Car Accidents Involving Leased Cars
If you were injured in an accident while driving a leased car, it could raise a lot of questions. You may wonder who is responsible for the cost of damages and what does it mean when claiming compensation.
Although much of the recovery process will be the same as any other car accident, specific nuances for leased cars make it beneficial to have an experienced Las Vegas car accident lawyer on your side. Here are some important considerations for vehicle accidents involving leased cars.
Table of Contents
- What Is a Leased Vehicle?
- What Happens If You Crash a Leased Car?
- Who Is Responsible for Repairs on a Leased Car After an Accident?
- What Happens When You Total a Leased Car?
- What Car Insurance Should You Have When Driving a Leased Car?
- How Does an Accident Affect a Car Lease?
- What Kind of Damage Is Acceptable on a Lease Car?
- What Happens If You Don’t Return Your Leased Car?
- Do You Need a Lawyer for a Car Crash in a Leased Vehicle?
What Is a Leased Vehicle?
A leased vehicle is a long-term car rental. You make a monthly payment in exchange for using a vehicle for a set period of time. When the lease is up, you return the car to the leasing company.
Leasing a vehicle is different than buying a car with a loan. When you buy a car with a loan, you make monthly payments on the loan until you own the vehicle outright. With a lease, you don’t own the car at the end of your lease. Instead, you return the vehicle to the leasing company.
What Happens If You Crash a Leased Car?
If you crash a leased car, you must inform the leasing company of the collision, in addition to your insurance company, when making a claim. As a victim, you may be able to bring a legal claim for compensation for your injuries and other damages.
The steps you should take after a car accident in a leased vehicle are much the same as any other car accident. These steps include the following:
- Check for injuries and call for medical aid if needed
- Collect information from the other parties involved
- Call the police to make a report
- Take pictures of the accident scene and any damage
- Get contact info from accident witnesses
After you notify the insurance and leasing companies of the accident, you typically take the vehicle to a body shop for a repair estimate. The insurance company looks at the damage to make an estimate of the repair costs. That estimate is typically what the insurance company pays you up to the limits of your policy.
Who Is Responsible for Repairs on a Leased Car After an Accident?
If another driver causes the accident, you have a right to compensation for your damages. Your losses include the damage to your leased vehicle and compensation for any physical injuries and other economic and non-economic damages.
In Nevada, the driver that causes the accident has to pay for the damages. You may bring a claim against the other driver and their insurance company to cover medical bills, lost wages, pain and suffering, and other losses.
What Happens When You Total a Leased Car?
In Nevada, when the cost of repairs to your leased vehicle exceed 65% of the car’s current market value, the insurance company will most likely declare the vehicle a total loss. Your insurance will pay you for actual value of the car. However, you still owe the outstanding balance on your lease agreement.
In the majority of cases in which a leased car is totaled, the fair market value of the vehicle is less than what you still owe to the leasing company. When this happens, you are still required to pay the difference according to the terms in the lease.
What Car Insurance Should You Have When Driving a Leased Car?
When your leased car is totaled, guaranteed asset protection (GAP) insurance coverage is one way to protect yourself from having to pay out of pocket for the difference of what the insurance paid you and what you still owe. The leasing company will usually also require collision and comprehensive auto insurance, which can help cover the costs associated with a car accident.
In addition to recommended GAP coverage, you should also have minimum insurance requirements in Nevada of:
- Bodily injury insurance per person
- Bodily injury insurance per accident
- Property damage insurance
How Does an Accident Affect a Car Lease?
If you were involved in a car accident in a leased vehicle, it does not affect the terms of your lease agreement. You will still owe the leasing company for the remaining payments whether the accident was your fault or not.
However, depending on what type of insurance coverage you have (such as GAP insurance), your policy may cover the cost of repairs or the remaining value of your vehicle if the car is a total loss.
What Kind of Damage Is Acceptable on a Lease Car?
When you lease a car, normal wear and tear is expected throughout the lease term. Refer to your lease contract for the specific details on what is considered normal wear and tear for your leased vehicle. This may include:
- Minor scratches or dings (generally smaller than the size of a quarter)
- Typical tire wear
- Typical break wear
- Removable stains on the rugs or interior
Returning a leased car with damage can be costly. If the damage is excessive wear and tear, such as the damage that can occur from a crash, you are responsible for the cost of repairs. Before returning a leased car after an accident, it should be in an acceptable condition or you will have to pay the leasing company for the damage.
If the vehicle repair costs are high, you have a few options.
- Buy Out the Lease. If your insurance won’t cover the repairs and you prefer to not pay for the damage out of pocket, you may have the option of buying the vehicle at the end of the lease.
- Rollover the Damage Cost to Your Next Lease. You may also be able to roll the cost over to your next lease in some cases. It depends on the terms of your original agreement.
- Legally Claim Compensation. If you were in an accident that was not your fault, you may be able to bring a legal claim for compensation. Unfortunately, the insurance companies will pay less than victims deserve in many cases. By filing a legal claim, you can fight for fair payment for the damage to your leased car—in addition to your personal injuries and suffering.
What Happens If You Don’t Return Your Leased Car?
If you fail to return the leased vehicle by the contract expiration date, you are defaulting on your lease and there could be significant consequences. The car may be repossessed, which will have a negative impact on your credit score. You will also have penalty fees from the leasing company.
Although most companies offer a grace period for you to return the leased car, it’s crucial that you take action. You can try to negotiate an extension on your lease or choose to purchase your leased vehicle to avoid penalties.
Do You Need a Lawyer for a Car Crash in a Leased Vehicle?
Car accident claims involving leased vehicles can be complex for several reasons. Working with an experienced auto accident attorney can ensure you get the compensation you deserve and are treated fairly by the insurance and leasing companies.
If you need strong legal representation to fight for your rights after a leased car accident, contact our Las Vegas personal injury attorneys for a free case evaluation. We’re ready to fight for justice and get you the financial support you need now.