What Happens If You Crash A Leased Car? Our Full Guide

Crashing your car is never a pleasant experience, and when it’s a leased car, there is the extra worry that you’ve landed yourself in especially hot water. First things first: take a deep breath. Accidents happen to the best drivers – even the Stig crashed in his many years of driving.

The good news is that crashing a leased car isn’t the end of the road for your lease. Whether it’s a personal car leasing deal or a business car leasing contract, the process after a crash is much the same as with any car. In this guide, we’ll walk you through what to do immediately after the accident, how repairs and insurance are handled, what happens if the car is a write-off, and how damage affects your lease return.

What to Do If You Crash Your Leased Car

An accident can leave anyone shaken up, but it’s important to keep calm and take the proper steps. Assuming everyone is safe, if the incident involved another driver, swap contact, vehicle registration numbers and insurance details with them, take photos of the scene and damage done to all vehicles so that insurance claims are as watertight as possible.

Next, notify your insurance provider about the accident immediately, even if you don’t intend to make a claim. Failing to report an accident could invalidate your coverage, which is the last thing you need on top of everything else. After the insurance provider, contact your leasing company. You’re contractually obliged to report any accidents or damage, even minor scrapes. Give them a ring and let them know what happened. They may have specific procedures for repairs or requirements about where to get the car fixed.

From there, continue to pay your lease even if your lease car will be out of action. Unfortunately, you’ll still be responsible for the monthly payments while the car is being repaired. The only exception is if the car is officially written off – more on that later.

How to Repair a Damaged Lease Car

How should you go about restoring your crashed lease car in a way that prevents wear and tear charges once you hand it back to the dealership? If your leased car is repairable, the process isn’t too different from any other car repair – but there are a few lease-specific considerations to keep in mind.

First off, get an assessment of the damage. Your insurance company will usually ask you to take the car to an approved garage for a repair estimate. In many cases, lease agreements require you to use manufacturer-approved or finance company-approved repair shops, so that the repairs meet their standards. Check your lease contract or ask your provider if you’re free to choose a repair shop or if they have preferred partners. Using approved repairers and genuine OEM parts will keep your warranty intact and wear and tear charges at bay.

Assuming the car is fixed up and looking dapper again, you simply carry on with your lease. Your monthly payments continue as normal, and life goes on. Save for a note on the vehicle history and any insurance implications, it’s almost as if the accident never happened.

If Your Lease Car is Written Off

So what if the worst happens and the crash was enough to render the car a heap of undrivable scrap? When the damage is so extensive that repairing the car isn’t economically viable, this is known as a “write-off”, which has extra steps and implications for your lease.

When a leased car is declared a write-off, the leasing company will treat it as an early end to the contract, as if you bought the car outright just before the crash. You won’t be continuing to make monthly payments on a wrecked car, but there will be a final settlement figure to close out the lease. This settlement is basically what’s outstanding on your lease (and possibly the anticipated value of the car). The finance company calculates how much money is still owed for the vehicle, since you’re ending the contract early by virtue of the car going the way of the dinosaurs.

Now, your insurance comes into play in a big way. The insurer will pay out the current market value of the car (just before the accident) as the claim settlement for the total loss, but if this doesn’t cover the whole amount you owe on the lease, you’re on the hook for the shortfall. This can happen because cars depreciate, and your lease balance might be higher than the car’s market value at the time of the crash.

This is where GAP insurance (Guaranteed Asset Protection) becomes the hero of the day. If you had the foresight to take out a GAP insurance policy on your leased car, it would cover that shortfall, meaning you wouldn’t have to pay the difference out of pocket. GAP insurance is specifically designed for this situation – it bridges the “gap” between the car’s insurance value and what you owe on your finance. Many experts (including us at cars2buy) recommend considering GAP insurance when leasing a car, because it can save you thousands if your car gets written off.

Returning a Damaged Lease Car

We’ve talked about what happens if you managed to get the car repaired after an accident – but what if you didn’t? When returning a leased car, it will undergo an inspection for damage, assessed using the BVRLA Fair Wear & Tear guidelines.

Any damage beyond fair wear and tear will likely cost you. The leasing company will bill you for any fixes needed to bring the car up to standard, which can be higher than if you’d fixed the car yourself earlier. So, if you’ve had an accident, it’s usually cheaper in the long run to get the car properly repaired before you hand it back. For more information, check out our guide on car lease wear & tear charges explained for a deep dive into the topic

Choose the Right Lease Deal with cars2buy

If you’ve just been through the wringer of a crashed lease car, you know how important it is to have a reliable vehicle and a leasing company that supports you. We’re the UK’s number-one destination for finding new car lease deals – bringing together offers from hundreds of trusted dealerships across the country in one transparent, easy-to-use service. We’ve done the hard work for you by compiling all the latest and best leasing deals in one place, so you can compare personal and business lease options side by side and see the full scope of what’s out there.

With cars2buy, you can find the right deal that fits your needs (perhaps with those all-important insurance add-ons like GAP insurance in mind). Our service lets you filter and tailor your search to find the perfect match – whether you need a frugal personal runaround or an executive motor for your business fleet. Browse our lease deals today, and you may be driving behind the wheel of a brand-new model sooner than you think.