Everything You Need to Know About Car Accidents in Leased Vehicles

Leasing a vehicle may well be the more flexible and cost-effective way to get on the road, but what happens when you are involved in an accident? If you owned the vehicle yourself, you would already know what to do, but how does the fact its owned by the leasing company impact things?

Because situations like this are stressful enough already, we want to make sure that you can get all of the information and guidance you need in one place. Keep reading, and we’ll guide you through everything you need to know if you are involved in a car accident while driving a leased vehicle anywhere in the US.

Always start by contacting the leasing company

When you lease a vehicle, you don’t own it. This means that you have to tell the owner (the leasing company) that there has been damage to their property as soon as possible. In many cases, drivers are involved in accidents through no fault of their own, and this means it’s natural to feel like you don’t have to tell the leasing company.

However, the terms of all leasing agreements will state clearly that it is your responsibility to notify them of the collision, and that’s not just here in the US. Ask a Manchester, UK leasing firm, for example, and you’ll quickly see that this is nothing more than standard practice, and therefore not something to worry about. It will also allow you to ask any question, such as how to rectify the situation, so that you don’t start moving in the wrong direction.

Full insurance coverage is essential at all times

You need to have full coverage that is comprehensive and includes collisions if you’re going to be able to drive your vehicle in accordance with the leasing contract. This is because, as well as being potentially liable for repairing the vehicles of other drivers (depending on the nature of the accident), you could also be held financially responsible for repairing the leased vehicle. In many cases, the leasing company will have a recommended insurer that they can direct you to when you first take out the contract.

There are often restrictions on which body shops you can use

Leasing companies want to protect the long-term value of their assets, and that means they will often specify specific body shops that you can and cannot use. Generally speaking, they will require you to visit an authorized body shop that only uses original equipment manufacturer parts. There are often local body shops that will do things cheaper by using third-party parts, but if the leasing company says that you cannot use them, don’t take the risk.

Totaled vehicles can become costly without GAP insurance

If you are in the unfortunate situation of finding out that the vehicle is totaled and will never get back on the road, the leasing company will want to be compensated for having lost its asset. As a first step, contact your insurance company. They do not pay out what you are paying for the vehicle, but instead, they will pay the current market value of the vehicle. This can be lower than the amount you still owe the leasing company, meaning that it is always a smart move to have GAP insurance in place to cover any potential shortfall.

Accidents that are not your fault still need to be reported

A simple fender bender in a parking lot is something many of us will experience at some point in our lives, and it’s often clear who was at fault. If the other driver admits fault and uses their insurance to cover the costs of the repairs, you might think that it’s the end of the story. The key point to note, however, is that because you don’t own the vehicle, you still have to tell the owner. Informing the leasing company before any repairs are made, regardless of how minor, and who is paying for them, will make sure that you are not breaking the terms of the agreement.

Leasing companies understand the human side of car accidents

The stress and financial impact of a car accident are something that can have a profound impact on your quality of life, especially in more serious cases. While it is natural that many of us would feel like the last thing we want to do during such a time is deal with a pile of paperwork, leasing companies always encourage drivers to reach out and communicate.

Opening up, explaining the situation, and discussing your options is always the best approach to take. Rather than suffering in silence, we always recommend that you get in touch with your leasing company at the earliest practical opportunity. By having someone with years of experience guiding you through the key steps, you can get back on the road before you know it.