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What to do if You Have an Accident in a Leased Vehicle

by Bianca Garrison - January 6, 2020
Hands taking a picture of a car accident with a smartphone

Being in a car accident can be a scary and stressful situation. Dealing with injuries, damage to cars or property, and the other driver can be a lot to handle. You may already be shaken up, angry, and frustrated. These feelings can be heightened when driving a leased vehicle. 

Leasing a vehicle is an excellent alternative to buying. Drivers can lease newer models for less than the cost of buying without worrying about vehicle maintenance or committing to one car for the next ten or so years. But leasing a car comes with rules. Learn more about what you should do if you are ever in a car accident in a leased vehicle. 

What is a Leased Vehicle?

First, let’s explain what a leased vehicle is, so this article makes more sense. Leasing a car allows you to “rent” a car from a dealership for a certain length of time and amount of miles. You make monthly payments and at the end of the lease, you either return the vehicle to the dealership or buy out the lease if that is an option. Leases usually have lower monthly payments than a car loan. 

People who don’t want to own a car, or want to keep trying a new car every few years will usually lease. The lease terms can last anywhere from two to four years. 

Car Accident in a Leased Vehicle

If you are ever in a car accident in a leased car, you will follow some of the same steps as if you owned the car. 

-Call the police a file a report

-Call your insurance company

-Use your phone to capture relevant photos and videos

-Write down everything. Time of accident, if there are any witnesses, any minor or major damage, weather conditions, etc. 

-Call your lease finance company.

-Exchange information with the other drivers

Leased Car Insurance Claims

Initiating a claim for vehicle damage involves the same process as if you owned your car. In addition to contacting your insurance company and the lease financing company,  you will also contact the other driver’s insurance company and notify them of the car accident. The insurance company will either accept the claim or dispute it. If the claim is accepted, they will direct you to get estimates for the repair of the vehicle damage and ultimately authorize you to have your car repaired. The insurance company will usually send the check to the leasing company.

Be sure to give the insurance company everything they ask for to make sure the claim process goes smoothly. 

Another option is to have your car repaired under the collision coverage of your insurance policy. 

Insurance for Leased Cars

In addition to having the minimum liability insurance required by your state, you should also add gap coverage and collision coverage. 

Gap insurance is optional coverage for newer cars that can be added to your collision coverage. It stands for “guaranteed asset protection,” and it pays the difference between what you owe on your car and what it’s worth at the time of an accident.

How To Buy Gap Insurance

There are three main ways to buy gap insurance:

  • From your car insurance company as part of your regular insurance payment
  • With a one-time fee through the dealership or lender, which may be rolled into your loan payments
  • In a one-time fee through a company that sells only gap insurance

Some insurance companies sell gap coverage that is not part of an auto policy, but as part of a loan or lease. Contact your insurance company or car dealership for more information. 

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