What normally happens is your car insurance company will pay for the current value of the vehicle. However, when leasing a car or when buying on finance there is often a gap in between the current value of the vehicle and the remaining cost to lease the car. You will not have to pay additional lease car return charges or excess mileage charges as the leasing company will not be able to resell the car anyway.
Picture this, a year and a half ago you got yourself a set of new wheels. One year and one month in, you're driving to work on a cold morning and you underestimate the black ice. You slide right off the road and into a concrete wall.
You hit the wall with a bang! Airbags go off. You're OK. The wall you've bumped is OK. The Volvo is not OK. This value of the car, right now, is the value your main insurer will pay. The leasing company is the registered keeper of the lease car , so you need to pay them this shortfall.
If you have gap insurance or some other shortfall cover, then they will cover this gap between the current market value and the new car price. If you do not, you might need to dig into your savings or find some other way to come up with the outstanding amount. We cover whether gap insurance is worth it , if you haven't already had your car written off.
Not to mention, if you need a new car, you'll need to take out a lease agreement for a new vehicle and start the whole thing over again, initial rental and all. If your vehicle is deemed a total loss, an insurance company will pay you what they believe the car is worth. If you get into a collision shortly after signing your loan, the amount you owe will be significantly higher than someone who totals their car near the end of their loan agreement.
If you have GAP insurance , you can simply ignore the above. If your car is totaled, you will still be required to make normal lease payments until the claim is settled. From dealing with the insurance company to helping you work through the legal aspects, an experienced lawyer can make sure you receive a fair settlement.
If you have any questions about your car wreck or would like to speak to a lawyer, contact our office today. Home » Blog » Totaled a Leased Car? Everything You Need to Know. Before you sign a contract, you may want to know what happens if you total a leased car. Insuring a Leased Car In the event of a car accident, the first thing most people ask about is insurance. In fact, some leasing companies require additional coverage as part of the lease agreement. Collision Insurance While liability insurance covers other drivers and their vehicles, collision coverage pays for your vehicle.
Gap Coverage Gap coverage is one of the best options for leased vehicles. Leased Car Accident: Determining the Damage Handling an automobile accident is the same for owned and leased cars. Remain at the scene, but move to a safe space if possible.
If you have injuries, call emergency services. Exchange information with the other driver or drivers, including names, phone numbers, registration, and insurance information. Do not apologize or admit fault on the scene. Take notes about what happened and photograph the scene, including damage to people, vehicles, and the area. Gather contact information from any witnesses. Repair or Total the Leased Car?
Determining Fault of Car Wreck One of the key factors in any accident is determining who is at fault or who caused the wreck. Types of Fault in a Car Accident State legislatures put forth laws about car insurance coverage, determining fault, and how to decide when insurance companies pay.
In the United States, there are a few general classifications for determining fault. In no-fault states, drivers have personal injury protection as part of their coverage. It pays for damages whether you are at fault or not. Comparative negligence states vary depending on your level of fault.
In pure negligence states, you would receive no compensation if you caused the accident. How does it work if a Texas driver totals their leased vehicle while on vacation in Michigan? Paying for the Car Accident When you receive the determination about who is at fault, the result will dictate who pays for the damages. Navigating Shared Fault for Car Wreck Shared fault states create complicated situations for everyone involved. Research on your own across reliable sites, like Kelley Blue Book.
Check out local dealers and your leasing company to see what similar cars go for in the area. Local pricing can help or hinder your goal. Track all of the upgrades and special features you have in the vehicle. Pull out receipts from work you had done, recent tune-ups, and even mileage if yours is especially low.
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