Leasing is a popular alternative to purchasing. It is frequently considered for people who are just starting out, need an occasional vehicle, or want to trade up to newer models regularly.
It is important to know the nuances of leasing before you sign on the dotted line. One important factor is knowing how an accident affects a car lease.
If you have been involved in a car accident in a leased vehicle, you will need the assistance of an experienced car accident attorney. Lytal, Reiter, Smith, Ivey & Fronrath can assist you in handling the complicated processes of proving fault, determining damages, and liaising with insurance companies to get what you’re owed.
Contact us today for a free, no-obligation consultation.
What is a leased car?
A car lease is a contract where the lessee purchases the right to use a car for a set period of time in exchange for monthly payments. These payments are a percentage of the vehicle’s worth as determined before the lease agreement is made.
The lessee also assumes responsibility for maintenance, insurance, and repairs.
Unlike buying a car with a loan, your payments will not result in you owning the car at the end of your contract. At the end of the lease period (typically three years), the vehicle must be returned to the lessor or it may be purchased by the lessee with an agreed-upon price.
There are many pros and cons to leasing a vehicle.
Some people choose to lease cars to avoid long-term maintenance of a vehicle. Others enjoy getting new car models regularly to keep up with modern updates and fuel efficiency.
However, leased cars can prove costly for individuals who get in accidents.
What to Do After a Car Accident
Step 1: Report the car accident to the police.
Step 2: Exchange contact information with other drivers.
Step 3: Take photos of your car and the surrounding area.
Step 4: Collect the contact information of any witnesses that may be able to provide their own account of what happened, including license plate numbers, if applicable.
Step 5: Check for any visible damage to your vehicle. If there is damage, take photos.
Step 6: Contact your insurance company to file a claim for your property damage and bodily injury or property damage only.
How a Car Accident Affects Your Car Lease
Car accidents can be expensive for both drivers and car owners. If someone has an accident while leasing a car, it can be even more costly.
The general consensus is that if you are leasing a car, you should have an insurance policy to cover any damage or injuries that occur during an accident for which you may be liable. If liability is not shared, then it will always fall on the leaseholder to cover all costs of damage to their leased vehicle.
When you are leasing a car, your insurance company may have some obligations to cover the damages, but it also depends on the extent of the damage.
If You Can Repair the Damage
If you have been in a car accident with a leased car, contact your insurance company and the lessor. They may require you to use a specific body shop for repairs.
Your insurance company will limit what they will pay you to help repair the vehicle. This amount will be impacted by your deductible.
For example, if you are in an accident that requires $3,000 worth of repairs to your vehicle, you need to ensure that your insurance policy limit is greater than $3,000. However, you will still have to pay your deductible.
If the Car Is Totaled
If your leased vehicle is totaled or needs to be written off due to the damage, this means that it costs more than 65% of the vehicle’s value to do the repairs. The insurance company will typically make this judgment based on their valuations of repair costs and the car’s worth.
In this case, your insurance company will pay you the value of your car’s worth up to your insurance limit, minus your deductible. However, this could be less than you owe the lessor of the car.
If your insurance company only gives you $5,000, but the car is deemed to be worth $7,000, then you will owe the lessor the additional $2,000 out of pocket.
This means that even though you no longer have the car, you will still need to pay off the remaining lease contract.
What if the other driver is at fault?
If you lease a car and another driver hits it, the insurance of the at-fault driver will cover the damages. This includes both your economic damages for physical issues like medical bills and car repairs and non-economic damages for your emotional pain and suffering.
However, the at-fault driver’s insurance company will likely try to shift the blame onto you to reduce the amount that they need to pay.
You will need to prove fault in order to collect damages from the at-fault driver.
To prove fault, you need to prove negligence. This requires showing that the driver had a duty of care, that they breached that duty, and that their breach caused your damages. This is the same path required for property damage and medical damages.
Contact an Experienced Car Accident Lawyer
If you have been injured in a car accident in a leased car, you need someone on your side. A skilled attorney will help you create an action plan to ensure you get maximum damages. Your lawyer can determine what damages you are eligible to receive, examine your lease to determine who pays for damages, and help you file a car accident lawsuit against the at-fault party.
Lytal, Reiter, Smith, Ivey & Fronrath have decades of experience helping victims like you recover from accidents that weren’t their fault. We know that an accident can dramatically alter your life, but it shouldn’t impact your financial future. Allow us to fight for your rights so you don’t have to suffer for someone else’s mistake.