The Short Answer:
If you’re in a car accident in a leased vehicle, make sure everyone is safe, check for injuries, call the police, exchange information, notify your insurance, and report the crash to your leasing company. From there, what happens next depends on whether the car is repairable or totaled. You might need to fix the car, use GAP insurance to cover lease obligations, or potentially end the lease early.
Navigating a leased car accident can be confusing and costly without the right guidance. At Lowry Law, our Maine car accident attorneys help protect your rights and financial future.
Key Takeaways
- Notify key parties immediately. You must report the accident to your insurance company and your leasing company without delay.
- Review your lease agreement. Leases often include specific instructions for accidents, repairs, and total losses.
- Insurance pays first, but you may owe more. If the leased car is totaled, your insurer pays the leasing company, but you could still owe more unless you have GAP coverage.
- Fault matters for financial recovery. If you weren’t at fault, you may be able to pursue compensation from the other driver.
- A lawyer can help protect your lease and injury claims. Legal help ensures you don’t pay more than you should or lose out on what you may deserve.
Table of Contents
- Leased Car Basics
- What to Do After an Accident in a Leased Car (7 Steps)
- What Happens If the Leased Car Is Repairable?
- What Happens If the Leased Car Is Totaled?
- What If the Leased Car Accident Was Not Your Fault?
- FAQs About Accidents Involving Leased Cars
- Why You Should Contact a Lawyer After a Leased Car Accident
Leased Car Basics
A leased car is essentially a long-term rental from a dealership or leasing company. You make monthly payments to use the car for a set period, usually 2–4 years. At the end of the lease, you return the vehicle, or sometimes have the option to buy it.
Because you don’t own the car, you’re bound by specific terms in your lease agreement that affect what happens in an accident, who handles repairs, and what insurance you’re required to carry.
Lease Agreements and Accident Responsibilities
Your lease agreement outlines your responsibilities if the leased vehicle is involved in an accident. It may include:
- Accident Reporting Requirements: You may need to notify the leasing company within a specific timeframe.
- Repair Restrictions: Some leases require you to use authorized repair facilities or OEM (original equipment manufacturer) parts.
- Damage Penalties: You may be charged if the car is returned with damage beyond normal wear and tear.
- Early Termination Clauses: If the vehicle is totaled, your lease might be ended early, but you could still owe remaining payments or fees unless covered by GAP insurance.
Failing to follow the leasing agreement could lead to penalties or out-of-pocket costs.
Are You Responsible for Insurance on a Leased Car?
Yes. When you lease a car, you’re required to carry insurance, often with stricter limits than if you financed or owned the vehicle outright. Leases typically require the following types of coverage:
- Liability coverage: Covers damages or injuries you cause to other people or their property in an accident.
- Collision coverage: Pays to repair or replace your leased vehicle if it’s damaged in a crash, regardless of fault.
- Comprehensive coverage: Covers damage from non-collision events like theft, fire, vandalism, or weather-related incidents.
- GAP insurance (possibly): Covers the difference between what you owe on the lease and what your insurer pays if the car is totaled.
Your leasing company is usually listed as the loss payee on your policy. This means if the leased car is totaled, the insurance company pays the leasing company, not you. If the payout is less than what you owe, GAP insurance can protect you from having to cover the remaining balance out of pocket.
What to Do After an Accident in a Leased Car (7 Steps)
If you’re in a car accident with a leased car, take the following actions right away to protect your health, your lease agreement, and your legal rights.
1. Check for Injuries and Call 911
Your safety is always the top priority. Check yourself and others for injuries. If anyone is hurt, call 911 immediately to request medical help.
2. Call the Police
Even for minor accidents, contacting law enforcement ensures an official accident report is created, which is often required by your insurer and leasing company.
3. Exchange Information
Collect the name, contact details, driver’s license number, and insurance info from all involved parties. This information will be needed for your claim.
4. Document the Scene
Take clear photos of all vehicles, any damage, road conditions, skid marks, and nearby signage. This visual evidence can help support your insurance or legal case.
5. Notify Your Insurance Company
Report the accident to your insurer as soon as possible. Delays could complicate or weaken your claim.
6. Inform the Leasing Company
Your lease agreement likely requires you to notify the leasing company after an accident. Failing to do so may result in penalties or violations of your lease terms.
7. Contact a Car Accident Attorney
Before you sign anything or accept a settlement, consult with a car accident attorney, especially if you’re facing injuries, total loss issues, or disputes over fault. At Lowry Law, we help drivers in Maine protect their rights and avoid costly mistakes.
What Happens If the Leased Car Is Repairable?
If the car can be fixed, your insurance (or the other driver’s, if they were at fault) may cover the repairs. But there’s a catch:
- Approved repair shops: Your lease agreement might require you to use certain shops.
- Original parts requirement: Many lease agreements require that only manufacturer-approved parts be used for any repairs, rather than cheaper aftermarket alternatives.
- Inspection: After repairs, your leasing company may inspect the vehicle to confirm it meets return standards.
If the repairs are done correctly, you can usually keep driving the vehicle and continue with your lease.
What Happens If the Leased Car Is Totaled?
If your leased car is totaled, your insurer will typically pay the current market value of the vehicle directly to the leasing company. However, the value may be less than what you still owe on the lease. That’s where GAP insurance comes in.
GAP Insurance Coverage
GAP (Guaranteed Asset Protection) covers the “gap” between what the insurer pays and what you owe on the lease. Some leases include GAP insurance automatically, while others require you to buy it separately.
Without GAP, you could be stuck paying thousands out of pocket, even though you no longer have the car.
What If the Leased Car Accident Was Not Your Fault?
If the leased car accident was not your fault, you may be able to:
- File a claim with the at-fault driver’s insurance.
- Get reimbursed for your deductible and damages, including medical bills.
- Recover lost wages, pain and suffering, and other expenses if you were injured.
Whether or not you were at fault, legal representation ensures your best interests are protected—especially when insurance companies try to lowball settlements or shift blame.
FAQs About Accidents Involving Leased Cars
If you’re involved in an accident with a leased car, ensure everyone is safe, call the police, document the scene, and exchange information. You also have an obligation to notify your leasing company, follow the terms in your lease agreement regarding repairs, and potentially coordinate with your insurer and the lessor to handle damages or total loss scenarios.
You should notify 3 main parties: your insurance company, the police (to get an official accident report), and your leasing company. Your lease agreement often requires notification within a certain timeframe, and failing to report the incident could result in penalties or breach of contract.
In most cases, auto insurance pays for repairs, either through your own coverage or the at-fault driver’s policy if you weren’t responsible. If repairs are required, they must typically be completed at an authorized shop using original manufacturer parts, per lease terms. You may still be responsible for your deductible and any fees for damage beyond “normal wear and tear.”
Yes, you can usually return a leased vehicle after an accident if it has been repaired properly and passes the lessor’s inspection. If the vehicle is not restored to its pre-accident condition or has diminished value, the leasing company may charge repair penalties, diminished value fees, or early termination costs.
When a leased car is declared a total loss, your insurance company typically pays the actual cash value of the vehicle directly to the leasing company. If that amount is less than what you still owe on the lease, GAP insurance—if you have it—can cover the remaining balance. Without GAP coverage, you may be stuck paying out of pocket for the difference.
The leasing company receives the insurance payout since they are the legal owner of the vehicle. You do not receive the check unless there’s a surplus after the lease balance is paid off, which is rare in total loss situations.
In Maine, drivers must carry at least the minimum required coverage:
- $50,000 per person and $100,000 per accident for bodily injury liability
- $25,000 for property damage liability
- Uninsured/underinsured motorist coverage equal to the bodily injury limits
- Medical payments coverage (minimum $2,000 per person)
However, lease agreements usually require full coverage, which includes collision, comprehensive, and possibly GAP insurance, with higher liability limits than state minimums. Always review your lease to ensure you’re meeting both legal and contractual insurance requirements.
Why You Should Contact a Lawyer After a Leased Car Accident
Navigating a car accident in a leased vehicle involves more than just dealing with damage—it’s about protecting your legal rights, financial obligations, and lease responsibilities. If you’re facing high repair costs, injuries, a totaled vehicle, or confusing lease terms, working with a qualified attorney can make all the difference.
At Lowry Law, we provide experienced legal guidance for drivers across Maine who’ve been involved in leased vehicle accidents. We help:
- Handle insurance claims: We deal directly with insurers to help maximize your settlement and minimize delays.
- Pursue full compensation: From medical bills and lost wages to pain and suffering, we ensure all damages are considered.
As a Maine-based firm, our team brings local legal knowledge and a compassionate, client-first approach to every case. We offer:
- Free consultations
- No fees unless we win
- Responsive, personalized support
- In-depth experience with Maine accident and insurance laws
If you’ve been in a leased car accident, don’t try to handle it alone. Contact Lowry Law today to protect your finances and your future.
