What to Do if You Crash a Leased Car

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  • What Happens if You Crash a Leased Car?
  • Call Your Insurance Company Right Away
  • Consequences from an Accident with a Leased Car
  • Returning a Leased Car after an Accident
Two weeks after leasing a sparkling new Honda CR-V with all the bells and whistles, a car hit me from behind on a miserable rainy day. Yep, I had a leased car accident, and I immediately went into crazy panic mode. Would my insurance company hit me with reckless driving upcharges even though the accident was not my fault? What about returning a leased car after an accident?
This scenario plays out every day around the U.S. So what happens if you have an accident with a leased car and how will your insurance be affected? Here’s what you need to know.

What Happens if You Crash a Leased Car?

If you have an accident in a leased car, the most important thing is not to panic. Keeping a clear head during situations like this will definitely help. If you are able, pull your vehicle into a safe place to park, far away from traffic—such as in a parking lot. You never want to exit your vehicle in moving traffic. Why? Because oncoming traffic may not spot you until it’s too late.
Now, gather the other driver’s information, including their name, contact information (including phone and email), driver’s license number, and insurance policy information. If there are witnesses present, get their names and contact information as well.
If you are not able to drive the car to a safe spot, stay in the car and call the local police department or 911 in critical situations. Then wait for help to arrive.

Call Your Insurance Company Right Away

Now it’s time to call your insurance company to report the accident. They will ask you all types of questions, including how the accident occurred, details of the cars involved, the other driver’s insurance and contact information, the weather at the time, who was at fault, and other pertinent questions. The more you know about the accident circumstances, the better it will help your auto insurance company and claims adjuster understand the case.
Finally, call your car lease finance company. They will help you find an approved car-repair company, which will then determine the extent of the damage, if your car can be fixed, or you’ll need a new car because it’s a total loss. Your insurance company should pay any repairs needed to fix your vehicle at the body shop if they’ve approved the repairs first. If the vehicle is a loss, it gets a bit more complicated.

Consequences from an Accident with a Leased Car

If your vehicle is a total loss, you either have to pay the difference between what you still owe the leasing company on the vehicle and what it’s worth on the market. However, most likely your lease agreement came with GAP insurance from the lease company, which means the insurance will cover any difference between what you owe and the market value of the vehicle. This is why GAP coverage is so important.
Now we get to the burning question: Will an accident with a leased car raise your insurance rates? The answer is … maybe. Just like with a car you own, if you get into an accident in a leased car, your rates may go up. Insurance companies mainly base this decision on if the accident was your fault, if the cost of the accident was significant, and your accident history.

Returning a Leased Car after an Accident

If your vehicle can be repaired after an accident, you can keep driving it and return it at the end of the lease. But remember that because the leased vehicle was in an accident, its value may be lower. This is called “diminished value.” If your leased vehicle is totaled, the leasing finance company will take possession of the car, and now it’s time for you to shop for a new vehicle!

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