When you’re driving a leased car it’s easy to forget you have a silent partner operating in the background. However, you do. And further, that car belongs to them — not to you. This means you have a slightly enhanced set of responsibilities vis a vis that automobile.
This is especially true in the event of a crash.
Here’s what to do if you have an accident in your leased car.
1. Contact Law Enforcement
After you’ve made sure everyone is OK, your next call should be to the local police. You’ll need a full report for the insurance company so it can determine who was at fault and proceed accordingly. Call for emergency medical technicians as well If someone is injured.
Refrain from conversation after you’ve inquired about the wellbeing of any other people involved. Do not apologize for any aspect of the situation, even if you know you were at fault. The subsequent investigation might find contributing factors of which you are unaware.
Apologizing immediately, and/or taking responsibility for the accident could force liability upon you — even if it wasn’t your fault. It’s best to just say nothing until you give your statement to the law enforcement officer taking the report.
2. Inform Your Insurance Company
Anyone who understands how leasing a car works knows full insurance coverage is a requirement of the contract. Leasing companies insist upon full coverage, as well as the carrying of the maximum limits of liability. Oddly, though, many people are reluctant to file claims because they feel their rates will increase.
However, failing to report an accident could cause your coverage to be discontinued altogether. Further, if someone else involved in the accident decides to sue, your carrier will be notified, and you’ll have to answer some uncomfortable questions. You pay for the service; use it when you need it.
Provide all pertinent information such as the location of the accident, the names of all parties involved, as well as the makes and models of the vehicles. Do not ascribe nor accept fault for the accident. The insurance company’s investigators will do that.
3. Apprise the Leasing Company
The lessor owns the vehicle and needs to know the car was involved in an accident. There will likely be no financial ramifications, as your insurance will handle all of that. However, the company might have something to say about how the car is repaired.
Leasing companies typically want cars mended using original equipment manufacturer parts to help maintain the value of the automobile. It might also insist a manufacturer-authorized body shop fix it.
Failure to comply with those concerns could find you subjected to substantial fees when you turn the car in. Therefore, the best play is to always get in touch with the leasing company and let them instruct you as to how they’d like you to proceed in terms of getting its car repaired.
4. If the Car Is a Total Loss
In most cases, an insurance company will decline to repair the car if the cost to do so equals or exceeds 65 percent of its actual cash value (ACV). However, this varies from state to state, so it’s a good idea to see what yours requires.
The insurance company will issue a check for the ACV if the vehicle is “totaled.” You’re good to go if this is enough to buy out the lease. You’ll be on the hook for the difference if it isn’t. The good news is most lease contracts require GAP insurance to bridge this divide. Get it before you need it if yours doesn’t.
As you can see, knowing what to do if you have an accident in your leased car can save you from encountering a host of unexpected and potentially substantial expenses.