Have you crashed your leased car and are wondering what to do? Maybe you were in an accident and didn’t know what to do next? Or perhaps you have taken out a lease for a car and want to know what happens if you crash it? Whatever your reason might be, we have the answer for you!
We know how stressful it can be when you are involved in a car accident. You have a million thoughts racing through your head.
The last thing you want to worry about is making the payments on your leased car or being left carless and still needing to pay the debt. These thoughts can overwhelm us, adding to our stress.
Well, no more! Today we are here to walk you through what happens and what to do if you crash a leased car. Keep reading to find out all you need to know!
What Happens If You Crash A Leased Car?
Let’s get into it! If you crash a leased car, there are a few things you need to do. Let’s take a look at what these are now!
It’s worth noting that this process happens very quickly after an accident. You should be looking to do this immediately after the accident and contact the necessary companies within a few days.
Get The Details
As with any accident, you will need to take the details of others involved in the accident. You will want their name, phone numbers, and insurance details to go forward and make a claim. Regardless of who is at fault, be sure to exchange details.
You should also take photographs of the accident to help an insurance company determine who was at fault.
Visit The Hospital
If needed, you should also visit the hospital. If you have any injuries at all, you will want them documented. This will ensure that you get the compensation you deserve and that your insurance will cover your medical bills if needs be.
Once you have taken care of yourself and any others in the car with you, it’s time to turn your attention to the insurance and the lease company.
Speak To Your Insurance Company
Contact your insurance company and inform them of the accident. You will need to compile all the relevant information such as photographs of the accident, police files, medical information, any estimates from the mechanics of the damage, and the other party’s information.
At that point, your insurance company will handle the claim. You will be asked to take the car to a body shop if you have not already, or the insurance company will arrange this for you.
There the damage to your leased car will be estimated. If you provide your insurance company with an estimate, they might also conduct their own to determine if it is accurate or not.
Don’t worry if this happens; insurance companies all have slightly different policies, but their goal is to determine how much they should payout.
Once the estimation is complete, the insurance company will decide whether or not to undergo the repair work. If the vehicle’s repair cost is higher than the value, or the insurance company deems it too expensive, they will write your car off.
How much an insurance company is willing to pay will depend on the insurance company and the value of your car. No insurance company will pay more than the car is worth to repair it.
If you are not at fault, the bill for the repairs is sent to the other party’s insurance company, who will foot the bill. If your car is written off, it will be valued by your insurance company, and they will then pay you the valuation of the car, usually via cheque or deposited into your bank account.
For those with a deductible on your insurance policy, this will be taken from the car’s valuation, or you will be required to pay it if your car undergoes repairs.
Finally, you also need to let your lease company know that you have had an accident. If the car is repaired, there is usually no issue.
As long as the work restores the car to its original condition, you can continue using your car as normal and return it to the dealership once your lease has ended.
However, if your car is totaled (written off), there can be some complications. As we mentioned earlier, the insurance company will payout, but you still have to make the payments on your lease.
If the valuation is enough, the insurance money can cover the remaining lease payments on the car, allowing you to walk away debt-free.
However, if the money does not cover the entire debt, you must fill the gap and pay the difference yourself.
For many people, this can be an added expense that they cannot afford. Your lender might allow you to spread the payments across monthly installments, allowing you to pay the debt off.
The prospect of paying for a car you no longer own is daunting, but there is a way around it. You can take out gap coverage or gap insurance when you sign the lease. There is usually a timeframe when you have to have the gap coverage by, be sure to check with your lender for this!
The gap insurance will cover the difference needing to be paid in these instances. It’s handy if the car is fairly new when it is totaled, as it will be valued higher, leaving you with more to pay.
Some leasing companies now require you to have gap insurance to prevent issues if your car is totaled. It provides peace of mind for many people and ensures there won’t be a financial burden should their car be totaled.
Some of this can vary from state to state, so be sure to check what the insurance laws are in your state! Be sure any leased vehicle has fully comprehensive insurance to be protected should you be involved in an accident.
And there you have it, a breakdown of what happens if you crash a leased car! Remember to get all the information at the time of the accident where possible and report the accident to both the insurance and leasing company to ensure that you get the money you deserve!