What Happens If You Crash A Leased Car?

The thought of getting into a crash is obviously an unpleasant one, but it’s an unfortunate fact that many drivers will be involved in at least one road accident during their lifetime. Should it happen to you, it’s important to know what to do next.

While the majority of drivers are familiar with the most common next steps – contacting your insurance provider, potentially having to write off your vehicle and such – some steps of the process are slightly different when it comes to cars that have been leased instead of purchased outright.

So, what should you do if you crash a leased car? Read on for GB Vehicle Leasing’s advice below.

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

If your leased car is involved in any kind of traffic collision or road accident, you should always report this to your insurance provider as soon as possible, even if you don’t need to make a claim on your insurance policy as a result.

If your insurance company were to find out that you had failed to report an accident, this will more than likely invalidate your policy completely. This means that you’d be left without insurance cover and may struggle to find cover elsewhere, leaving you unable to drive.

How does insurance work on a leased car?

One clear requirement of driving a leased car is that you must arrange a fully comprehensive insurance policy. These policies cover the full cost of repairing damage and third-party property to your vehicle and to any other vehicle involved in an accident where you are deemed to be at fault.

You’ll need to inform your insurance provider that your vehicle is a lease car when you take out your policy, as your finance provider is classed as the registered owner and keeper of the vehicle for as long as you are paying it off.

What happens if you write off a leased car?

If it’s found that the damage caused to your car during a road accident would cost more than 65% of the vehicle’s total value to repair, your car is likely to be written off.

In the event your car is a write-off, your insurer will pay you for the current value of the vehicle, taking into account the damage sustained in the accident. Unfortunately, this amount might be lower than the outstanding balance on your finance agreement, which you are still required to pay to your lease provider.

For example, if you have an outstanding balance of £8,000 on your finance agreement but your car is valued at £6,000 by your insurance provider, you will only receive a £6,000 pay-out. However, you still owe the additional £2,000 to your lease provider, as they are registered keeper of the vehicle.

What happens when you return a leased car with damage?

At the end of your finance agreement, your vehicle will be inspected for damage. You’ll be asked to pay any damage that isn’t considered to be ‘fair wear and tear’ according to the BVRLA Fair Wear & Tear guide.

Fair wear and tear is the acceptable deterioration to a vehicle that occurs through regular use. Any damage that is suspected to be a result of neglect, unrepaired damaged from an accident, etc. is not considered fair wear and tear, so you’ll be charged for this when returning your vehicle to the finance provider.

How does an accident affect a car lease?

Most leasing companies accept that car accidents are always a possibility, which is why a car accident alone should not cause any serious problems 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 vehicle lease.

However, it’s important that you do inform your lease provider after an accident, just as you would with your insurance provider. This is so that your finance provider can carry out any repairs on the vehicle to their own specifications. In turn, this will help you to avoid being charged for damage when returning your vehicle.

Lease agreements with GB Vehicle Leasing

At GB Vehicle Leasing, we offer a catalogue of thousands of vehicles that can each be leased for an affordable price. We believe that everyone should have access to the right vehicle for them, so we have created lease deals that allow you to drive away your dream car with no nasty surprises or fees and without breaking the bank.

For more information or to get a quote on a vehicle within our collection, contact GB Vehicle Leasing today.