What happens if you crash a leased car?

If you’ve had an accident in a leased car, you may be wondering what happens next. This guide tells you everything you need to know so you can handle the situation with ease.

An accident is always stressful, whether you own, lease, or hire your car. However, figuring out what to do with a damaged leased car can be particularly confusing. You’ll need to consider insurance, how the crash impacts your lease, and the steps to take with your lease provider. It can be a lot to handle.

So, what should you do if you crash a leased car? Here’s everything you need to know to ease your mind.

What to do if your leased car is involved in an accident

If you’re involved in a car accident, whether in a leased vehicle or not, stop at the scene, turn off your engine, and activate hazard lights. Exchange details with the other driver(s) involved and, if necessary, call emergency services for injuries or blocked roads.

For insurance purposes, gather key information: note the time and location, record vehicle details (make, model, color, registration), collect contact info from other drivers and witnesses, and take photos of any injuries or damage.

Notify your insurance provider as soon as possible — even if you don’t plan to file a claim. Failing to report an accident could void your policy, leaving you uninsured and making it harder to get future coverage.

It’s also important to let your leasing company know about an accident so they can handle repairs to their standards and help you avoid charges when you return your car.

What happens if the car is repairable?

Contact your leasing company to see if they offer repairs or if you need to use approved garages. If you have the freedom to choose, it’s worth shopping around, as repair costs can vary. A garage will give a final repair quote for your leased car.

To make a claim with your insurer, you’ll need all relevant documents and accident details. This is why you should stop at the scene and record everything right away.

One clear requirement for driving a leased car is that you must arrange a fully comprehensive insurance policy. This type of insurance covers the total cost of repairing damage to your vehicle, as well as any third-party property, in the event of an accident where you’re found to be at fault.

Most leasing companies understand that accidents can happen, so a car accident on its own usually won’t cause issues with your finance provider. You should generally never find that getting into an accident – unless the accident is a result of illegal activity – affects your car lease.

What happens if the car is written off?

If your leased car is written off, the finance company will treat it as if you’ve bought the vehicle, ending the agreement. You’ll need to start a new contract if you want a replacement. Since there’s still finance to repay, the lender will calculate a settlement figure. Your insurer will then pay out the car’s current market value. If that doesn’t fully cover the settlement, you’ll have to pay the difference. That is unless you have GAP insurance, which covers that shortfall. This is the same if you write off a car that’s financed with PCP too.

What happens if you return a leased car with damage?

At the end of your leasing agreement, your car will be inspected for any damage. You’ll be responsible for paying for any damage deemed beyond ‘fair wear and tear,’ as outlined in the BVRLA Fair Wear & Tear guide.

Fair wear and tear refers to the normal wear a vehicle experiences from regular use. However, damage caused by neglect, unrepaired accident damage, or similar issues is not considered fair wear and tear, and you’ll be charged for this when returning the car.

Crashing a leased car FAQs

Do I need to tell my lease company about an accident?

Yes, you should notify your leasing company if you’re in an accident, even if the damage seems minor. Most lease agreements require you to report any damage or accidents. And since the leasing company technically owns the vehicle, they need to be aware of any issues so they can arrange repairs and help protect you from potential charges later on.

Am I still responsible for lease payments after an accident?

Yes, you’re still responsible for lease payments after an accident, even if you’re not at fault. Unless the car is written, you’ll continue paying. If it’s damaged but drivable, you must keep up with payments during repairs. If it’s a total loss, the insurance payout may not cover the full lease balance, and you could owe the difference — unless you have GAP insurance.

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