When you own a car, even if it’s financed, the process to follow when your car gets damaged is fairly well-known. You’re responsible for any repairs it requires, and anything left unrepaired will lead to a depreciation in your car’s value and may make you unable to sell it for what you’d like later down the road. The process for filing an insurance claim after an accident is also relatively straightforward on an owned vehicle. But what about damage to a leased car?
While leased vehicles are extremely common— 1 in 4 vehicles on the road are leases— the information about how to manage the day-to-day use of them is less common.
With that in mind, we wanted to create a guide that would help you understand everything you need to know about damage to leased cars. In this article, we’ll answer the following common questions about damage to leased cars and what you’re responsibilities are:
- What Happens When You Damage a Leased Car?
- Who Pays for Repairs on a Leased Vehicle?
- What Should you Do If You Damage a Leased Car?
- What Do You Do If a Leased Car is Written Off?
- How Do You Return a Damaged Leased Car?
- How Do You Dispute Damage Charges on a Leased Car?
We hope that this article will help demystify everything that goes into dealing with damage to a leased car, making the experience less stressful and more straightforward for the many people who drive leased cars every day.
What Happens When You Damage a Leased Car?
Here’s the good news— the process for repairing a damaged leased car isn’t as different from an owned car as you might think.
Companies that lease vehicles expect them to be returned with a normal amount of wear and tear relative to how long you’ve been driving the car. That’s what your monthly lease payment is designed to cover, the depreciation of the vehicle due to you using it over time. But damage beyond normal wear and tear can result in charges at the end of your lease term when you return the vehicle.
If your vehicle is damaged in the event of an accident and is in need of repairs, the process is actually fairly similar to the process you follow when you need to repair a car you own or have financed. That said, there are just a few key points you’ll want to keep in mind when dealing with damage to a leased car.
Who Pays for Repairs on a Leased Vehicle?
Like damage on an owned car, the cost for repairs is your responsibility. That said, if the damage is the result of an accident, your insurance provider should be able to shoulder much of the financial burden depending on the circumstances.
For example, let’s say you’re in an accident with another vehicle resulting in $2,000 worth of damage to your leased vehicle. If your insurance policy has a $500 deductible, you’ll be responsible for $500 of those costs while your insurance provider will cover the remaining $1,500.
The leasing company for your vehicle is not responsible for paying for any repairs to your vehicle due to damage it incurs while you’re driving it.
What to Do If You Damage a Leased Car
If you damage your leased car in an accident or other event, don’t panic. The process you follow isn’t all that different from what you would do if you owned the vehicle yourself. Here are five primary steps you’ll want to follow to ensure that you stay compliant with what’s required and don’t end up with unexpected charges or penalties at the end of your lease term.
Contact Your Insurance Provider
After an accident, the first thing you’ll want to do is contact your insurance provider— assuming that you want them to pay for some of the financial burden of repairs. If the damage is minor and you plan to simply pay for it yourself— which may be the case if the cost of damage is at or near your deductible amount— then you’re not required to contact them.
If you do, give them all the details about the incident. Then your insurance agent will begin the claims process and get you on your way to having your vehicle repaired and back to its previous condition. If the damage is so severe that the cost to repair it would be more than the vehicle’s value, they may write off the vehicle entirely (also known as totalling it), and instead payout the vehicle’s current value to you for a replacement.
Know Your Responsibilities
You may want to take a look at your lease agreement, specifically the area that applies to damage and repairs. Many leasing companies require that you have repairs completed by an authorized business approved by the leasing company. Others will require that no 3rd party parts are used— all new parts must be original manufacturer versions, not off-market replacements.
When in doubt, you can always call your lease provider and ask exactly what your responsibilities are when it comes to having your vehicle repaired after an accident. It’s better to have all the facts before moving forward with repairs on a leased vehicle.
Talk to Your Repairer
Based on what you find out about your responsibility as a lessee, you may want to have a conversation with the authorized repairer you take your vehicle to for repairs. You should let them know that your vehicle is a lease, and alert them to any requirements about how the vehicle must be repaired.
For example, we mentioned earlier how many lease agreements require repairs to be completed with factory original parts, not aftermarket or 3rd-party parts. You’ll want to make sure your repair person is aware of this before beginning repairs. This may make your repairs more expensive, but hopefully you have insurance coverage that will keep you from added financial liability beyond your deductible payment.
As with any vehicle repair, communication is always key.
Have a Pre-Inspection Performed
When the time comes to turn in your vehicle at the end of your lease, you should get a pre-inspection. This will give you advance notice about what damage on your vehicle will be counted against you, and gives you the opportunity to repair it yourself rather than be charged for it by the leasing company. This can save you money in the long run, so don’t neglect this step if you don’t want to be caught with unexpected costs when it comes time to turn in your vehicle.
Negotiate Your Repair Bills
Always remember that when it comes to leasing a vehicle, everything is negotiable. That even includes the repair bills they hit you with when you turn in your vehicle. All car leasing companies are always trying to protect themselves against losses and maximize their chance for profit, so if they have a chance to charge you for a repair, they’ll take it. You have a right to negotiate these costs, including everything from reducing major costs to eliminating minor charges on things like windshield chips or small scratches on the vehicle.
What Do You Do If a Leased Car is Written Off (Totalled)?
We’ve discussed what happens if your vehicle is damaged and has to be repaired, but what if it’s written off entirely?
In the case of a total write-off, you’ll need to contact your leasing company immediately. Your lease will be automatically ended at that time, and you’ll be required to pay whatever is remaining on your lease agreement. If the payout from your insurance company for the write-off of the vehicle doesn’t cover it, you’ll be financially liable for the remainder. That’s why GAP coverage is recommended for leases, a type of coverage that will cover the difference between what you’re awarded in a write-off and what’s left on your lease agreement.
Conclusion
At Freedom National, we want all of our customers and potential customers to be as informed as possible about car insurance. That’s why we not only offer insurance coverage, but the knowledge base to help you understand everything you need to know about your responsibilities, coverage types, and best ways to keep yourself safe from financial liability— plus fun information about driving in your state.
Once you’re ready to find cheap car insurance that will keep you covered and allow you to easily customize your plan based on your unique needs, head to our page to start your free quote. It takes just a few minutes to enter some basic information and get a custom quote. From there, you can customize your policy so that it has everything you need— and nothing you don’t. We pride ourselves on offering some of the most accessible & affordable car insurance in the country, even for those with a few driving incidents on their record. Get started with Freedom National today.
