Leasing a car is a popular choice for many — it’s flexible and often comes with lower monthly payments than buying. But what happens if you total a leased car? The answer isn’t always straightforward. Between insurance, the leasing company, and possibly the other driver, there are a lot of moving parts.
Our New York personal injury lawyers explain how leases and insurance work and what you’re responsible for in the event of an accident below.
How Do Leased Cars Work?
Leasing a car is akin to renting a vehicle for an extended period, usually between two to five years. Instead of owning the car, you make monthly payments to a leasing company. At the end of the lease term, you have the option to either purchase the car or return it, as long as it’s in good condition.
New York Auto Insurance Requirements
In New York, all drivers — including those with leased cars — must have specific types of auto insurance:
- No-Fault Insurance: This covers medical expenses and lost wages, regardless of who is at fault in the accident.
- Liability Insurance: This pays for injuries and damage to others if you’re at fault.
- Uninsured Motorist Coverage: This protects you if you’re involved in an accident with an insured driver.
What Happens If You Total A Leased Car?
If your leased car is involved in an accident and deemed a total loss, the process can look pretty different from that of an owned vehicle. Here’s how it typically unfolds:
Insurance Payouts
In the event of a total loss, your insurance company will assess the vehicle’s value and issue a payout to the leasing company based on the car’s actual cash value (ACV) at the time of the accident. However, this amount may not always cover the remaining balance on your lease.
Your Financial Responsibility
You’re still responsible for the lease even if the car is totaled. You may need to keep making payments until everything’s resolved. If the insurance payout is less than what you owe on the lease, you’ll have to cover the financial gap out of pocket.
Gap Insurance
Many drivers opt for gap insurance to mitigate the financial burden of a totaled leased vehicle; this type of coverage can help cover the difference between what your insurance covers and what you still owe on the lease.
Do You Have to Report Damage to a Leased Car?
Yes, you need to report damage to a leased car. Since the leasing company owns the vehicle, you must inform them about any damage or accidents immediately — it’s part of your lease agreement.
How Do Leased Cars Work?
Leasing a car is akin to renting a vehicle for an extended period, usually between two to five years. Instead of owning the car, you make monthly payments to a leasing company. At the end of the lease term, you have the option to either purchase the car or return it, as long as it’s in good condition.
New York Auto Insurance Requirements
In New York, all drivers — including those with leased cars — must have specific types of auto insurance:
- No-Fault Insurance: This covers medical expenses and lost wages, regardless of who is at fault in the accident.
- Liability Insurance: This pays for injuries and damage to others if you’re at fault.
- Uninsured Motorist Coverage: This protects you if you’re involved in an accident with an insured driver.
What Happens If You Total A Leased Car?
If your leased car is involved in an accident and deemed a total loss, the process can look pretty different from that of an owned vehicle. Here’s how it typically unfolds:
Insurance Payouts
In the event of a total loss, your insurance company will assess the vehicle’s value and issue a payout to the leasing company based on the car’s actual cash value (ACV) at the time of the accident. However, this amount may not always cover the remaining balance on your lease.
Your Financial Responsibility
You’re still responsible for the lease even if the car is totaled. You may need to keep making payments until everything’s resolved. If the insurance payout is less than what you owe on the lease, you’ll have to cover the financial gap out of pocket.
Gap Insurance
Many drivers opt for gap insurance to mitigate the financial burden of a totaled leased vehicle; this type of coverage can help cover the difference between what your insurance covers and what you still owe on the lease.
Do You Have to Report Damage to a Leased Car?
Yes, you need to report damage to a leased car. Since the leasing company owns the vehicle, you must inform them about any damage or accidents immediately — it’s part of your lease agreement.
What Should I Do After a Car Accident in a Leased Vehicle?
- Prioritize Your Safety: Your first priority should be making sure everyone’s okay. If anyone is injured, call for medical help immediately.
- Call the Police: In New York, reporting accidents that result in injury or significant property damage is mandatory. A police report will be helpful for any future claims or if you decide to take legal action.
- Gather Information: Exchange contact and insurance information from all parties involved in the accident. You should also gather contact details from witnesses who may have seen the incident.
- Notify Your Insurance and Leasing Company: As mentioned above, you’ll need to inform both your insurance provider and leasing company about the accident. They’ll guide you through the next steps and your role in everything.
- Consider Legal Help: Whether you sustained injuries in the accident or there are disagreements about fault, a personal injury lawyer can help you understand and navigate the legal process.
What Should I Do After a Car Accident in a Leased Vehicle?
- Prioritize Your Safety: Your first priority should be making sure everyone’s okay. If anyone is injured, call for medical help immediately.
- Call the Police: In New York, reporting accidents that result in injury or significant property damage is mandatory. A police report will be helpful for any future claims or if you decide to take legal action.
- Gather Information: Exchange contact and insurance information from all parties involved in the accident. You should also gather contact details from witnesses who may have seen the incident.
- Notify Your Insurance and Leasing Company: As mentioned above, you’ll need to inform both your insurance provider and leasing company about the accident. They’ll guide you through the next steps and your role in everything.
- Consider Legal Help: Whether you sustained injuries in the accident or there are disagreements about fault, a personal injury lawyer can help you understand and navigate the legal process.
How a New York Car Accident Lawyer Can Help
Whether you’ve sustained injuries in an accident or there are disagreements about fault, a car personal injury attorney can help you navigate the legal process and ensure you understand your rights. They’ll also handle negotiations with insurance companies to secure a fair payout and, if needed, file a lawsuit against the at-fault party.
Lastly, a lawyer can also review your lease and insurance policies to protect your financial interests and clarify your responsibilities after the accident.
How a New York Car Accident Lawyer Can Help
Whether you’ve sustained injuries in an accident or there are disagreements about fault, a car personal injury attorney can help you navigate the legal process and ensure you understand your rights. They’ll also handle negotiations with insurance companies to secure a fair payout and, if needed, file a lawsuit against the at-fault party.
Lastly, a lawyer can also review your lease and insurance policies to protect your financial interests and clarify your responsibilities after the accident.
Injured in an Accident? Contact Our New York Personal Injury Firm Today!
If you’ve been in an accident with a leased vehicle and are struggling with insurance claims or lease payments, Field Law Group is here to help. We specialize in personal injury cases and are dedicated to protecting your rights.
Call 212-739-7278 or contact us today to schedule a free consultation — we’re available 24/7!
Injured in an Accident? Contact Our New York Personal Injury Firm Today!
If you’ve been in an accident with a leased vehicle and are struggling with insurance claims or lease payments, Field Law Group is here to help. We specialize in personal injury cases and are dedicated to protecting your rights.
Call 212-739-7278 or contact us today to schedule a free consultation — we’re available 24/7!
Field Law Group, P.C.
17 State Street, 40th Floor
New York, New York 10004
This website contains attorney advertising. Prior results do not guarantee a similar outcome, see Disclaimer.
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Field Law Group, P.C.
17 State Street, 40th Floor
New York, New York 10004
This website contains attorney advertising. Prior results do not guarantee a similar outcome, see Disclaimer.
Designed by PostcardMania
Field Law Group, P.C.
17 State Street, 40th Floor
New York, New York 10004
This website contains attorney advertising. Prior results do not guarantee a similar outcome, see Disclaimer.
Designed by PostcardMania