Car Accident with a Leased Car: What You Need to Know

Driving a leased car comes with its own set of advantages, such as lower monthly payments and the thrill of driving a new vehicle without the long-term commitment of ownership. However, vehicle accidents can happen to even the most cautious drivers. What happens if you find yourself in the unfortunate situation of crashing a leased car? In this article, we’ll delve into the steps you need to take and the consequences you might face if you crash a leased car.

Aftermath of a Car Accident in a Leased Vehicle

Being involved in a car accident in a leased vehicle can be a stressful and complicated situation. Once the accident has occurred, several steps need to be taken. The first priority is to ensure everyone’s safety and call for medical assistance if necessary. Next, it is important to contact the police to report the accident and provide all the necessary details.

After that, the insurance company should be notified to start the claims process. In the case of a leased vehicle, the insurance company will usually handle the repair costs. However, depending on the terms of the lease agreement, there might be additional fees or penalties to consider for property damage. 

It is crucial to carefully review the lease contract and consult with the car insurance company or the leasing company to understand the financial obligations. Additionally, it may be necessary to inform the leasing company about your accident in a leased car and provide any relevant documentation. Ultimately, dealing with the aftermath of a car accident in a leased vehicle requires thorough communication and coordination between the parties involved to ensure a smooth resolution. 

What Happens if you Crash a Leased Car Gap Insurance and Lease Terms
What Happens if you Total a Leased Car Gap Insurance and Lease Terms

What Happens if you Total a Leased Car? Gap Insurance and Lease Terms

When you lease a car, you enter into a contract that outlines various terms and conditions. These terms often include limitations on mileage, wear and tear, and insurance requirements. Most leasing agreements mandate that you carry comprehensive insurance coverage to protect both the vehicle and the leasing company in the event of an accident.

If you total a leased car, you may still be held responsible for paying off the lease agreement. Most lease contracts include gap insurance, which covers the difference between the car’s value and what you owe. However, gap insurance doesn’t always cover the entire lease agreement balance. You may still need to pay the remaining balance after the insurance company’s payout.

Additionally, if you caused the accident, you may need to pay a deductible and potentially face increased insurance premiums in the future. It is important to carefully review your lease contract and insurance policy to understand the specific terms and conditions in case of a total loss. 

Collision Damage Waiver (CDW)

A critical aspect of your leasing agreement is the Collision Damage Waiver (CDW). This waiver serves as a safeguard against damages that may occur during your lease term. It covers repair costs resulting from accidents, vandalism, or other incidents that lead to damage to the vehicle. However, it’s important to note that CDW is not a substitute for insurance; you’re still required to have adequate insurance coverage.

In essence, CDW can provide peace of mind, as it ensures that you won’t be solely responsible for covering repair expenses resulting from accidents. Nonetheless, comprehensive insurance remains crucial for addressing damages beyond what CDW covers.

Immediate Steps After a Leased Car Accident. Report the Accident, Contact Leasing Company

In the unfortunate event of a crash, safety should be your top priority. If anyone is injured, call emergency services immediately at the accident scene. Once everyone’s safety is ensured, you’ll need to take specific steps to address the situation as it pertains to your leased car.

First and foremost, contact your leasing company and inform them of the accident. They will guide you through the necessary procedures and provide instructions on how to proceed. Additionally, notify your insurance provider to initiate the claims process.

Assessment of Damages in a Crash

After contacting the relevant parties, the next step is to assess the damages. This involves documenting the extent of the damage to your leased car. Take clear photographs of the damage from various angles, as this documentation will be crucial for insurance claims and repair evaluations.

The leasing company or insurance adjuster may require a thorough assessment of the damages to estimate repair costs accurately. It’s essential to cooperate fully during this process to ensure that you receive the necessary support.

Repair Process
Repair Process

Repair Process

Once the damages have been assessed, the repair process can begin. In most cases, the leasing company will collaborate with approved repair facilities to ensure that your vehicle is restored to its pre-accident condition. These repairs are often carried out by professionals who specialize in the make and model of your leased car.

During this time, you might need to rely on alternative transportation. Some leasing agreements offer provisions for rental vehicles during the repair period. Check with your leasing company to understand the options available to you.

Financial Implications for Accidents Involving Leased Cars

The financial implications of crashing a leased car can be significant. While the CDW can cover repair costs, you may still be responsible for various expenses. These could include deductible payments associated with insurance claims, rental car fees, and any charges for damages that exceed the scope of the CDW coverage.

It’s crucial to read your leasing agreement thoroughly and understand the financial responsibilities you might incur. Being informed about potential costs will help you navigate the situation more effectively.

Insurance Claims and Payouts for Auto Accidents

Initiating an insurance claim is a crucial step in addressing the damages to your leased car. Your insurance provider will assess the situation, review the damages, and determine the appropriate payout for repairs. The payout amount is typically based on the estimated cost of repairs minus your insurance deductible.

Insurance payouts enable you to cover repair expenses promptly and restore your leased car to its original condition. Be prepared to provide the necessary documentation, such as accident reports and photographic evidence, to facilitate the claims process.

Lease Agreement Consequences
Lease Agreement Consequences

Lease Agreement Consequences

Crashing a leased car can also have consequences on your lease agreement. If the damages are substantial, you might face penalties or charges outlined in your leasing contract. These charges could include fees for excessive wear and tear, mileage overages, and other lease-related infractions.

It’s essential to consult your leasing agreement or contact your leasing company to understand the potential consequences of the accident on your lease terms.

Continued Lease Obligations

Even while your leased car is undergoing repairs, your lease obligations continue. This means you’ll need to make lease payments as scheduled, regardless of whether you’re able to drive the vehicle. Fulfilling your lease obligations ensures that you remain in compliance with your contract.

Returning a Leased Car After an Accident 

After repairs are completed, you’ll need to prepare your leased car for return according to the terms of your agreement. This involves cleaning the vehicle, addressing any remaining damages, and ensuring that it meets the requirements outlined in the lease agreement.

Upon returning the car, it will undergo an inspection to assess its condition. If there are damages beyond normal wear and tear, you may incur additional charges. By following the guidelines provided by your leasing company, you can minimize the chances of unexpected charges upon return.

Alternatives and Decisions

In some cases, the damages sustained by the leased car might render it a total loss. If this happens, you’ll face decisions regarding the future of your lease agreement. Depending on the terms of your contract, you might have options such as terminating the lease early, purchasing the damaged vehicle, or exploring other solutions provided by your leasing company.

Assessing these alternatives and making an informed decision is crucial for managing the aftermath of a total loss.

Mitigating Risks
Mitigating Risks

Mitigating Risks

While accidents can’t always be prevented, there are steps you can take to mitigate risks and reduce the likelihood of crashes. Practicing safe driving habits, avoiding distractions, and adhering to traffic laws are essential measures for preventing accidents and ensuring your safety on the road.

Contact a Car Accident Attorney if your Leased Car is Totaled. How Can a Car Accident Lawyer Help?

If you crash a leased car, a law firm can help you navigate through the legal process. They can assist you in understanding your rights and obligations under the terms of your lease agreement. The lawyer will also guide you in determining liability for the accident and work towards securing compensation for damages. They will communicate with the insurance companies involved and negotiate on your behalf for any repairs or replacement costs. 

Additionally, a car accident lawyer can provide advice on potential legal consequences and help you make informed decisions throughout the entire legal proceedings. So, if you find yourself involved in a car crash with a leased vehicle, seeking the assistance of a car accident lawyer can greatly benefit you. 


Crashing a leased car is undoubtedly a stressful situation, but being well-prepared can make a significant difference in navigating the aftermath. By understanding your lease terms, insurance coverage, and the steps to take after a crash, you can minimize disruptions and ensure a smoother recovery process. Remember to communicate promptly with your leasing company and insurance provider to receive the support you need.

FAQs On Accident With a Leased Car

Q1: Will my insurance premium increase after an accident with a leased car?

A: In many cases, insurance premiums may increase after an accident, regardless of whether the car is leased or owned. It’s essential to contact your insurance provider for specific information about potential premium changes.

Q2: Can I choose my repair shop for a leased car?

A: Some leasing agreements require repairs to be conducted at approved repair facilities. Check your lease contract or consult your leasing company to understand their policies regarding repair shops.

Q3: What happens if my leased car is deemed a total loss?

A: If your leased car is declared a total loss, you’ll need to consult your leasing company about the steps to take. Depending on your lease agreement, you might have options for terminating the lease early or purchasing the damaged vehicle.

Q4: Can I upgrade to a new leased car if my current one is damaged?

A: Depending on your leasing company’s policies, you might have the option to terminate your current lease and enter into a new lease agreement for a different vehicle. Contact your leasing company for details.

Q5: How can I prevent accidents and crashes with a leased car?

A: Practicing safe driving habits, avoiding distractions, and following traffic laws are key to preventing accidents. Regular vehicle maintenance and being mindful of road conditions can also contribute to safer driving experiences.

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