact the leasing company after the accident. There may also be additional fees and penalties to contend with depending on what kind of insurance coverage you have.

Leasing vs. buying—what's the difference?

In the past, people could really only buy a new car. They could either buy it outright if they had enough money saved up, or they needed to take out a loan.

You pay money every month, and after a set amount of time, you own the vehicle. At that point, you can sell it and keep the profits.

Today, many drivers choose to lease vehicles. With a lease, you essentially "rent" the car. You typically lease a vehicle for three years, and at the end of it, you choose whether to renew the lease or return it at the dealership.

Leases also come with mileage restrictions. Generally, you can only drive between 10,000 and 15,000 miles per year for the duration of the lease.

5 steps to take after getting in a car accident

Whether you bought or leased your car, the process immediately after an accident is the same. You may worry about what this incident means for your lease. Don't worry about that for now.

The most important thing is to remain calm. There are several steps to take in the moments following a crash, and you don't want to overlook a single one.

  1. Check for injuries - Make sure you and everyone else in your vehicle are okay. After that, get out and check on the people in the other car.
  1. Call the police - You want the cops to come to the scene to file a police report. This report is extremely handle when you need to call your insurance provider.
  1. Exchange information - You and the other driver should swap insurance information. It's also recommended to get the other driver's phone number and email address just in case.
  1. Take pictures - With your smartphone, take photos of any damage to either vehicle. You can also document what the weather's like and any other factors that could have contributed to the crash, like a pothole.
  1. Contact your insurance provider - After all this, you need to begin the claims process. Call your auto insurance company and tell them you were just in an accident.

It's essential you contact the leasing company

The steps after a car accident are similar regardless of what your purchasing process was like. However, if you lease your car, then you want to make sure you get in touch with the leasing company.

The reason for this is that this company may have specific steps they want you to take for repairs. Some dealerships don't want you repairing their vehicle with aftermarket components.

There's specific language in your lease agreement about what to do in the event of an accident. Failure to comply with those requirements could result in financial penalties once your lease ends.

Can I still file a claim for damages if I don't own the car?

When you lease a car, you're still required to have the minimum insurance requirements set forth by your state. Your insurance policy should cover most or all of the damages to the vehicle.

The main difference is that the leasing company may have instructions for how to repair the car. You may need to go to a specific shop or even take it into the dealership itself for repairs.

Therefore, you should still file a claim even though you don't technically own the car. You may still be entitled to certain damages if you suffered injuries from the crash.

What happens if I'm determined to be at-fault?

If you are at-fault, then you or your insurance company are responsible for damages. The other driver can file a claim with your insurance agency, and the company typically settles for some amount.

After that, you can expect your insurance rates to increase. Some insurance companies offer accident forgiveness, which keeps your rates the same even if you're responsible for a wreck.

When it comes to a leased vehicle, you're still responsible for making payments even if it was totaled. The insurance generally covers this amount, but there may be certain fees you're still responsible for.

This is why it's good to have guaranteed asset protection (GAP) coverage. Through this, you fulfill your financial obligations to the leasing company. With the right protections, you end up paying little or nothing at all if anything ever happens to the leased vehicle.

Is my insurance good enough to protect me in an accident?

If you're not sure, consider comparing different insurance providers to your own to find out who's able to provide you with the level of protection you need. Don't get caught on unprepared in the life-altering car accident.

Try our easy insurance comparing tool and receive quotes, instantly!

Call an insurance expert
Our team will help you find the lowest insurance prices.
866-996-3156