What Happens If I Get in a Car Accident in a Leased Car?

Leasing a vehicle is a great alternative to buying. Drivers can lease newer models for less than the cost of buying without worrying about vehicle maintenance or committing to a single car for the next 10 years. Dealerships today lease about 3 in 10 cars that leave the lot, according to U.S. News. What many drivers are not as sure about as the actual lease is what happens if they get into collisions in leased vehicles. Lack of ownership can pose unique legal issues.

What Is a Leased Car?

The traditional way to get a new car is to buy one. Most buyers take out vehicle loans to purchase new cars, and then pay off their car loans over time (typically in monthly installments). Not all drivers wish to purchase or own their vehicles, however. Leasing a car is an alternative to buying. It is similar to renting a vehicle, except the driver will have a longer-term contract with the lessor.

In a vehicle lease, the driver pays for the depreciation of the vehicle over the term of the lease, on top of lessor fees and interest rates. For example, if you lease an SUV worth $30,000 for three years, and the estimated depreciated value of the SUV at the end of that three years is $20,000, you will pay the difference: $10,000. The lessor will divide your payments into installments over the course of your lease. At the end of your contract, you will renew your lease or return the vehicle to the dealership.

Insurance Requirements for Leased Vehicles

You may not own a leased vehicle, but you must still pay for insurance to legally drive it in the state of Nevada. Taking out a leased vehicle insurance policy will ensure you have the coverage you need in case of an accident. To make sure your policy will protect you from financial liability after a crash, meet at least the minimum insurance requirements in Nevada.

  • $25,000 in bodily injury insurance per person
  • $50,000 in bodily injury insurance per accident
  • $20,000 in property damage insurance

Most vehicle leasing companies will require you to pay for insurance coverage beyond the minimum required amounts. You may have to purchase guaranteed asset protection (GAP) coverage, for example. GAP coverage protects the leasing company by fulfilling your financial obligation to the company if you total the vehicle or someone steals it.

You may also want to purchase additional coverage types to pay for your personal medical bills or losses in an at-fault accident, such as collision or comprehensive auto insurance. The more insurance you purchase, the stronger your liability protection after a crash.

What to Do After an Accident in a Leased Vehicle

If you get into a car accident in a leased vehicle, the initial steps to take afterward remain the same. Stay on the scene, check for injuries, call the police, and seek medical care. The insurance claim process, however, will look different. You will need to notify both your insurance company and the leasing company after a collision. You have separate contracts with both companies that require you to report any accidents as soon as possible. Follow the steps each company gives you for how to proceed.

Typically, you will take the leased vehicle to a shop for an evaluation and estimate of repairs. Your insurance company – or the insurance company of the at-fault driver – will then pay for the cost of repairs or vehicle replacement. You will still owe the leasing company, however, for any remaining payments you have under the lease. GAP coverage will take care of this payment if you have this type of insurance. A Las Vegas accident attorney can help you negotiate your insurance claim after a crash in a leased vehicle.