Leased cars offer a convenient way to drive a new vehicle without the long-term commitment of ownership. However, accidents involving leased cars can be more complex than those with privately owned vehicles.
Whether you were driving a leased car and got into an accident or collided with one, understanding the nuances of liability, insurance, and financial obligations is crucial.
In this article, we’ll explore how accidents involving leased cars differ, the steps to take if you're driving a leased car and crash, and how liability varies based on your situation.
Accidents involving leased cars can play out differently depending on whether you’re the driver of the leased vehicle or another party who collides with one. Leased cars come with unique insurance and contractual requirements that may affect how damages are assessed and paid.
This distinction is important as it influences who bears the financial and legal responsibility, and how the terms of lease agreements might complicate matters further.
When you’re driving a leased car and are involved in an accident, your liability depends on who is determined to be at fault. Lease agreements typically require comprehensive and collision coverage, which should cover damages to the vehicle regardless of fault.
Comprehensive coverage handles non-collision events like theft or natural disasters, while collision coverage pays for damage from accidents. However, these policies often include deductibles or limits that can leave you with out-of-pocket costs.
Additionally, the leasing company may insist on coverage levels that ensure their financial interest in the vehicle is fully protected, highlighting the importance of thoroughly reviewing your lease agreement and insurance policy.
However, additional costs such as deductibles, out-of-pocket repair expenses, or repair costs exceeding the insurance payout might become your responsibility. In such cases, the terms of your lease could demand that you cover any financial gaps to protect the leasing company’s investment.
If you collide with a leased car, your liability insurance may cover the damages to the leased vehicle if you’re at fault. However, the financial stakes can be higher since leased cars often involve stricter repair standards and may be subject to "diminished value" claims.
Diminished value claims arise when a car’s market value decreases due to its accident history, even after being repaired. Leasing companies may pursue such claims more aggressively to recover losses, highlighting the importance of understanding your policy coverage and legal obligations in these situations.
Accidents involving leased cars can play out differently depending on whether you’re the driver of the leased vehicle or another party who collides with one. Leased cars come with unique insurance and contractual requirements that may affect how damages are assessed and paid.
Accidents are stressful. The steps you take immediately afterward can significantly impact your lease agreement, insurance claims, and financial responsibilities.
Breaking down each requirement ensures you handle the situation effectively and comply with all necessary procedures. Here’s a detailed guide:
The first priority after any accident is safety. Move to a safe location if possible, check for injuries, and call emergency services if needed. Notify the police to file an official accident report, as this document will be crucial for insurance claims and resolving liability disputes.
Keep in mind that to ensure safety under the law, you must first stop the vehicle immediately after an accident. This is equally necessary in both single-vehicle and multi-vehicle accidents, and is required under state law. In Missouri, for instance, Mo. Rev. Stat. § 577.060 defines the offense of leaving the scene of an accident.
To ensure safety, you must check to see whether you or any other party involved in the accident has sustained injuries or died. If only property damage has resulted from the accident, state law will likely permit you to move the car to a position where it won’t obstruct traffic.
A good example of this is also Missouri, where, even though leaving the place of an accident without giving necessary information to the police or other party is a crime, Mo. Rev. Stat §§ 304.151 & 304.155 still requires drivers involved in an accident to move their vehicle to not obstruct traffic if it doesn’t cause death or accident.
For injuries, call emergency services no matter how small the injury seems. This is crucial because car accidents notoriously cause hidden injuries that may not become obvious for days or weeks without a proper diagnosis.
Collect as much information as possible at the scene. This includes:
This evidence will help support your claim and protect you in case of disputes.
Leased cars remain the property of the leasing company, so it’s essential to inform them about the accident as soon as possible.
They might request information such as the police report, details about the accident, and your insurance claim number to ensure compliance with the lease agreement and coordinate repairs or replacements.
This step is crucial to avoid penalties and to facilitate a smoother resolution process. They may have specific procedures or requirements for repairs, insurance claims, or replacement vehicles.
File a claim with your auto insurance company promptly. Since lease agreements require comprehensive and collision coverage, your insurer should cover most repair costs, minus your deductible. Provide all the documentation you gathered at the scene to expedite the process.
Leasing companies often stipulate where repairs must be performed to maintain the car’s condition and value. For example, some companies may require repairs to be conducted at authorized or certified facilities to ensure quality standards are met.
Failure to follow these stipulations could result in penalties, such as additional fees or diminished payouts upon returning the vehicle at the lease's end. This requirement helps protect the leasing company’s investment by ensuring the vehicle maintains its resale value.
Ignoring these requirements could result in additional charges at the end of your lease term. Ensure repairs are completed according to the lease agreement’s standards.
Even after repairs, leased cars may lose resale value due to their accident history. Some leasing companies may pursue diminished value claims to recover this loss. Review your lease agreement to understand your obligations and work with your insurance company to address these claims.
In cases where the leased car is declared a total loss, the leasing company will typically use the insurance payout to settle the remaining lease balance.
However, you might be responsible for the difference if the payout doesn’t cover the full amount. Gap insurance, which is sometimes included in lease agreements, can cover this shortfall.
Leased cars come with stricter requirements compared to owned vehicles. Here are some additional considerations:
Understanding the complexities of accidents involving leased cars can help you navigate these situations more effectively and minimize financial and legal risks.
By following the outlined steps and fulfilling your insurance and lease obligations, you can manage the aftermath of an accident with greater confidence.
However, keeping track of all the obligations contained in your lease agreement might still be significantly stressful, especially when you have other things you would rather focus on. This is why you need a car accident lawyer.
In the aftermath of a crash involving a leased car, an experienced car accident lawyer can help mitigate any financial risk the crash may expose you to.
They do this by reviewing every lease agreement to understand your obligations, and then negotiating with either the lease company or the insurance company to make sure you do not have to bear any out-of-pocket costs.
In situations where the insurance or leasing company are unwilling to reach an agreement that works for you, your lawyer may suggest taking the case to court, and subsequently represent you there.
The biggest concern with car accident lawyers, however, is that being able to find one who you can trust to focus on your best interests may be difficult. That is where we, The Accident Helpers, come in.
Through our network of the best car accident lawyers in the country, we can easily connect you to a trusted and experienced lawyer in the city of your accident at no cost to you.
All you have to do is contact us, we get the details of your accident, and we immediately connect you to a lawyer who’s the best fit for you. Remember, our services won’t cost you a dime, so contact us today!