If you’re leasing a car and it gets totaled, you may be concerned about what will happen to the lease.
Will you still have to pay? What happens to the down payment?
For these reasons and more, you must know what happens when you total a leased car. You also need to know how this can affect your leasing ability and what steps you should take after an accident.
What Do We Mean By Totaled Car?
When you total a leased car, it means that the cost of repairing or replacing it is greater than the value of the vehicle. This can happen if your car is damaged in an accident or has mechanical problems that make it uneconomical to repair.
Leased cars can become totaled when they suffer major damage from an accident. This means that the car no longer meets basic safety standards and cannot be driven by anyone.
Who Pays When You Total a Leased Car?
The terms of your lease may state that you’re responsible for the damage caused by an accident or other events that occur during your lease agreement.
If this is true, then you would be on the hook for paying off this damage in full before getting another vehicle from them or another company.
Where Does Gap Insurance Come In?
Gap insurance is a type of car insurance that pays the difference between what you owe on your leased vehicle and what its actual cash value is. It can help protect you against financial hardship if your leased car is totaled or stolen.
However, gap insurance might not be worth the money if you have an older car that isn’t worth much after being totaled.
What To Do if You Total a Leased Car
If you total a leased car, the first thing to do is stop and check for injuries. Both you and your passengers should check each other for injuries before calling 911 or going to an emergency room.
Once you’ve ensured that everyone is okay, call the leasing company immediately with the details of the accident so they can start processing what needs to happen next.
When informing your leasing company about what happened in detail, be sure to mention all parties involved in the accident as well as their names and contact information (including phone numbers).
It’s likely that after talking with their insurance team over the phone, they’ll decide how best they’d like things handled. This is because most accidents are not caused by one person, making things complicated when deciding who is responsible for the damages.
If your lease agreement says that you’re responsible for this type of accident, then you may have to pay for repairs or replacement. That’s why it’s important to hire a car accident lawyer if you’ve totaled a leased car. That way, you can protect your rights and ensure other parties don’t take advantage of you.
If you lease a car, you can’t just turn in the vehicle and walk away when it’s totaled. Even though you’re not the owner of the car, you are still responsible for making payments on it until your lease is up.
If you don’t have collision coverage, there’s only one option — you need to pay off your lease early. This can be expensive if you’ve made several payments or have a lot of time left on your lease.
If you have coverage, your insurance company will pay off the lease instead. Nonetheless, a car accident attorney can help smoothen the process and ensure your rights are protected.