What Happens If You Crash a Leased Car?

Read time: 4 minutes

We really hope you’re reading this out of pure curiosity. But if What if I crash my leased car? isn't a hypothetical question for you, hang in there — we’ve got you covered.

Getting into an accident is a stressful experience in any circumstance. But it can be even more complicated when you're driving a leased car. If you find yourself in this situation, it's essential to understand what happens next and how it can affect your lease agreement.

Here's a guide to help you navigate the aftermath of a leased car accident, including what happens next and how it can affect your lease agreement.

1. Contact emergency services.

Let’s say you just got into an accident in your leased car.

First, check yourself and any other passengers or drivers involved for injury.

If there are injuries or significant damage, call emergency services, including medical assistance, immediately. They will help ensure everyone's safety and provide assistance as needed.

Be sure to obtain a copy of the police report, as it will be required when filing an insurance claim.

2. Assess damage and collect information.

The next step after a car accident is to assess the damage to your leased vehicle.

Take photos and videos of the crash site, including the vehicles, any visible damages, and the surrounding area. Make sure to exchange insurance information with the other driver(s), if applicable.

This documentation will be essential when dealing with insurance and your leasing company.

3. Review your lease agreement and communicate with the leasing company.

We’re walking you through the general steps of this process, but make sure to consult your lease agreement and check with your dealership to confirm their exact instructions.

Most lease agreements require that you report an incident in the vehicle shortly after the accident (usually 24-48 hours). They will require information about the accident, including the extent of the damage and your plan to contant insurance.

It's crucial to review your lease agreement to understand your obligations in the event of an accident. Most lease agreements require you to maintain comprehensive and collision insurance coverage, which can help cover the cost of repairs or the value of the vehicle in the event of a total loss.

However, you may still be responsible for any remaining lease payments and fees.

4. Notify your insurance company.

The next step is to notify your insurance company about the accident. Provide them with all the necessary details, including the date, time, and location of the accident, as well as the extent of the damage.

Your insurance company will guide you through the claims process and provide instructions on how to proceed. Handle this as you normally would with any car —  just make sure to provide any information about the lease as requested.

Depending on the insurance company’s assessment, you may be responsible for arranging any repairs to the car. If it’s not considered a total loss, you’ll need to get the car repaired through a shop that your dealership or lease agreement approves. This is super important — although it may be more of a pain to work within these constraints, if you don’t go by-the-book you may be charged for the damage/repairs again at the end of your lease as well.

What happens if you total a leased car?

If your leased vehicle is deemed a total loss, you may be responsible for the difference between the vehicle's value and the amount owed on the lease (any payments remaining for the lease term). This is known as the "gap" amount, and it can be significant.

But if you have the right coverage, it may not be as bad as it sounds (If you’re one of the lucky people reading this for fun, pay attention here for future reference!).

When you leased your car, you were likely required — or encouraged — to get GAP insurance. If your car is totaled, GAP insurance is what’ll save you. 

Guaranteed Asset Protection (GAP) insurance covers the difference between what you may owe on the car and its current value if your car is totaled. It picks up where regular insurance plans stop coverage. 

Read More: What You Need to Know About VSC and Gap Coverage

After an accident, consider your end-of-lease options. 

Hopefully you can find time to take some deep breaths as you navigate this event. You’re not the first person with a leased car to be involved in a crash. Truthfully — unlike some other aspects of leasing — managing a crash with a leased car isn’t that much more complicated than dealing with a crash in a car you own.

Manufacturers, dealerships, and insurance companies like to have their bases covered, and they know things like this will happen. Luckily for you, this means the procedure for handling a crash in your leased car should be clearly mapped out.

How does an accident affect a car lease?

In many ways, it really doesn’t. If the car is repairable, you’ll need to get it fixed in accordance with dealership/lease agreement guidelines as you would a self-owned or financed car.

If it’s totaled, you’ll need to either utilize your GAP insurance or keep paying the remaining lease payments. Any payout covering the vehicle would go to the lienholder, since they technically own the vehicle, but anything beyond that (i.e. to cover medical bills if you were injured) would go to you.

Basically, you’ll need to handle it like a crash in a car you own, just with a few extra steps to make sure you’re in line with your agreement.

Consider buying out your vehicle after a crash.

Even if you deal with your crash by-the-book, you may still be nervous about your impending lease turn-in.

Maybe there’s a few remaining dents and dings on the car that you’re worried will cost you in wear-and-tear fees.

Or maybe you went ahead and got your car repaired before you knew your lease agreement had restrictions.

Don’t sweat it. If you buy your car out with Lease End, you can end your lease and keep the car without the hassle of a dealership inspection (and any associated lease-end dealership fees). Seriously — since you’re keeping the vehicle for yourself, no inspection is required to buy your car out with Lease End.

Read More: How the Lease End Process Works

If you'd prefer to start the buyout process online, enter your license plate or VIN number below: