What happens if you crash a lease car?

Unfortunately, accidents do happen. Whether you as the driver are at fault or not, you may be asking yourself what you would do if you crash a lease car.

One of the terms and conditions of your lease agreement will be to fully insure the vehicle so that if you do find yourself in an accident you will be able to claim back the funds for repairs.

The most important thing to do is to make sure you, your passengers or any third parties also involved are all safe and OK. Having a car accident can be a frightening and stressful experience and both your finance company and insurers deal with these situations day to day and will be happy to help you.

After the incident you will need to inform the relevant people of the accident, any damage will need to be assessed and once you have a quote for the repairs it will be paid for either by insurance or if the costs are minimal, you or the third party may wish to pay for the damages without going through insurance companies to keep future insurance costs down and to protect any no claims bonuses.

Who to inform

After an accident, you will need to inform your insurance company as soon as possible. They will go through the details with you including the time and date of the accident and ask you about any damage caused to the vehicle. They may also ask you to supply this information in a letter to them.

After you have informed your insurance, you will need to inform your finance company of the crash. They will again need to know the level of damage caused to the car and depending on the lease agreement they may also stipulate where any repair work is carried out so that they know it is being done to the correct standard.

What to do if someone else is at fault

If someone else has caused an accident that results in damage to your lease vehicle, you should get their insurance details at the scene. It is also a good idea to take pictures of the vehicle registration number, any damage caused and images of the area where the accident happened. You should also provide your details to the third party involved, so they can pass them on to their insurance company who will then liaise with you directly. If you have an accident and you are not at fault, it will not cost you or affect your no-claims discount. You will still need to inform the relevant people, but the person at fault will pay for any damage repair through their insurance.

Total loss of the car

You may or may not be fully aware of the damage the accident has caused to your car until it is checked over by a professional garage, depending on your insurance and finance company policies, they may stipulate where this needs to happen. You could find that the car is a write off, meaning the cost to repair is more that the car’s worth. In this case, the lease company will usually work on the basis that the car is being purchased and the lease will end, with any monies owed going to the lease company to cover the cost of the car. A final settlement figure will be provided by the leasing company which covers the cost of the vehicle, and your insurance provider will pay out a fair market value of the car to cover this cost. There may be times that these figures do not add up, which is why GAP insurance is a great idea for lease cars in this scenario.

GAP insurance is designed to pay out any
shortfall between the settlement figure and the money paid out from
the insurance provider. In the event of a total loss, GAP insurance
can save you from having to pay any outstanding costs back to the
finance company, should the basic insurance pay-out not fully cover
the settlement figure.

If the damage is minor, you or the third party may wish to pay for the repairs yourself in order to protect a no claims bonus. This is fine to do if the finance company is aware and agrees to the garage carrying out the repairs.

Returning a lease car with damage

If you do have an accident and do not declare it to your finance company, it will undoubtedly be picked up on the return inspection. Likewise, if you try to repair any damage yourself or not through a reputable garage, you will be responsible for the cost to get the repairs done again to the standard that is expected and agreed upon in your contract.

Any damage outside of the fair wear and tear policywill result in penalties which may be more costly than having the repairs carried out properly in the first place.

Frequently asked questions